Smart Risk
Learn effective entry confirmation methods and tools used by smart money traders to increase trading success. Topics covered include v-shaped recovery, RSI divergence, premium and discount zones. These entry confirmations can filter out bad quality setups and provide higher quality trading setups. Proper implementation of these confirmations can increase profitability and reduce risk exposure.
Mastering Entry Confirmation Strategies in Smart Money Trading: Patterns and Tools
Introduction:
Are you finding it difficult to identify profitable opportunities in financial markets? Are you getting stopped out of trades too often? Then, you are not the only one. In this video, we will reveal the most effective entry confirmation techniques used by the smart money traders. You will learn how to use these techniques to your advantage, gain a solid understanding of how to confirm your trades like a pro, and increase your chances of success in the market. Join us in mastering entry confirmation strategies.
Forms of Entry Confirmations:
Confirmations can provide higher-quality trading setups by adding more depth and meaning to them and help filter out bad quality setups. In this video, we will explore some possible forms of entry confirmations that can be utilized within the smart money trading strategy: V-shaped Recovery, RSI Divergence, Premium and Discount Zone. Using each of these in trading can add to the effectiveness and accuracy of trading decisions, enhancing profitability and reducing risk exposure.
V-Shaped Recovery (VSR):
VSR stands for V-Shaped Recovery. A v-shaped pattern forms when price approaches a demand zone, falls quickly, rises back to its previous level, and forms a v-shaped pattern. Such patterns indicate that banks are actively participating in the market, leading to significant buying or selling momentum. Therefore, traders should look to enter or exit trades in the same direction as the banks during a subsequent test of the demand or supply zone. Not every v-shaped price movement should be considered a v-shape pattern and a sign of bank participation; pay attention to v-shaped patterns that are formed near or within the supply and demand zones.
RSI Divergence:
RSI Divergence is another method used in smart money trading. Identify divergences that can be a signal of a potential trend reversal. RSI Divergence typically occurs when price moves in the opposite direction of the RSI chart. There are two types of RSI Divergence: bearish and bullish.
Bearish Divergence:
Bearish divergence occurs when the price is making higher highs, but the RSI indicator is making lower highs. This suggests a weakening of the momentum of the uptrend and a possibility of a reversal in price direction. A break below the overbought territory could be used as a potential selling opportunity or could be used to trigger a new short position.
Bullish Divergence:
Bullish divergence occurs when the price is making lower lows, but the RSI indicator is making higher lows. This suggests a weakening of the momentum of the downward trend and a possibility of a reversal in price direction. Traders can use this signal as a potential buying opportunity.
Premium and Discount Zone:
Another method of entry confirmation that smart money traders use is the premium and discount zone. The premium and discount zones reveal the strength of the demand or supply zone. A premium zone is characterized by an elongated price movement without significant pullbacks, while a discount zone consists of a significant pullback before the resumption of price movement. Understanding these zones can be beneficial in identifying potential trade setups.
Conclusion:
In conclusion, exploring patterns and tools used in smart money trading can add depth and meaning to trades, provide higher-quality trading setups, and filter out bad quality setups. Learning how to use the V-shaped Recovery method, RSI Divergence, and Premium and Discount Zone as confirmation for entry could help increase the accuracy and effectiveness of trading decisions while reducing risk exposure. Take your trading to the next level with these entry confirmation strategies.
