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.