Does timing of entry really matter, or just direction? | Forex Factory

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Does timing of entry really matter, or just direction?

  • #1
  • First Post: Dec 7, 2014 11:12am Dec 7, 2014 11:12am
Many people here seem to have very, very strong thoughts about various parts of trading. However, as I have simplified my trading entries to a rather straightforward process, I'd like to hear what others thought.


I use my indicators to pick direction (for this example, going long) and ensure that a lower TF has already triggered, the current one is on the cusp or has and upper TF confirms. At that point, I will set a buy order above the current price at the next interval - xxx.30, xxx.62 or xxx.95 and also set another one above and let the market do it's thing.


When the market ranges, you may prefer to stay out, or use halved trade sizes and accept you'll need to take smaller profits. It's a bit trickier putting them on (and taking off), so I give myself a leeway of half the distance of any of those values (e.g., we are trading roughly 30-31 so i will set one at .46) if the current price is too close or just above one of my intervals.
  • #2
  • Dec 7, 2014 2:37pm Dec 7, 2014 2:37pm
I think overall direction is far more important than picking levels to enter/exit. If you have the direction right more often than not you should profit with random entries and exits - I'm not convinced anyone can generate more accurate entries/exits than this anyway. Definitely when trading crosses, levels mean nothing - any analysis you try is going to be in direct conflict with analysis done on the majors.

When you say "timing" do you mean using time to find entries/exits, or price levels? I probably make more decisions based on the x-axis (time) than the y-axis (price). When I find the direction I want to trade the first thing I look at is the clock, and I often turn down a trade opportunity because it appears at the wrong time. I think time of day and time of week impacts price far more than people realize, it's usually more significant than whatever price action/levels happen to be doing at that time.
si hoc legere scis nimium eruditionis habes
  • #3
  • Dec 7, 2014 2:49pm Dec 7, 2014 2:49pm
Market timing is key to flawless trade execution. Some authors even refer to technical analysis as market timing. When u have identified a trend and the subsequently a signal/setup, "scaling down" to lower time frame for execution gives u the chance of executing ur orders at a good price and it can also help u to minimize risk of whipsaws or retest of previous swing points of price. This way to tend to reduce the number of pips for stop loss and at the same time allowing u rake in more pips in that particular price move. Direction is good but it is timing that makes it properly enjoyed, because u wouldn't want to enter a trade at its reversal point. Like some novices that say when they place the trade the markets reverse against their position. Laughable isn't it?
If u think u can, then u can!
  • #4
  • Dec 7, 2014 3:02pm Dec 7, 2014 3:02pm
Hi
It depends on your stratgy stop loss and look to what may happen i dont wait if the price go move counter i lower my entery size to enter again when it moves counter so it dont really effect my trading so much
focus while relaxed to see better
  • #5
  • Dec 7, 2014 4:25pm Dec 7, 2014 4:25pm
timing of entry does not matter - there are only 2 entry times on any chart that never went positive - a buy at the all time high and a sell at the all time low.

The same can be said for direction.

No one element is important it is a combination of elements that result in profit consistently
tradewith60
  • #6
  • Dec 7, 2014 5:24pm Dec 7, 2014 5:24pm
This holds truth. I wish someone would have told me this 7 years ago. Seriously. Then again they probably did but i probably wasn't ready to hear it. Good discussion guys. Thanks.
  • #7
  • Dec 7, 2014 5:48pm Dec 7, 2014 5:48pm
Quoting numbnuts
.... When you say "timing" do you mean using time to find entries/exits, or price levels? I probably make more decisions based on the x-axis (time) than the y-axis (price). When I find the direction I want to trade the first thing I look at is the clock....
I do this a lot. I am still working on refining the techniques, but some things happen particularly on Mondays around FOLO (0700 ~ 0800 GMT).
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #8
  • Dec 7, 2014 5:50pm Dec 7, 2014 5:50pm
Timing matters. So does direction. Size matters too
Please check out my blog at https://from-zero-to-hero . net
  • #9
  • Dec 7, 2014 11:14pm Dec 7, 2014 11:14pm
Quoting Exodus
I do this a lot. I am still working on refining the techniques, but some things happen particularly on Mondays around FOLO (0700 ~ 0800 GMT).
If you have enough confidence in your FA skills to predict long term trends reasonably accurately, you can simply buy or sell a small position every day, in the time you mentioned. The blue triangles on this chart mark the entries of my accumulated long position on U/J - one hour before London Open, every day for 6 weeks and counting, completely regardless of price levels or any sort of TA


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si hoc legere scis nimium eruditionis habes
  • #10
  • Dec 7, 2014 11:46pm Dec 7, 2014 11:46pm
Quoting numbnuts
{quote} If you have enough confidence in your FA skills to predict long term trends reasonably accurately, you can simply buy or sell a small position every day, in the time you mentioned. The blue triangles on this chart mark the entries of my accumulated long position on U/J - one hour before London Open, every day for 6 weeks and counting, completely regardless of price levels or any sort of TA {image}
Congrats. Magnificent work!
  • #11
  • Dec 8, 2014 12:20am Dec 8, 2014 12:20am
Quoting numbnuts
{quote} If you have enough confidence in your FA skills to predict long term trends reasonably accurately, you can simply buy or sell a small position every day, in the time you mentioned. The blue triangles on this chart mark the entries of my accumulated long position on U/J - one hour before London Open, every day for 6 weeks and counting, completely regardless of price levels or any sort of TA {image}
Only problem is market trends for 20% (dont ask me for prove) of the time (specially the uj one).

If you were onto UJ from the start than yeah timing was not important than direction (right?).

But now at all time high's i think timing is more important than direction now. You surely dont wanna be hanging at the top of this move.

so from the above, to answer OP's original question, depends on where you are in a long term trend and whats your MM.

just my opinion ofc.
.
  • #12
  • Dec 8, 2014 12:51am Dec 8, 2014 12:51am
Quoting smash1820
Timing matters. So does direction. Size matters too
Exactly does. The matter is that the market structure is being unfolded at exact times, for example, first 4 hours of London session.

Best,
D.P.
Hunting High and Low
  • #13
  • Edited 3:47am Dec 8, 2014 1:04am | Edited 3:47am
From a strictly mathematical standpoint, of course timing of entry and exit matters. P/L is always the difference between entry and exit. The more accurate your entries and exits are relative to market turns in your chosen horizon, the more pips you’ll bank. If you asked any trader “would you like to be more accurate in timing your entries?” surely the answer would be “yes”.

Hence, in that sense, the question becomes: not how important timing is, but — given the amount of info retail traders have, and that the market is always an anonymous mix of participants whose agendas are completely unknown — how much accuracy in timing is actually possible?

Some folk will say that the answer is none, or at least that TA offers little better than a 50/50 proposition. At the other end of the spectrum, there are threads that claim that, with certain types of forecasting, close to 100% accuracy is possible. A friend whose opinions I respect greatly pointed me to this thread (and its associated website), and said that it was the final piece of the puzzle for him; if I understand correctly, it’s all about using S/D and PA to gauge where heavyweights are finding liquidity, and thus frequently gaining entry zones on short timeframes with great accuracy. For better or worse, I plan to immerse myself in it, as soon as time permits; despite its commercial label there's a lot of free info and videos.

OK, now on to some generalizations about market types.........

If the market is trending strongly, and/or you’re running some kind of trend-following system, then timing of entries is much less important, because you can jump on the trend at any time and ride it for profit for as long as it lasts. TF systems tend to use wide trailing stops, or other profit exit techniques to milk the trend for maximum effect. Anybody who's traded sharemarket boom cycles will understand exactly what I mean.
Pyramiding, as numbnuts has done (see post #9), further increases profitability as multiple entries all profit simultaneously.

However, if you’re trading countertrend, or across sideways ranges or channels, then accuracy in timing of both entry — picking local tops and bottoms — and exit becomes much more important, for obvious reasons.

With breakout systems, the timing of the entry is also significant — it’s at the point of the breakout.

With scalping systems, again accuracy in timing becomes critical; with longer timeframe trading, there’s arguably greater margin for error.

Hence, in summary, I’d say importance in timing depends partly on the expertise of the trader, partly on current market conditions (more here), and partly on the trader’s horizons and how his strategy operates.

Just my opinion, FWIW.
  • #14
  • Dec 8, 2014 1:21am Dec 8, 2014 1:21am
Quoting numbnuts
{quote} If you have enough confidence in your FA skills to predict long term trends reasonably accurately, you can simply buy or sell a small position every day, in the time you mentioned. The blue triangles on this chart mark the entries of my accumulated long position on U/J - one hour before London Open, every day for 6 weeks and counting, completely regardless of price levels or any sort of TA {image}
Hi mate, wondering if you could let me know the other times during the 24 hour period that possibly work similar to this if willing. Also where can I get the clock pictured on your chart.

Thanks
  • #15
  • Dec 8, 2014 1:25am Dec 8, 2014 1:25am
Quoting hanover
From a strictly mathematical stabdpoint, of course timing of entry and exit matters. P/L is always the difference between entry and exit. The more accurate your entries and exits are relative to market turns in your chosen horizon, the more pips you’ll bank. If you asked any trader “would you like to be more accurate in timing your entries?” surely the answer would be “yes”. Hence, in that sense, the question becomes: not how important timing is, but — given the amount of info retail traders have, and that the market is always a mix of participants...
Well said David. You said what I meant to say. I just figured it was so obvious and anyone could figure it out that it almost wasn't worth saying. Do entries matter? Of course they do!

Anyways, I will check out that website just because you recommend it. I know another one too that you would like, but I'm not going to post it here. I hope you're doing well buddy. We miss you!
Please check out my blog at https://from-zero-to-hero . net
  • #16
  • Dec 8, 2014 1:39am Dec 8, 2014 1:39am
Quoting hanover
From a strictly mathematical stabdpoint, of course timing of entry and exit matters. P/L is always the difference between entry and exit. The more accurate your entries and exits are relative to market turns in your chosen horizon, the more pips you’ll bank. If you asked any trader “would you like to be more accurate in timing your entries?” surely the answer would be “yes”. Hence, in that sense, the question becomes: not how important timing is, but — given the amount of info retail traders have, and that the market is always a mix of participants...
Excellent posts mate.

the problem a retail trader faces when encountering different types of analytically tools (TA/FA etc) is that they dont realize what tools should be used for what.

Fufundamentals can tell us where the price might be going next (direction) but not when. Even if a trader get his direction right with his fundamental analysis if he does not use a trigger for timing (news event/ volatility / TA ) he may end up loosing money or get very low ROI.

On the hand the TA traders can time the market but most of them wont go near FA. I mean how many TA traders would bought UJ in 80's and 90's and 100's? but how many are holding? The mistake TA traders are making is of trying asking TA to tell them the direction. IMO TA should never be used for direction (beyond the next SR).
  • #17
  • Dec 8, 2014 1:52am Dec 8, 2014 1:52am
Timing determines risk; therefore perfect timing is essential.

Let's say you bought the euro at 1.35 and it's now at 1.23. Bad timing, huge risk
Let's say you had waited and decide to buy the euro at 1.23. Better timing, less risk.

Buy low / sell high...
  • #18
  • Dec 8, 2014 2:14am Dec 8, 2014 2:14am
Quoting numbnuts
{quote} If you have enough confidence in your FA skills to predict long term trends reasonably accurately, you can simply buy or sell a small position every day, in the time you mentioned. The blue triangles on this chart mark the entries of my accumulated long position on U/J - one hour before London Open, every day for 6 weeks and counting, completely regardless of price levels or any sort of TA {image}
Excellent result.

Will you use FA to exit this trade, or some other method?
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #19
  • Dec 8, 2014 2:53am Dec 8, 2014 2:53am
Quoting eeddss11
Hi mate, wondering if you could let me know the other times during the 24 hour period that possibly work similar to this if willing. Also where can I get the clock pictured on your chart. Thanks
Most intraday volatility occurs in the first four hours of the London session - if you look at a 1H chart of EUR/USD or GBP/USD and bring up a 10 or 12 period ATR, you'll see that this is when all the action happens. For the rest of the day volatility steadily drops again. I trade a couple of different strategies in different accounts but no matter what the strategy, my entries are all timed to coincide with this.

You can get my desktop clock here http://www.qlock.com/
si hoc legere scis nimium eruditionis habes
  • #20
  • Dec 8, 2014 3:01am Dec 8, 2014 3:01am
Quoting Exodus
Will you use FA to exit this trade, or some other method?
I trail all the stoplosses up with the EMA on the chart, I'll keep adding until it gets hit. Simple FA made it obvious at the beginning that the pair was going to revalue itself, but getting the timing right, and predicting exactly how far the trend will go, is far beyond my abilities.
si hoc legere scis nimium eruditionis habes
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