5 Best Entry Strategies - Smart Money Concepts, Price Action & Indicators
Summary
TLDRThis video offers traders five top entry strategies to achieve near-zero drawdowns. It emphasizes the importance of a good entry strategy for effective trading and covers concepts like imbalance-based strategies, fair value gaps, and the use of indicators like moving averages for entry confirmation. The script also introduces market structure and order block strategies for precise entries, and concludes with key levels for trading opportunities, all aimed at aligning trades with market makers for high-return investments.
Takeaways
- 🎯 The video discusses five top entry strategies for achieving trades with minimal drawdown.
- 📉 Entry strategies are crucial as they determine risk-to-reward ratios and potential gains or losses in trading.
- 🔍 The first strategy is the 'imbalance based strategy', which involves identifying fair value gaps caused by strong momentum pushes by large financial institutions.
- 🚫 It's important to differentiate fair value gaps from mere price overlaps without significant momentum, as the latter may not indicate a true market inefficiency.
- ❌ Avoid mistaking any price overlap as a fair value gap and also refrain from using high-impact news events to identify these gaps.
- 📊 Use fair value gaps as entry points by marking them and trading with pending orders, as prices often return to fill these gaps and continue the trend.
- 📈 The second strategy involves using indicators like the exponential and simple moving averages for additional entry confirmation, with specific settings for each.
- 📉 Market structure strategy is based on understanding price action and identifying higher highs/lows in uptrends and lower highs/lows in downtrends.
- 📌 Combine market structure with indicators for more solid entry points, using Fibonacci tools and candlestick formations for additional confirmation.
- 🏛 Order block strategy involves identifying zones with accumulated orders, representing institutional order flow, which can provide strong entry points.
- 🔑 Key levels such as support and resistance, along with trend lines, offer significant entry opportunities when prices react at these critical points.
- 🔄 The video emphasizes that these strategies should be combined with proper technical analysis for effective trading.
Q & A
What are the key points covered in the video about entry strategies for trading?
-The video covers five top entry strategies with almost zero drawdown, focusing on smart money concepts, price action, and indicators-based strategies.
Why is an entry strategy important in trading?
-An entry strategy is crucial as it determines the risk-to-reward ratio and how much you will make or lose in a trade, regardless of how good your analysis may be.
What is an imbalance or fair value gap in trading?
-An imbalance, also known as a fair value gap, is an area of market inefficiency where the wick of the first candlestick fails to overlap the wick of the third candlestick in a three-candlestick formation, usually due to high buying or selling pressure.
How can traders identify a fair value gap correctly?
-Traders should identify fair value gaps by looking for strong momentum pushes that create gaps on the chart, and not mistake any point where price failed to overlap as a fair value gap without the presence of momentum.
Why should traders avoid using momentum candlesticks caused by high impact news as fair value gaps?
-Although high impact news can create large gaps and price inefficiencies, it's best to avoid using them for identifying fair value gaps because they may not guarantee a bounce off and continuation of the trend.
How can traders use fair value gaps as an entry strategy?
-Traders can use fair value gaps as an entry strategy by marking the gaps and waiting for the price to come back to fill them. The filling of the gap is where traders can take trades to flow with the market maker, often using pending orders.
What role do indicators play in the entry strategy discussed in the video?
-Indicators, when used correctly, can add more entry confirmation to a trade. The video specifically mentions the use of moving averages, both exponential and simple, to provide signals for trend changes and potential entry points.
How do moving averages help in determining the trend and entry points?
-The blue exponential moving average signifies an uptrend, while the red simple moving average signifies a downtrend. A crossover of the blue line over the red line signals a change from downtrend to uptrend (a long signal), and vice versa for a short signal.
What is the market structure entry strategy and why is it reliable?
-The market structure entry strategy is based on understanding where you are in the market trend, with uptrends making higher highs and lows, and downtrends making lower highs and lows. It's reliable because it's founded on the market's natural price action patterns.
How can the market structure strategy be combined with moving averages for better entries?
-The market structure strategy can be combined with moving averages by using the formation of higher lows in an uptrend or lower highs in a downtrend, along with the crossover of moving averages, to confirm the direction of the trend and validate entry points.
What are order blocks and how can they be used for entry strategies?
-Order blocks are zones on the chart with an accumulation of orders, indicating institutional order flow. They can be used for entry strategies by playing orders on these zones, expecting the price to pick up orders and continue the original trend, especially when combined with fair value gaps.
How do key levels like support and resistance serve as entry points in trading?
-Key levels such as support and resistance offer good entry opportunities because there's a high tendency for the price to react at these levels. Traders can use bullish or bearish candlesticks at these levels, along with moving average confirmations, to enter trades.
Outlines
🚀 Zero Drawdown Entry Strategies with Smart Money Concepts
This paragraph introduces five top entry strategies for traders to achieve almost zero drawdown in their trades. The importance of a good entry strategy is emphasized, as it determines the risk-to-reward ratio. The video promises to demonstrate sniper entries with high returns based on smart money concepts, price action, and indicators. The first strategy discussed is the imbalance-based strategy, focusing on fair value gaps, which are market inefficiencies caused by strong momentum pushes from large financial institutions. The paragraph explains how to identify fair value gaps and the common mistakes traders make when recognizing them. It also advises against using momentum candlesticks caused by high impact news for identifying fair value gaps. The strategy involves marking the gaps and trading with pending orders, aiming to flow with the market maker as prices correct the inefficiency.
📊 Market Structure and Indicator-Based Entry Strategies
The second paragraph delves into the market structure entry strategy, which is based on understanding price action and market trends. It explains how to identify uptrends and downtrends by looking at higher highs and lows or lower highs and lows, respectively. The paragraph advises using the Fibonacci tool to track retracements and combine it with moving averages for additional entry confirmation. The moving averages discussed are the exponential moving average (EMA) and the simple moving average (SMA), with specific settings provided for each. The strategy involves using the crossover of these moving averages as a signal to go long or short. The paragraph also introduces the concept of order blocks, which are zones with a concentration of orders indicating institutional order flow. It suggests that prices will often return to these zones, providing reliable entry points. The use of key levels, such as support and resistance, trend lines, and other significant points, is also highlighted as a method for identifying entry opportunities when prices approach these levels.
Mindmap
Keywords
💡Entry Strategies
💡Drawdown
💡Imbalance
💡Fair Value Gaps
💡Momentum
💡Indicators
💡Moving Averages
💡Market Structure
💡Fibonacci
💡Order Blocks
💡Key Levels
Highlights
Introduction to the top five best entry strategies with almost zero draw down for trading.
The importance of a good entry strategy for determining risk to reward in trading.
Explanation of 'imbalance' or 'fair value gaps' as areas of market inefficiencies.
How to identify fair value gaps caused by strong momentum pushes by large financial institutions.
Common mistakes traders make in identifying fair value gaps and how to avoid them.
Using fair value gaps as an entry strategy with pending orders for high-probability trades.
Combining fair value gaps with order block for more precise trading opportunities.
Introduction to using indicators for additional entry confirmation in trading strategies.
Setting up and using moving averages, exponential and simple, for trend identification.
How moving average crossovers can signal trend changes and provide entry points.
The necessity of combining indicator strategies with other technical analysis for better trading decisions.
Market structure entry strategy based on understanding price action and market trends.
How to use Fibonacci tools in conjunction with market structure for entry points.
Order block entry strategy based on zones with accumulation of institutional orders.
Identifying reliable order blocks and their significance in institutional order flow.
Combining order blocks with fair value gaps for precise entry opportunities.
Entry based on key levels such as support and resistance for reacting to price movements.
Using moving averages to increase confidence at key levels for entry and exit points.
The importance of technical analysis in conjunction with entry strategies for successful trading.
Transcripts
hello Traders welcome back to another episode in this video we are going to show you top five best
entry strategies with almost zero draw down regardless of how good your analysis may be
without a good entry strategy it's as good as nothing and your entry determines your risk to
reward how much you will make or lose in a trade in this video we are going to show you how to get
those zero draw down sniper entries with high returns here is what we are going to cover in
this video These entries is based on Smart money Concepts price action and indicators
based strategies without further Ado let's jump right into it the first strategy we will start
with is the imbalance based strategy imbalance also called fair value gaps are areas of Market
inefficiencies they are gaps on the chart where the wick of the first Candlestick fail to overlap
the wick of the third Candlestick in a three Candlestick formation on the chart this is due
to a high buying or selling pressure now it's important to note that not all failed overlap
between the candlesticks are fair value gaps but those caused by strong momentum push this
is a classical example of fair value Gap what does it signifies fair value gaps shows that
large financial institutions like hedge funds and investment Banks pushed in a lot of money to move
the market to their desired Direction thereby creating inefficiencies in the market so by
identifying this gaps we now have an opportunity to take trade in line with the market maker
because price will always come back to correct the inefficiency in price before continuing the
trend one common mistake among Traders when it comes to identifying fair value Gap is that they
mistake any point where price failed to overlap as fair value gap for example this Candlestick
didn't make contact with this one but at the same time it's not a fair value Gap because there is no
momentum push before the Gap and though price will come back to fill it but it's not a guarantee that
it will bounce off it and continue the trend another mistake to avoid is using momentum
candlesticks caused by high impact news like NFP or other fundamentals as fair value gaps
in as much as these fundamentals creates large gaps on the chart and price inefficiency it's
best to avoid them completely when identifying your fair value gaps now let's look at how to
use fair value gaps as an entry strategy Mark out your fair value gaps like this after your overall
technical analysis price will come back to fill in this gaps that was created by this big push then
at the filling of this imbalance is where we take trades to flow with the market maker it's best to
trade this strategy with pending orders because price usually Taps into this Zone and leaves in
just one move let's look at another example this is a fair value Gap here so price came back to
fill in here and continue the trend you see how price reacted off this line without going lower
than that so an entry based on this imbalance would be a zero draw down impulse entry in the
course of this video we will see how to combine this with order block to take a more precise trade
with high probability the next entry strategy we will look at is the use of indicators indicators
adds more entry confirmation to a trade if learned to use correctly though they are lagging but there
are combinations of indicators that work hand in hand to give a good entry signal these are
moving average exponential and simple moving average to add this moving averages click on
the indicators icon on your trading view type in moving average then select the exponential moving
average and the simple moving average once that is done it will be displayed on your chart go to
the settings on the exponential moving average and type eight and also set the colour to your
preferred colour I will leave mine blue because it signifies bullish Market click on the simple
moving average and type in 18 and set the colour to your preferred colour I will leave mine red
because it signifies bearish Market here is how the moving average works the blue exponential
moving average stands for uptrend Market while the red simple moving average stands for downtrend
when the exponential moving average is above the simple moving average it means that the trend is
uptrend while the simple moving average over the blue exponential moving average means that it's a
downtrend when the blue exponential moving average crosses over the red moving average it means that
the trend is changing from downtrend to uptrend a signal to go long when the red moving average
crosses over the blue exponential moving average it means that the trend is changing from uptrend
to downtrend and is a signal to go short let's look at some few examples this blue exponential
moving average crosses over this red simple moving average here just when the trend was
about to change from downtrend to uptrend at just this cross here is the point to go long a
good entry signal also here the red simple moving average crosses over this blue exponential moving
average a good entry signal to go short it's good to note that the indicator strategy cannot be
traded alone in isolation and should be combined with other technical analysis the next strategy
we will look at is the market structure entry strategy and we will show you how to combine it
with the indicator strategy for a better entry now Market structure strategy entry based on Market
structure is a very solid and reliable approach to taking trades because Market structure is the
foundation to understanding price action Market structures points out where you are at any given
point on the charts in an uptrend market price makes higher highs and higher lows while in a
downtrend market price makes lower lows and lower highs note a break of structure only happens when
price closes above the previous lower high in a downtrend or the previous higher low in an uptrend
to take a trade based on this strategy we go long when price forms a higher low in an uptrend market
after this pullback we use a Fibonacci tool to track the retrace and go long at the formation
of this bullish Candlestick to further confirm if price is ready to go bullish we add our moving
average the blue exponential moving average crosses over the red showing that price is
ready to push up this adds extra confirmations to your entry while in a downtrend market when
price makes a lower high we add the Fibonacci to measure the level of retrace when price gives this
bearish Candlestick at this Fibonacci levels we now have a signal to go short to further add more
cont influence we add the moving averages the moment this red simple moving average crosses
over the blue exponential moving average we have the signal to go short it's good to know that
market structure together with moving averages gives more solid entry now let's look at order
block based entry order blocks in simple terms are zones on the chart with an accumulation of orders
these are zones with high selling or buying orders which represent an Institutional order flow where
large Market particip ipants such as hedge funds or banks have entered the market with substantial
sell or buy orders making the Zone a strong point of interest to identify order blocks in a bullish
market look for areas where the market did move with strong push to the upside often creating a
fair value Gap like here price pushed up with this momentum Candlestick forming an order block here
in a bearish market you look for areas like here where price dropped down significantly creating a
fair value Gap this is an order block right here note a reliable order block must always have an
imbalance resting above it in a downtrend market or below it in an uptrend market like here this
is an imbalance also known as fair value Gap order block is a very reliable entry strategy
since it's formed as a result of tons of orders left behind by big financial institutions it
therefore means that price will always go back to pick these orders before continuing the original
trend of the market so to get an entry based on this strategy you play your order on this Zone
and price picks up the order and continue the uptrend movement entry based on this strategy
is only valid when there is a fair value Gap like here so combing an order block with fair value Gap
gives more precise entry opportunity let's look at another example this is an order block resting
Above This imbalance here price fills the fair value Gap and tap into the order block then drops
note before any entry you must have done your technical analysis this is only an entry-based
strategy now let's go over to entry based on key levels key levels such as support and resistance
trend lines and other important key points offers a good entry opportunities when price approaches
a strong key points there's always a high tendency for price to react on the key level and therefore
serving as an important key entry point like here price bounced off this support level an entry to
go long after this bullish Candlestick here we we can also add our moving average to increase our
confidence level let's look at another example here price bounce off this resistance Zone this
bearish Candlestick shows that price is likely going to change from the uptrend to downtrend
the cross of this red simple moving average here confirms the entry this is how to use key level
as an entry strategy always remember these are entry strategies alone to learn how to
analyse the chart correctly you can check our previous videos see you in our next episode
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