8 tips to optimize entries to our trades

We have been teaching the use of different types of indicators, along with strategies or patterns to make the most of them. At the same time, we are also providing tips or tricks to improve our skills and cognitive biases in trading. And since we haven't talked about these topics for quite some time now, we are going to give you 8 tips to optimize your trade entries.

Concatenate signals from different time frames.

Let's start with the first tip of this trading training. In order to optimize the entries to our trade, the first thing we have to know is to define what time frame we are going to operate in and have two other references. This allows us to carry out our analysis but at the same time, measure the viability of our work over a longer and shorter time frame. For example:

• For swing traders (operations lasting more than one day) have the daily time frame (1D) as a reference, the 4-hour time frame (H4) as intermediate and the 1-hour time frame (H1) to attack.
• If, on the other hand, we are more intraday operators (we open and close operations on the same day), it would be convenient to have the 4-hour time frame (H4) as a reference, the 1-hour time frame (H1) as an intermediate, and to attack the 15-minute time frame. (m15). 
• Finally, for those who like strong emotions, we recommend scalpers use the time frame of 1 hour (H1) as a reference, that of 15 minutes (m15) as an intermediate time frame and that of 1 minute to attack (m1).

Identify the maximums and minimums of the session.

One of the mistakes we make when we just want to propose a trade is ignoring the levels that the price has left us. These levels give us valuable information to determine the possible direction that the price may take, given that the highs and lows of a session are the limits established by the market itself in that session. In this way, when we are just planning our trade, we can assess whether the price is in an oversold zone or, on the other hand, in an overbought zone. For example, if I wake up at 8 in the morning and do intraday trading, I observe the highs and lows of the session (since the day started at 00:00) and the current price position with respect to these.

Observe the changes between the closing and opening of the candle.​

Another important point to observe to optimize our entries are the openings and closings of candles. It is a proven fact that assets tend to move much more strongly in the opening and closing of candles. In turn, they allow us to identify important signals in the asset. For example, during the hourly candle change, movements with more volatility occur than during the entire course of the candle.

Candle changes are an element closely observed by traders, since this moment is when strong hands usually get rid of their positions and open new ones. For example, to determine market sentiment in Bitcoin, the weekly and monthly candle close is usually taken into account. 

Pay attention to the opening and closing of stock markets.

Another of the best tips to follow in this trading training. Let's apply the logic with a simple example; If I go to the mountains to pick mushrooms in summer, I will pick few mushrooms since it is not the right season. Well, the same thing happens with trading, if we start operating during dead hours it will be more difficult for us to find a viable operation. Therefore, the best times to optimize our entries is during the trading periods of the main stock markets, preferably when they just open or close trading.

All stock markets open between nine or ten in the morning and close around four or five in the afternoon, but depending on where we are our hours may differ. For example, for our time zone (UTC +2) the openings occur at nine in the morning (European market), at three thirty (American market) and at two in the morning (Asian market). These openings are concatenated with the closures. 

Check the economic calendar for a catalyst.​

As we mentioned in previous articles for your trading training, there are certain catalytic events that can help us optimize our entries. For example, when trading in the stock market is about to reopen. CME futures of Bitcoin or Ethereum, we can analyze the gap that could have been generated to evaluate a possible entry. There are also events such as decisions on interest rates, on raw material reserves or macroeconomic data reports that can increase volatility… and optimize our entry into the market.

Average the entries to our trade.

This advice is one that we must analyze with caution, given that not everyone is qualified to make this type of entries. Averaging is a great ally if we know how to do it. As it is usually mentioned that we should not have all our eggs in the same basket (in reference to diversifying our investments), we do not necessarily have to go all-in on the first operation. We can make an average entry within a range in order to minimize the impact of a move against our analysis. In this way, we manage to optimize the entries of our trade by distributing the risk at different levels.

Wait for pattern formation to confirm entry.

During these last weeks we have given you lessons for your trading training on different indicators and their behavior patterns. So...What better way to optimize entries than by observing the patterns that we have taught you? Many of the patterns taught in trading training lessons are optimal for gauging a potential trade entry. 

For example, the mirror pattern of the Koncorde indicator to detect institutional entries, identify accumulation periods with the Mago Estraperlo, slippage between moving averages, the buying or selling force with the ADX or the retracement to 38,2% of the retracement tool Fibonacci...

*Extra crypto tip: Follow the rooster in the barnyard and invest in chicks.​ 

Last advice from this trading training, but to apply it to the cryptocurrency market. If at any time you want to enter a trade within the cryptocurrency market, it is essential that you first observe how the rooster in the pen is moving, that is, Bitcoin. The why sounds obvious; The king of cryptocurrencies has 40% of the overall market share, therefore, if Bitcoin moves in one direction, the other crypto assets will follow in its wake.

And to finish optimizing entries by looking at Bitcoin, we recommend that you make your trades in assets with a lot of trading volume but lower capitalization (I call them “chicks”). I explain why; When Bitcoin moves 2%, Ether usually performs the same as Bitcoin, even a few percentage points more. But, on the other hand, if we invest in these “chicks”, they usually double or triple the returns (in the case of the previous example, they would generate between 4-6%). This is like a time lag that usually generates good returns for these assets… and for our trades.