How To Determine Entry & Exit Levels?

When it comes to technical analysis we try to keep things as simple as we can. That includes basis tools like support & resistance, ADR levels and significant price levels.
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Technical Trading – Entry & Exit Levels 

We just have a quick question here from Amir asking us, how do we go about determining our entry and exit levels on the charts?

Now, Amir, there’s a couple of things that we use on a daily basis. What’s important to take note of, before we start is that, the levels that we set out on the charts for probable entry areas and exit areas are based on a couple of factors, but they are still just a high probability zone, right?

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So it doesn’t mean that the price must and will always react from there that the price will always reach there, or bounce from specific levels. It’s based on all of the analysis that we’ve done and that is the highest probability areas based on that particular chart, based on that particular sentiment, that particular day, that we think is the highest probability opportunity of reacting from.

Now the various elements that we use, we try and keep things very, very simple so that it’s easy for mostly all traders to replicate in their own analysis as well. Some of the most basic things we use is just, traditional support and resistance structures. So if we just quickly take this as a US dollar chart, we can see that we’ve had this overall resistance area.

Let’s mark it out with a horizontal line. We’ve got this overall resistance and we also have some support coming in on this zone. We also have this most recent resistance also coming very close to that zone. So we can use that as a high probability opportunities zone in terms of expecting resistance from the space. So we, we had it as resistance, then it turned to support, acted as resistance.

So the highest probability expectation when it reaches back to this level obviously will be resistance. Then apart from that, apart from just normal support resistance, we have another one going up there with some resistance and supports in there. We can also use the psychological price levels as a another way, another element to use.

Now psychological price levels will be, your round number. So let’s take the 64 handle. So let’s put in the 64 handle there, we can also put in the 64. let’s put in the round numbers first, let’s put in 63, we can also put in 62. And then apart from that we can also put in the the mid levels. So let’s take that one, 6350. And we can also put in 6250. Let’s just put that one in as well.

Apart from just normal support resistance, you can also add in something like your psychological price levels. We can see in today’s example, we’ve got confluence with a couple of factors here.

The first one obviously is the support resistance structure that we highlighted. We also have this 6350, which is a psychological level and as well the ADR, which is another element that we can use, giving us a high probability zone here of expecting resistance on this page coming in at that zone today. To the downside, we’ve got this support resistance structure also with the 6250, even though we have the ADR coming in a little bit lower, it’s also seen at a support and resistance structure. We also have a psychological level there. So that is also another area that we can consider for the pay.

Now apart from that, we also look at the value area. So if we take a look at this chart at the most recent FE value low that this chart has made is basically been this low from today’s session. So this gives us the highest probability expectation of support for this pay for today. But I mean, nothing…

This isn’t you know, a concrete wall that the market will slam into. There’s a high probability that it can just break through and reach that next level as well. But that’s just a couple of factors that we use. So it’s basically support resistance structures as well as psychological price levels. We also use the ADR FE value areas. Quite a number of elements that we use, and we try to find zones on the chart that has the most confluence, with most of those factors included.

So I hope that helps. If there’s any other questions, just let us know.

 

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