Trend entry techniques

Knowing how to identify a trend is just the beginning — now comes the question: when do you enter?

Good entries allow you to catch the trend early while managing your risk properly.

In this section, we’ll go through three proven techniques for entering trends:

1. Breakouts
2. Pullbacks
3. Confirmation filters

Each has its pros and cons, and we’ll explore how to combine them to find high-conviction entries.

1️⃣ Classic Breakout Entries

Breakout entries involve entering a trade when price breaks above resistance (in an uptrend) or below support (in a downtrend). This is a common way to catch strong trend momentum early.

✅ How it works:

  1. Identify a clear horizontal resistance or support zone
  2. Wait for a candle to close beyond the level (not just a wick)
  3. Enter on the next candle or slight pullback

Example:

  • EUR/USD breaks above recent swing high at 1.1000
  • Price closes at 1.1015
  • You enter long on the next candle with stop below the breakout level

⚠️ Caution: Breakouts can be prone to fakeouts, especially in low-volatility sessions or news-driven spikes.

2️⃣ Pullback Entries (Using Moving Averages)

Pullbacks offer better reward-to-risk ratios and are often more reliable than breakouts — especially during healthy, trending markets.

✅ How it works:

  1. Identify a trending market using 20 EMA or 50 EMA
  2. Wait for price to pull back into the EMA zone (e.g. between 20 and 50 EMA)
  3. Look for reversal candle patterns (pin bars, engulfing) or a continuation breakout

Example:

  • USD/JPY in uptrend, riding above 20 EMA
  • Price dips into 20 EMA and forms a bullish pin bar
  • You enter long on the next candle, stop below the pin bar

📌 Many trend traders only trade pullbacks to reduce chasing price.

3️⃣ Basic Confirmation Filters

To avoid false entries, especially in ranging or choppy markets, use a confirmation step. Think of this as a final check before entering.

Useful filters:

  • ✅ Higher-timeframe alignment: Check if the 4H and 1H trends agree
  • ✅ MACD momentum: Is it crossing in the direction of your trade?
  • ✅ ADX strength: Is it above 20–25, confirming an active trend?

📌 Only take trades when the majority of signals align. Avoid random entries.

🛠 Putting It Together: Example Entry Plan

Let’s say you’re trading GBP/USD on the 4-hour chart.

  • You identify an uptrend using 20/50 EMA
  • Price pulls back to the 20 EMA
  • You see a bullish engulfing candle
  • MACD is turning up and ADX is above 25

✅ Entry: Buy on next candle
⛔ Stop Loss: Below pullback low
🎯 Take Profit: At 2x your risk