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Learn a simple yet effective price action trading strategy called the continuation entry that allows you to enter trades in the exact direction of the market. Follow three steps for this strategy: identify a reversal trade setup, breakout trend change confirmation, and look for intraday pattern formation before taking a long continuation entry. Continuation entry acts as a more secure entry point, helps get around false breakouts, and scales into a winning trade. Follow the same steps for a short continuation entry in a new downtrend. Request video topics and follow WiseTrade on Instagram for more exciting projects.
Effective Price Action Trading Strategy: The Continuation Entry
Introduction: Understanding the Continuation Entry
In this video, we are going to share with you a simple yet highly effective price action trading strategy that we call the “continuation entry.” As traders, we always look for entry points that allow us to enter trades in the exact direction that the market is heading next. The continuation entry is precisely that, and we will be covering its variations in this article. So let’s get right into it.
Anatomy of the Trade Setup: Using Continuation Entry during a Reversal Trade
To use the continuation entry, you will need to follow three essential steps:
Step 1: Identify a reversal trade setup or trigger event to give you directional bias and momentum for the trade.
Step 2: Get a breakout trend change confirmation to validate the trade setup.
Step 3: Look inside the new moving uptrend on a lower time frame for any pattern formation.
Let’s take a more in-depth look at these three steps using an example of a reversal trade setup.
Step 1: Identify Reversal Trade Setup
The first thing you need to do is identify a reversal trade setup that will provide you with the momentum and directional bias to trade. You can do this by looking for key levels and reversal points on the chart. Once you have identified your reversal trade setup, it’s time to move on to the next step.
Step 2: Get Breakout Trend Change Confirmation
The next step is to get a breakout trend change confirmation that validates your trade setup. This means that you need to look for any form of price action that signals a change from a downtrend to an uptrend. You can do this by looking for bullish momentum candles and higher highs on the chart.
Step 3: Look for Continuation Pattern Formation
The final step is to look for continuation pattern formation inside the new moving uptrend on a lower time frame. This will allow you to find the exact entry point to ride the bullish momentum and find long entries. To do this, you need to look for any intraday pattern or trade setup that matches your directional bias.
Using Continuation Entry during a Reversal Trade through an Intraday Trade Setup
Now let’s take a look at another example of using the continuation entry during a reversal trade setup. In this case, we will be using an intraday trade setup instead of an intraday pattern. The process is the same, but we will focus more on intraday trade setups.
Step 1: Identify Reversal Trade Setup
As previously mentioned, the first step is always to identify a reversal trade setup. In this case, we are looking for a double bottom pattern that forms the key level for our trade.
Step 2: Get Breakout Trend Change Confirmation
Once you have identified your reversal trade setup, you need to get a breakout trend change confirmation. This means looking for any price action that shows a change from a downtrend to an uptrend. Here, we are looking for a momentum candle and higher highs that signal bullish momentum.
Step 3: Look for Intraday Long Trade Setup
The final step is to look for an intraday long trade setup inside the new moving uptrend. This will allow you to find the exact entry point to ride the bullish momentum and find long entries. To do this, you need to look for any intraday trade setup that matches your directional bias.
Advantages of Using Continuation Entry
Using the continuation entry has several advantages for traders. One, it acts as a more secure entry point, allowing traders to enter a moving trade with a confirmed directional bias and momentum. Second, it helps traders avoid false breakouts that can lead to losses. Finally, it allows traders to scale into winning trades, potentially increasing their profits.
Conclusion
In conclusion, the continuation entry is a highly effective price action trading strategy that can help traders find the exact entry point to enter trades in the direction of the market. By following three simple steps, traders can identify reversal trade setups, get a breakout trend change confirmation, and find long or short entries using intraday patterns or trade setups. Using the continuation entry can help traders avoid false breakouts, scale into winning trades, and trade with more confidence.
