Entry Strategies - High Probability Setup

Entry Strategy - High Probability Setup

1. High Probability Setup

1. correction within correction: this entry is hard to spot as it often escapes a trader’s notice. If

spotted at the right time, it has a good risk: reward as well high probability. The dotted red call out

points this entry. It has the best risk reward and high probability.

Explanation: We know by now that corrective structure should have 3 waves at least. Once the 3rd

wave of correction is over, we expect price to resume trend and go impulsively. This impulse wave

however can come in the form of 3 or 5 waves and if so then you can plan your entry at the end of

wave 2/b/x as shown in fig. below in purple color. We know the rules of an impulsive wave that it

should be a trending wave (refer to lesson “Wave pattern…”): Wave 2 cannot go beyond the start

of wave 1, similarly wave b cannot go beyond start of wave A (if expecting a 3-wave

impulse). Below is shown possible entries in a single time frame, the best one is pointed with

dotted red call out.

2. Trading Break Outs

1.Break out entry is the entry made when the next impulse crosses the end of the 1st impulse

preceded by a correction of the 1st impulsive wave.

2.Break out entry is done only if you are expecting reversal of the ongoing trend or correction of a

bigger degree after the ongoing trend. After a 5-wave impulsive structure, we expect correction of

the whole impulse (comprising of 5 waves). So, this is a bigger degree correction which will

reverse the smaller degree impulse / trend.

3.With reference to no. 2, break out entry can be in case of correction not reaching the desired fib

level you would expect it to go to. So, if the 3-wave correction finishes at 50% fib level while you

have planned your entry at 61%, and also you don’t get entry as per strategy A or C, entering at the

break out can be good opportunity.

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