There are as many Forex entry strategies as there are Forex traders… if not more. An entry strategy is a set of rules that are used to enter a Forex trade. Entry strategies are extremely important as they have much to do with the amount of profit you can make on a trade. If you enter too soon you may have received a false signal and end up with a losing trade. If you enter too late to trade could be much less profitable or you could have missed your potential profits altogether.

Here is an overview of a number of popular Forex entry strategies:

Trend following — trend following strategies have been and always will be very popular and effective. Trend following strategies are used by both beginners and experienced traders alike. The moving average is one of the most commonly used trend following indicators. The basic use of the moving average is as follows:

Buy when the price moves above your chosen moving average

Sell when the price moves below your chosen moving average

Using price breakouts or another popular trend following strategy. Price breakouts basically worked as follows:

Buy when the price moves above the highest high of the last X periods

Sell when the price moves below the lowest level of the last X periods

In the above example “X periods” can be any timeframe the trader desires. In a 10 day break out system “X periods” equals 10 days.

Countertrend traders could use a system similar to the breakouts system except that countertrend traders would trade against the trend. Here are some examples of a buy and sell countertrend trade.

Buy when the price reaches the lowest low of the last X periods

Sell when the price reaches the highest high of the last X periods

Using Forex entry strategies as well as Forex exit strategies is also known as market timing. Entering and exiting the market at the right times can mean the difference between a winning trade, a breakeven trade, and a losing trade. As always, in order to be successful you will need to test and evaluate your Forex entry strategies to make certain they have a high probability of success