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Pick The ‘Perfect’ Trade Entry Point For

Lower Risk & Higher Reward
By Nial Fuller in Forex Trading Strategies By Nial Fuller Last updated on November 28th, 2018 | 27 Comments

The ideal trade entry is one that

allows for good stop loss
placement and a substantial risk /
reward potential. Easier said than
done, right?
Nial Fuller’s Price Action Forex Trading Course.
Well, maybe not. Whilst these Learn Advanced Price Action Strategies & High

“perfect” trade entries may not be Probability Trade Entry Signals That Work

frequent, it doesn’t mean they are

“hard” to spot. It just takes some LEARN MORE

training combined with screen

time to learn how to nd them.

There are essentially three process that I use to nd the ideal trade entry. Here, in a nutshell,
is what I do every time I am looking for a new trade entry, this is how I think and what I look
for:

The 3 keys to finding the “perfect” trade entry: Find Us on Facebook

The easiest way to do this is to rst look for any really obvious price action signals on the
Nial Fuller - Learn To Tr…
daily chart time frame. The daily chart time frame, traded in an end of day manner is my Like Page 235K likes
favorite way to trade. I am looking for really obvious signals and patterns that “stick out like a
sore thumb”, and once you get familiar with the setups I teach, these aren’t hard to spot. Be the first of your friends to like this

Next, you want to look for con uent factors for the trade that back up the signal. So, you are
sort of “reverse engineering” the trade, if you will. You spot the signal, then, you start looking
back in time on the chart to see if the signal bar lines up with other key levels or has formed
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after a pull back within a trend or has some other type of con uence with the chart.

Pick The ‘Perfect’ Trade Entry Point

Essentially, you want to line-up as many supporting factors as possible if you want to nd the
For Lower Risk & Higher Reward
“perfect trade entry point”. The last thing you want to do, if you’ve found a signal that has
con uence, is look to see if you can “re ne” the entry so that you increase the risk:reward

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 potential of the trade (this is a more advanced concept that whilst isn’t “necessary” can Why You Exit Trades Too Early &
improve risk:reward. I get into this more in-depth in my professional trading course). How To Stop Doing It

Note: Whilst there really isn’t a “perfect” trade entry, we can still try to look for trades that
have the most “weight” or con uence behind them. 13 Quotes That Will Transform Your
Trading
A brief breakdown of the 3 key pieces of the “perfect” trade entry are:

1. Find the signal, pattern, level to trade, this is somewhat obvious, but it’s also a skill that
Why You Need To Protect Your
needs to be developed and re ned. For this tutorial we will use pin bar entry signals Trading Account Balance & How To
and tailed bar entry signals. Do It

2. Look for entry lters and con uent factors; things that back up the trade such as a
strong trend, key horizontal support and resistance levels, 50% swing retracement
What I Wish I Knew About Trading
levels other past signals (event areas), moving averages and more. 18 Years Ago
3. Entry tweaks and tricks; such as the 50% tweak retracement entry of the signal bar
itself, or simply consider a nearby key level for a more optimum entry point, that allows
for better stop placement and larger target. How To Develop A Winning Trader’s
Mindset

My typical daily routine to find that “perfect” trade entry:

After I wake up and eat a healthy breakfast (and yes, sometimes I eat Vegemite) and do my Why You Should Use Wide Stop
morning exercise, I will ip on the charts and see what happened after the U.S. session Losses
closed, remember, I am focused on the New York close charts. Since I live in Australia, when I
wake up it is in between the U.S. close from the previous day and the European open, so I
have a nice time to observe the daily charts in Forex, Stock Indices and major commodities The Most Pro table Markets I Trade
& Why
and see what happened before they really get moving again in Europe. Or, if I am looking at
my local Aussie markets, since it’s morning it’s the perfect time to enter a trade, IF one is
there.
Why I’m Not A Day Trader

My goal is to scan quickly through my favorite markets to trade and then look for obvious
trade signals / patterns that provide me with an edge in the market. If I nd one, I will then
lter that trade by nding reasons that back up the trade or that make sense with the
The Di erence Between Price Action
surrounding market structure. At this point, I am also seeing if the trade maybe doesn’t make
Event Zones and Support &
sense? Just because I nd a potential signal doesn’t mean I always trade it. If a signal has little Resistance Levels
to no supporting con uence then I will probably not trade it.

Lastly, if I nd a signal that meets my criteria and makes sense in the surrounding market The Top 10 Lessons I’ve Learned in
18 Years of Trading
structure (con uence), I will then nd the best and most logical way to enter it with the goal
of best stop loss placement and a high potential risk reward.

Let’s go through some examples: The Market Will Deceive You If You
Let It

Example 1:

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 In the chart below, I saw a very obvious daily chart EURUSD pin bar sell signal that looked like A Part-Time Trading Routine for
People with Jobs
it had a lot of con uence behind it, which we will discuss in the next chart. For now, note that
the tail of this pin bar was CLEARLY sticking out from the nearby pars, indicating a sharp
reversal and rejection of that price area and implying price might move lower in the coming
How To Use 1 & 4 hour Chart Time-
days. I didn’t have to search long or hard for this signal, it literally “jumped” o the chart to Frames to Con rm Daily Chart
me: Signals

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In the next chart, we are checking to see what supporting “evidence” this pin bar signal has.
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In this case, there is de nitely enough evidence to warrant a trade entry. As per the chart
below, the market was in a multi-month downtrend and the signal had formed after a pull
back to resistance, and a key resistance zone at that. The signal itself was also well-formed
and obvious, in my mind this trade was a “go” and all we had to do was set it up, pull the
“trigger” and go watch a movie or play some golf or whatever you like to do, just don’t stare
at the trade all day after it’s live.

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 Next, let’s look at the zoomed in view of the above pin bar. We are focusing now on the entry
“tweak” as well as seeing if we can improve the risk reward potential on the trade. Notice, in
this trade, we could have entered near the 50% point of the pin bar for a much improved risk
reward ratio. Realistically, an exact 50% entry on the pin would have been di cult as price
just barely touched that level before moving lower again. However, you could still have
entered on a retrace of the pin somewhere under that 50% point and with a stop above the
pin high. You would have a logical stop placement and a strong 3R to 4R pro t potential on
the trade.

Example 2:

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 In the example below, we are looking at the daily SPI 200 (Australian Stock Index) chart. Upon
glancing at this chart the pin bar circled below quickly caught my eye. It clearly lined up with
an overhead level on the daily chart time frame. The tail on this pin bar was clearly sticking
out and showed a sharp reversal in price.

The chart below shows a weekly chart view of the above daily chart. Often, I will check the
weekly chart when I nd a trade on the daily or 4 hour, to see how that signal makes sense in
the context of the longer-term time frame, or if it makes sense at all. In this case, the pin bar
on the daily above, formed at a very powerful key resistance level / event area on the weekly
chart, as we can see below. It also formed in-line with the downtrend in place on both the
daily and weekly charts.

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 Finally, we see a zoomed daily chart of the pin bar signal we are trading. Note that no retrace
/ tweak entry was possible here but this trade still had a good 2R Reward potential since the
next support was not until quite a ways down as you can see below. Trades like this that
form at a key level / event area and have the trend behind them and make sense on the daily
and weekly, often lead to fast and big moves…

Example 3:

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 In the next example we are looking at a couple of bearish tailed bar signals that formed on
the daily Crude Oil chart. You will quickly notice a very strong downtrend was in place and
that these bars formed just under a key resistance level after price broke and closed under
that level just prior. Whilst these signals may not “jump” o the chart at you like the rst two
examples, given the momentum behind the sell-o in this market they would have been
obvious setups to the trained price action trader.

Once we zoom out a little more you can clearly see the magnitude of that overhead level as
well as the trend that was in place. These strong pieces of supporting con uence made this
trade a virtual “no-brainer”.

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 A zoomed in view of the signal on the daily chart shows us that even with a stop loss just
above the rst tailed bar high (and beyond the level) there was still a huge potential risk
reward on this trade because this market was truly in a runaway trend. These types of trends
are the best for pyramiding into positions and making a big pro t. Notice on just one
position here you could have easily grossed a 5R pro t. Not a bad payday.

Conclusion
I hope that the main thing you take away from today’s lesson is that the best trades are ones
that form with multiple supporting factors. In all of the examples above, the trend was really
obvious and the signals formed at a key level in the market. This stu should not be di cult
once you gain the knowledge and understanding of what you’re looking for. However, there
is an “art and science” to it that takes some training, time and gut feel to get really good at.

I want you to remember that you’re looking for an “intersection” of a signal and a level or a
signal and a trend or even just a level and a trend as in the case of a blind entry. Essentially,
what we are doing here is trading like a sniper by waiting for the right pieces of evidence to
align and give us the green light to pull the trigger on the trade. All of this becomes easier
once you understand how to read the footprint of money on the chart, i.e. the price action. It
does take passion and commitment though, I have found as I’ve gotten older that the charts
have made more and more sense to me, even the randomness within them.

You have to truly to be in this for the ‘long-haul’ if you want to succeed at it because trading
is the ultimate test of the self. The market WILL expose all your human aws and how long it
takes you to truly start making consistent money at trading or if you do it all, depends mostly
on how fast or if you can accept these aws and correct them. Whilst this part of trading is

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 not easy, there are people who can help you; other traders who understand what you’re
trying to do and what you’re going through.

Learn To Trade The Market is a collective community of 20,000 + members who are all on the
same page and who all have the same end-goal of trading success. My members are
following the trading ideologies, processes and concepts discussed in this article and that I
expand upon in my advanced course. This is why I created Learn to Trade The Market,
because it allows you to “look over my shoulder” via my daily trade setups newsletter where I
implement the routine described above and combine that with the core teachings of my
course.

Please Leave A Comment Below With Your Thoughts On This Lesson…

If You Have Any Questions, Please Contact Me Here.

NOTE: Christmas Special: Until December 31st, Get 40% O Life-Time Membership To Nial
Fuller's Professional Trading Course & Daily Trade Ideas Newsletter - Click Here For More Info.

About Nial Fuller

Nial Fuller is a Professional Trader & Author who is considered ‘The
Authority’ on Price Action Trading. He has a monthly readership of 250,000+
traders and has taught 20,000+ students since 2008. In 2016, Nial won the
Million Dollar Trader Competition. Checkout Nial's Professional Trading
Course here.

Related

My 4 Secrets For Making The Perfect Risk Reward and Money Management in
Trade Entry Forex Trading

 27 Comments  Leave a Comment

Dominic
November 30, 2018 at 5:50 pm

wonderful course.
Thank you Fuller.
 Reply

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 Andrzej
November 30, 2018 at 8:09 am

I see more and more the power of this science in practical experience. I have an irregular
working time and I have seen a snow pin a day or two too late. I write my mistakes and these
are strong teachings. Only the truth itself. Thanks :-)
 Reply

Goran
November 30, 2018 at 3:25 am

Hi Nial! Thanks again for this article.

I have tradet the pin bar on Eurusd 3 day before your pin bar and I was stopped aut. So what to
do next time.
Do you maybe looking in this case for small short covering rally and the goo short, or
something else.
I don’t have bad feeling about this trade, because I have all 3 Tls, but I was too fast.
Thanks again
 Reply

Thomas
November 30, 2018 at 1:35 am

Nice points keep on giving me that helpful adsistance

 Reply

Evelyn James
November 29, 2018 at 11:08 pm

Nice one,this is really helpful thanks.

 Reply

Mario Smith
November 29, 2018 at 4:36 pm

Very Strong points to wait for these levels and trend,con uences thanks it makes a lot of sense .
 Reply

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 Frank
November 29, 2018 at 4:01 pm

Thank you for continuing to reinforce my trade entry foundational knowledge. The fog is slowly
lifting!
I am very grateful.
 Reply

AstarA
November 29, 2018 at 3:02 pm

Dear Nail,
Really you are helping to non-membership trader. I will joint with you soon.
 Reply

Barry
November 29, 2018 at 12:07 pm

Support. resistance, trend, never change, this is simple and workedd 100 years ago and will
work mext 100 years, Good onya, Nial
 Reply

Enéias Nascimento
November 29, 2018 at 11:26 am

Excelent, Nial. Another good article where you explain showing with examples.
I have been using the trend, level and signal part in all my trades, and im getting good at it. I
end up taking a few stops, but okay, im getting used to it. God bless you, Nial.
Eneias Nascimento.
 Reply

Gandus
November 29, 2018 at 9:08 am

Great input Nail. God bless you

 Reply

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 Zibusiso
November 29, 2018 at 8:39 am

Thanks Nial very insightful loved the article mind opening for me thanks a lot
 Reply

Rahwa
November 29, 2018 at 7:10 am

Thank you Nial forconstractive article.

 Reply

Marisa
November 29, 2018 at 7:09 am

Examples are the perfect way to learn and improve our trading skills. A great article. Thank you
Nial, you are the Best
 Reply

Muna
November 29, 2018 at 5:54 am

Great and empowering teachings from the Maestro. Thank you sir.
 Reply

MANOHAR NADKAR
November 29, 2018 at 5:14 am

HI,
VERY GOOD ARTICLE…AND VERY HELP FULL..
THANK YOU VERY MUCH MR NIAL…GOD BLESS YOU!
MANOHAR NADKAR
 Reply

Oscar
November 29, 2018 at 4:57 am

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 Nice lesson sir stay blessed
 Reply

David Johnston
November 29, 2018 at 4:08 am

Are these trades pointed out to members when the trigger candle appears?. Thanks
 Reply

Sabelo Mshengu
November 29, 2018 at 3:52 am

this is very informative,thanks Nial for sharing.

 Reply

Elton
November 29, 2018 at 3:32 am

Your interpretation of the market is so clear and obvious for us to understand i can really see
the e ort and hard work you put in to help us advance in our trading career. I think for us to
pay you back is by showing the same commitment and hard work so that we can become
better traders. We love and appreciate you for this brilliant article and please keep them
coming coz I’m eating every word.
 Reply

Lesiba
November 29, 2018 at 2:26 am

Thanks Nial you make this look easy hey. Do you also consider fundamentals in your analysis, if
so how do you incorporate it.
Lesiba
South Africa
 Reply

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 Rasheed Olusegun
November 29, 2018 at 2:05 am

Very insightful, thanks Fuller.

 Reply

Marco
November 29, 2018 at 1:25 am

Great examples. Some of them were actually MY trades. I also use 8 and 21 EMA’s as dynamic
S/R, specially when trading on a trend.
 Reply

Lesiba
November 29, 2018 at 1:13 am

Good afternoon Nial,

Thanks for the article it is easy and straight to the point. What I want to nd out is that how do
you factor in fundamentals in this type of analysis as an additional point of con uence.
Regards,
Lesiba
 Reply

Kunver Pindoria
November 29, 2018 at 1:08 am

Good afternoon
I am completly new to trading
Looking at all this chart I dont understand what you are talking
Please is there any place where I can start from scrach and practice before I start live trading
Thanks
 Reply

Maria Luisa Cavestro

November 29, 2018 at 12:55 am

Very good , thanks.

 Reply

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 Peter Miller
November 29, 2018 at 12:46 am

Support and resistance is de nitely the way to go , which you have proved over and again,
makes absolute sense.
Very good reminder Nial thanks
Peter
 Reply

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