In today forex faq, we will be discussing on how to get into a position.
Below is the question from one of our fellow trader
WHAT IS THE BEST WAY TO SCALE INTO A POSITION…WE HEAR SO MUCH ABOUT SCALING OUT YET FEW ABOUT SCALING IN…
The reason why you heard so much about scaling out of trade and not into a trade is because the way you get into a trade depends on your trading style and strategy.
However there are several ways that I can share with you regarding scaling into a trade.
1) Trend Line Break – The trend line break is one of the most commonly used way of getting into a trade. However the problem face by most traders with this method is the occurrence of fakeout.
If you are able to tell whether the trend line break is valid or not, you will be able to distinguish between a real breakout and a fakeout.
2) Major Support and Resistance Break – Whenever the price breach a major support or resistance, it will usually continue to move in its direction. Therefore using the major support and resistance for entry is also possible.
3) Divergence of Indicator – If you have read my post on forex macd divergence, you will know that divergence on indicators can be a great way to enter a trade.
As divergence is an early sign of incoming movement, it is a great place to enter a trade to take more profit.
The above are some ways you can scale into a trade but the whole thing has to go in hand with the strategy you are trading so that you can be profitable.
If you have anything to share regarding this area, do feel free to give your comment below as it will be very valuable to this community.