5 Best Entry Strategies - Smart Money Concepts, Price Action & Indicators

Summary

This 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

00:00

🚀 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.

05:03

📊 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.

Keywords

💡Entry Strategies

Entry strategies in trading refer to the methods used by traders to decide when to enter a trade. They are crucial for determining the risk-reward ratio and are the foundation of any trading plan. In the video's context, the focus is on five strategies that aim to achieve minimal drawdown, which is the peak-to-trough decline in the market value of an investment portfolio. The script emphasizes the importance of a good entry strategy for successful trading.

💡Drawdown

Drawdown is a measure of the decline from a historical peak in the value of a portfolio. It is often used to evaluate the risk or volatility of an investment. In the video, the goal is to find entry strategies that result in 'zero drawdown,' meaning trades that are positioned to not lose value significantly, thus maximizing returns while minimizing risk.

💡Imbalance

Imbalance, also known as fair value gaps, indicates market inefficiencies where there is a lack of overlap between the wicks of consecutive candlesticks on a chart, typically due to strong buying or selling pressure. The script explains that these gaps are created by large financial institutions moving the market in a desired direction, and traders can use these inefficiencies to their advantage by identifying and trading in line with the market maker's intentions.

💡Fair Value Gaps

Fair value gaps are specific types of imbalances on a price chart where the wick of the first candlestick does not overlap with the wick of the third candlestick in a three-candlestick formation. The video script clarifies that not all gaps are fair value gaps; only those caused by strong momentum pushes are considered as such. They signify significant market movements and provide opportunities for traders to enter trades that may correct these inefficiencies.

💡Momentum

Momentum in trading refers to the strength or speed at which the price of an asset is moving in a particular direction. High momentum can lead to the creation of fair value gaps, as mentioned in the script. It is an important factor in identifying valid imbalances and can be used to confirm the strength of a trend or potential reversals.

💡Indicators

Indicators are tools used in technical analysis to help traders make informed decisions about the market. The script discusses the use of moving averages, specifically exponential and simple moving averages, as indicators to confirm entry points. They provide additional confirmation to a trade and can signal trend changes, such as when the exponential moving average crosses over the simple moving average.

💡Moving Averages

Moving averages are a type of indicator that smooth out price data to show the average price over a certain period. The script details the use of the exponential moving average (EMA) and the simple moving average (SMA) with specific periods (8 for EMA and 18 for SMA) to identify trends and potential entry points. A cross of the EMA over the SMA can signal a change in trend direction.

💡Market Structure

Market structure refers to the pattern of higher highs and lows in an uptrend or lower highs and lows in a downtrend. It is a foundational concept in understanding price action. The video script explains how to use market structure in conjunction with indicators for a more reliable entry strategy, such as going long after a higher low is formed in an uptrend.

💡Fibonacci

The Fibonacci tool is a technical analysis instrument used to identify potential support and resistance levels, which can indicate where the price may retrace or reverse. In the script, it is mentioned as a method to track retracement levels and confirm entry points, especially when combined with market structure analysis.

💡Order Blocks

Order blocks are zones on a price chart where there is a concentration of orders, indicating institutional order flow. They represent areas of significant buying or selling pressure. The script describes how to identify order blocks and use them as entry points, especially when they are associated with fair value gaps, suggesting a high probability of the price returning to these levels.

💡Key Levels

Key levels such as support and resistance are significant price points on a chart where the market is expected to react. They are crucial for identifying potential entry and exit points in trading. The video script illustrates how price reactions at these levels can serve as important entry points, and how moving averages can be used to increase confidence in these entries.

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