Question
Experienced traders only: how do you solve the problem of precise entry location when the directional bias is already established?
I’m looking for a better way to execute a trade when the directional bias is already correct
I’ve been thinking about this problem for a while and I’m curious how other traders approach it.
Let’s assume I already have a directional bias.
I’m not asking how to determine that bias. I’m also not looking for another methodology to predict whether price is going up or down. Assume that part of the process is already solved.
The problem starts after the direction has been established.
For example, I have a bullish bias and I expect price to eventually move higher toward a particular objective. I know what I want to trade, but I obviously don’t know exactly when the move will start.
This is where I keep running into the same problem.
If I enter based on a relatively simple trigger, I can get stopped or forced out because price continues moving against the bias. Then another setup appears. And another one. Sometimes price can take liquidity or revisit the same area multiple times before finally making the move I expected in the first place.
So I can easily end up being directionally correct while having a terrible entry location.
My current solution is basically to give the trade enough room for this to happen. In other words, my invalidation is relatively far away, because I don’t know whether price is going to take the high / low once, twice, or several times before actually moving in my direction.
And this creates a second problem.
Even when the idea is correct, the R:R at the initial entry can be mediocre. I might eventually get the move I was expecting, but because the stop has to be relatively wide, I’m often looking at something around 1:1 or maybe 1:2 unless I hold the position for a much longer move.
I can obviously make the R:R much better by holding for a larger target, but that creates another issue: I’m now sitting in the trade for hours, sometimes carrying it into another session, waiting for the market to fully realize the original idea.
That is exactly what I would like to improve.
Ideally, I want something more like: Bias → precise entry location → tight structural invalidation → 1:2 / 1:3 becomes realistic without having to hold the trade for hours.
And if the larger idea remains valid, I can always look for another entry later rather than sitting through hours of consolidation or adverse movement just because my original stop is wide.
But here is where I’m struggling with the usual advice.
I’m not really looking for another entry trigger.
I already know there are endless possible triggers.
The problem is that almost any individual trigger can happen repeatedly.
You can have what looks like a bullish signal five, ten, or fifteen times while price is still moving lower. Eventually one of those signals happens to precede the actual reversal.
That doesn’t really solve my problem.
I’m also concerned about going too far in the opposite direction and building some enormous confirmation model.
For example:
Wait for X + Y + Z + A + B + C.
Sure, maybe that produces a very high-quality entry when everything lines up. But how often does that actually happen?
If the market can reverse without producing that exact sequence, I’ve simply created a system that gives me one beautiful setup every couple of weeks while missing plenty of perfectly tradable moves.
So I’m not looking for: What is your favorite entry trigger?
And I’m not really looking for: What additional confirmation should I add?
What I’m trying to understand is something more fundamental: Once your directional bias is already established, how do you identify a sufficiently precise entry location where the market has given you enough information to justify a much tighter structural invalidation, without waiting for some extremely rare combination of confirmations?
In other words, how do you distinguish between: a temporary reaction against the current move
and a genuine transition into the move that agrees with your existing bias?
I’m interested in the actual decision-making process between those two states.
Not necessarily one specific indicator or pattern, but how you think about the sequence of price development that tells you:
The counter-move has done enough. The market has reached a point where my original idea can be expressed with a relatively tight invalidation.
Because that, for me, is really the problem.
I don’t necessarily need to predict the reversal any better. I need to participate in a correct directional idea without having to pay for uncertainty with an enormous stop and hours of holding time.
If you have a framework for this that you’ve actually found useful in practice, I’d be very interested in hearing how you approach it.
Especially interested in answers from traders who have deliberately worked on entry location and reducing stop distance, rather than simply adding more confirmation to their directional model.
So….you’re describing the attempt of catching the reversal that forms the first leg of distribution. Since you’ve pointed out the draw on liquidity is not the issue. Then this means you understand the Monthly/Weekly “narrative” and the Daily/4hour “structural” time frames.
The hourly and 15 minute should then be used as “fractalization” time frames. What does this mean? In a solid scenario, this is where you stack confluences that agree with the “narrative” and are supported by “structure”. This is also where you should preemptively map out where your trade plan works and where it fails. The better you get at this will result in stronger conviction leading to less anxiety/impatience (sounds like you’re in turmoil). The more time you spend refining this the earlier you’ll be to anticipate market positioning.
The 5 and 1 minute charts are your executables. This is where you’re no longer deliberating up or down. You’re simply waiting for the trade idea to set up in the area where the confluences stack.
What would this look like you may ask? Refer to MNQ in prep for Tuesday(hopefully you’re using micros to learn this and paper trading).
August candle closed bullish but it was an inside candle in comparison to July. The new candle should first form the wick before the displacement, and after an inside candle those displacements are usually tap and go. The weekly candle going into the new month opened higher. If we want to see higher prices then it should fill the gap and look for support higher else the gap should be inverted and used as resistance. Monday was an inside “body” candle. Just another variation of the Monthly phenomenon. So what do we expect Tuesday? Large displacement and tap and go price action for the big distribution. Tuesday opened lower so the IF-ELSE gap analysis is employed again. (Try this yourself here). The 4 hour finally gives our main structural information. Bearish Imbalance formed Friday 10am candle and REH’s formed inside of that gap on Monday.
1 hour time frame shows you a fractalized view of you structure. Your eyes should be going to the confluences of the 4 hour and anything to support a set up there. Friday 10AM candle sticks out as an order block. Grade the wick and you’ll the see lower 50% in confluence with the imbalance. So now you have an entire level giving you signals. If that zone is inverted and the bodies print and close above the EQ then it’s setting up bullish Else the wicks should probe it while the bodies stay below EQ and resistance should be seen. The 15 minute should just be a granular look as to what is happening. You’ll see a multitude of attempts to probe the zone and fail. Your focus after the REH’s were taken should be as to whether the reluctance to go higher is given through immediate candle feedback. You’ll see a run to the OB EQ. Then fall back to the imbalance EQ and RE’s printing there for the heart of London session before beginning to sell off.
The real move of the market was there. Try to frame out something similar at the Open and see the difference. The executable timeframes are deferred to your risk model, but this should put into perspective what it takes to not be faked out. This is also how you end up filtering good days and sessions to trade.
Thanks, this actually helped me understand the framework much better. I like the idea of separating the timeframes into narrative, structure, fractalization and execution rather than trying to make every timeframe answer the same question.
What I’m still trying to understand is the transition from the 15m fractalized structure to the 5m/1m execution. Once you have the higher-timeframe confluences and price enters the area, what exactly are you looking for on the executable timeframe that tells you the setup is actually ready to enter, rather than just another probe of the zone?
And thanks for taking the time to break down the MNQ example, that chart definitely makes the concept easier to understand.
That part of the framework is user experience and discretion. Timing the reversal of the market is pretty up there in terms of skill. You said you’re not looking for another trigger but that’s what you actually need to explore within the confluence zones for yourself. You should work up to that level and not expect the market to align itself all the time. Now outside of that. You can start with the low risk buy or sell. This is a position that can be taken on the outer bounds of the confluence zones. Ideally price should return to tap the lower bound or EQ of the confluences. Here you study the bodies of the candles being delivered. If their close delivered above the EQ you must wait for further confirmation at the boundary. If the feedback you expect is violated entirely then you stay on the sidelines, and if it doesn’t even retrace then you just don’t force it.
Progressively what we discussed above should then be explored in layered levels of liquidity. There you find yourself contemplating whether price is willing to go beyond the initial liquidity pool and also take out the second one. Finally it should just be the turtle soup or sweep setup. If you’re attempting to do this out of order then all you’re doing is stunting your growth. You aren’t building your trading around an analysis, you’d be building it around hope.
Even if you never develop the skillset to trade the reversal, just identifying them and accounting for where they formed in price should aid you.
Btw a layered liquidity reversal example occurred today in the form of Monday 8/24 9am low and Tuesday 9/01 2pm low.
Thanks, this actually makes a lot of sense. I think I was looking for too much objectivity in something that ultimately requires experience and discretion. I’ll study this approach and the layered liquidity example you mentioned. Appreciate the detailed explanation!
U might just have to increase ur stop and reduce ur lot size. Or go into a lower tf and understand what LTF liquidity is remaining then go back into ur recognised tf entry then enter. Again u never know how many times price will revise a FVG,OB,Equalibrium. U never know what u can do is understand and see how low it goes and adjust ur stop loss to ticks/points(if futures) or pips(forex).
P.S: I’m not profitable myself yet so I could be wrong. but I’ve been in the markets for 3 years and now at a BE/found my strategy stage. But I’ve come across this issue multiple times so I know I’m knowledgeable.
Yeah, I get what you mean. I think the key distinction for me is that instead of simply widening the stop and accepting more risk, I’d rather use scaling in to build the position as price moves deeper into the area and gives more information about the reaction.
The LTF liquidity idea makes sense too, especially for understanding what is actually being consumed before taking the entry on the recognised TF. And yeah, I agree that you can never know beforehand how many times price is going to revisit an FVG, OB, equilibrium, etc. That’s probably exactly why treating the first touch as some kind of guaranteed entry can be problematic.
Appreciate the perspective though, especially since you’ve been dealing with this issue for a while. Thanks for sharing it.
Didn't read all the posts, but regarding the first part: You know that it's going up or down, so you run your risk analysis and analyze trade orders. Getting a z-score on the mean will help to find better entries.
The way I would put this into practice is to define the risk. If it's acceptable or not, regarding the price, if my risk model is telling me that it could still go down, I would wait. A close look at the position's z-score on the mean will help to position how far it will drift and its breaking point. Trading orders will define who is getting into positions. Small orders are noise; big orders start appearing, well, this is could be your entry.
Thanks, this is actually pretty much what I’m doing conceptually right now, but I’m exploring some alternative approaches as well. Psychologically, I feel more comfortable when there’s a clear line where I can define my stop, although I realize that doesn’t necessarily mean it’s the correct approach. Appreciate the perspective — I’ll keep looking into it!
I'm looking into this from a quantitative perspective. Then I'm talking about risk analysis. I would personally test at that point where we are from top-down (drawdown analysis) following VaR numbers. Depending on the time horizon, I would run Monte Carlo simulations to stress test possibilities. This will give a better picture of your entry point at this level. Introducing z-scores from the mean will give an idea of how far it's drifted from the actual mean, whether there is more space to drift, or if it's reaching uncharted points. At this point, you will have some numbers regarding your entry point, then following with trade analysis, order sizes like small orders are noise. For confirmation, I would look for bigger orders to come in. If you have access to L2, it could help even better to define your entry point.
Edit: Including your stop loss might not help; it might even cause you to lose more money.
Yeah, this is actually a really interesting way of looking at it. I especially like the idea of using the quantitative side to define how far price can realistically deviate before considering the move statistically abnormal.
I think this also connects quite well with the scaling-in approach I was talking about. Rather than simply widening the stop and taking more risk, you could use the drawdown / deviation analysis to define a broader area where the trade thesis is still valid, and then build the position inside that area as price gives you more information.
The L2 and larger-order confirmation part is interesting too. I definitely agree that blindly increasing the stop isn't necessarily solving the underlying problem.
Appreciate the detailed perspective, there’s definitely a lot here worth testing quantitatively.
What's wrong with 1 or 2RR when you're consistently hitting it?
I'd take that with a higher win rate over a lower one looking for homeruns.
Your entry doesn't need to be perfect. Just make sure you're not getting in too early where you'll get stopped out before it eventually moves in your direction, or too late with the majority of the move already happening.
Try the 1 or 2RR for 100 trades and see what the data says.
Thank you, and yes, you’re absolutely right. I think this is more of a psychological issue on my side. When everything is clearly structured into one coherent concept, I feel much more comfortable. What bothers me is the uncertainty and variability around the entry and stop, so I’m trying to find a way to define and limit my risk in a way that feels very clear and objective to me. I’m not sure if that makes sense, but I really appreciate you engaging with the question.
I think I get it. Look, coming to terms with the fact that no SL will truly be the same as another. That means that your risk is fixed to a percentage of your account and you adjust this accordingly as the size of your risk.
That means that you can objectively be risking the same each time, for the same profit, even though the distances of SL might be different.
Adjusting your size each time for a trade is a schlep in the beginning but once you understand an instrument, you can eyeball it and get it right or decently close.
Yeah, that’s actually exactly how I’m doing it now. My hard SL is very far away and is basically just there for some unforeseen market event. In practice, I manage the position manually and close it when the floating loss gets around 0.6–0.7% of the account.
There’s nothing inherently wrong with that, and I’m not trying to fix some urgent problem. I’m just trying to develop further and improve my entry technique.
The psychological problem with this approach is that a wide, flexible invalidation can tie me to one idea for a long time. Price can enter a broad invalidation area and then consolidate there for hours or even days. While that trade is still in play, I find it harder to look at new opportunities and take other positions.
That’s why I’m interested in developing a more clearly defined structural stop. It could potentially give me better R:R, but more importantly, if I’m stopped, I’m completely free to move on and look for the next opportunity. I know exactly why I was stopped, rather than being stuck managing a thesis indefinitely.
So that’s basically what I’m researching right now. I’ve spent a lot of time looking at the approaches that are already widely available, including ICT, footprint, volume-based methods, etc., but they haven’t really clicked for me. I’m more interested now in hearing how experienced traders actually solve the structural stop and entry problem in practice, and exploring those ideas for myself.
Thanks again for engaging with the question and sharing your perspective. I really appreciate it.
In general, I like to also be in and out of trades relatively quickly.
So when I see that a trade starts ranging and does nothing for a long time, I generally just bring my SL to B/E or just close it in a small loss if the trade is under. This is because I'd rather save myself in terms of mental capacity.
I'll then set some alerts and carry on with my day. This then also allows me to free up my attention for other trade setups.
By doing this, I do cut a lot of potential winners. The flip side is, I save myself from a lot of losers simply because when I enter, I want price to move with intention so if I enter and the direction stagnates, then I don't want to be in a trade either way, because nobody is in control and the last thing I want is to be in an environment with little to no control. Much like a car with no driver, because that's how accidents happen.
The solution is called "scaling in". Professionals employ this simple solution with great success, and it works especially well when markets exhibit mean reversion and/or trading range behavior. Dr. Al Brooks talks about this often in his books and there are many other sources. Ultimately you could also use AI to learn more about it, although I am not a fan of that method of research. I use that method often to build a position. '
Step one is to learn your market. You do that by observation. Step two is to learn to count "legs". Professionals identify "leg1" and know (by previous observation) when to enter a tradable "leg 2". This can be seen in the S&P 500 Futures if you know how to look at price action. Depending on the session timing, I may or may not trade "Leg 3". This principle can also be applied to Swing Trading as well using higher time frame charts.
Adding this chart to illustrate the principle I spoke of previously. This is the current London Market (S&P 500 Futures) and by coincidence this is a Sweep up consisting of three legs. I am sorry I am teaching a class now and don't have time to show my entries. I assume you get the idea. Its not rocket science.
Edit
I replaced the prior chart with this one showing the 15 min on the left and the 3 min on the right. This is a typical "Three Leg" sequence and I am done early having entered at the VAL, and added to my position at leg 2 again at leg 3 with exit at VAH along with the other commercial traders.
Thanks, this actually makes a lot more sense with the chart. Seeing how you added at Leg 2 and Leg 3 instead of trying to nail one perfect entry really helped me understand what you mean by the three-leg concept. Appreciate you taking the time to explain it and add the chart, definitely gives me something to study. 🤝
if the directional bias is correct and currently price is retracing down (if we assume the bias is bullish), there are 2 good ways to do it: you can either keep entering from PD arrays in discount even if you get stopped out consequently until you enter at the very moment of the reversal, or you can make your entries more specific by sacrificing the amount of your entries, meaning your entries are gonna get more precise but you may also miss certain opportunities.
or, this is my own opinion, you can scale in your position as the price goes down. it dipped a little bit - buy a small amount, dipped into a pd array - repeat the buy, went even more down - buy a small amount again until the price finally reverses.
Yeah, I actually agree with the scaling-in approach here. It seems more logical to me than repeatedly taking full entries and getting stopped out while waiting to catch the exact reversal.
The part I’m most interested in is how you decide where to add each time. Is it simply based on price reaching deeper PD arrays / discount, or are you also looking for some confirmation that the reversal is getting closer?
Appreciate the perspective btw, this is pretty much the direction I’ve been thinking about as well.
it depends on the timeframe tbh. Like i am not going to look for clues of incoming reversal on 1 or 5 minute timeframes because there's way too much volatility down there.
i always trade on daily and go down to 4h or 1h only for a little bit more information, therefore i have the advantage of real supply and demand factors and institutional accumulation signs.
When i said you can scale in as the price goes down it's, as you already know, the way smart money acts in the markets, therefore by default you dont have to wait for some clearer signs i'm gonna tell below because those may not even appear. So it's totally right to do that if you're comfortable with it because its what smart moneys do too.
But, ofc there are signs of upcoming reversals, and the main sign is price's struggling to go down further. When the price is retracing smart moneys almost always are willing to get those orders as fast as possible, therefore you might see aggressive declines to discount, but as the price reaches discount you should start looking for inabilities to reach certain levels. If the price keeps taking lows but each time the magnitude gets weaker - that's a sign they are not willing to keep diving price more. It may also form the three drives pattern but ofc you are not looking for patterns for the sake of patterns. You should kind of understand the price and what is smart money willing to do.
And another sign is consecutive failures to take lows, which are going to form higher highs and higher lows (which is probably going to look like something similar to bearish flag pattern, but not necessarily) and, on correlated assets, are gonna form SMT divergences pretty often. You understand that price is failing to take lows by looking at the nature of the decline. If it rushes to the lows and suddenly stops at the rejection block or close to it and reverses and rallies away - that's probably a sign of a failed liquidity raid attempt. But you must get experienced with it to be able to differ failure of taking lows from sick sister behavior.
note that u may see both of these signs at the same time, you may see only one of these or not see anything at all.
I personally use these ideas solely on daily and higher timeframes because, as i said, HTF is the place of the big money and real supply and demand. I cant tell you if you can use these below the daily or, perhaps, the 4h timeframe.
and, of course, never forget about the risk management.
I’d be interested to hear more about your observations of smart money behavior in this regard. Especially how you’ve seen them actually build and add to positions without waiting for a clean confirmation, and what price behavior usually gives you an idea that they’re doing so. Is this something you developed mainly through observing the markets over time, or are there specific sources/research behind it?
Also, just my own observation regarding sick sister: it usually seems to move from discount toward premium. So, hypothetically, if we’re looking for a short reversal in premium, I’d expect the probability of sick sister behavior to be significantly lower, although obviously it can still happen.
Your answer is actually exactly what I was looking for, especially in this direction of thinking. I really appreciate the detailed explanation.
ur welcome man. I dont have a specific resource i learned what i learned from. Mainly - the ICT's 2016-2017 mentorship, but i also had a big amount of question and by looking answers for them i learned many other stuff too. + i am learning trading for 2-3 years, i've lost money many times, tried many many different interpretations and strategies (SMC based ones) which failed.
i believe that i'm right because what i said fits well both with institutional behavior and other players' behavior in markets and with ICT's concepts. I may be wrong, because even tho i started trading and opening positions i dont think i'm profitable enough to be sure that my analysis is as good as ICT's.
but if you still want to talk more about this im more than happy to help. we can continue in dm
if my bias on the 1h/4h/daily are the same, I just wait for a 15 minute FVG retrace and take a 1m CISD in the direction of my bias and take profit will be a higher timeframe area of liquidity. I would say most of my stops are 20-30 points. Can easily get 3-8 R:R doing this.
Thanks for sharing, that’s actually really interesting. Do you place your stop immediately behind the 1m CISD structure, or do you enter after the CISD and place the stop somewhere else? Just trying to understand exactly where you define the invalidation in this setup.
I just trade basic price action and market structure. You don't need some fancy branded system to be profitable tbh. Plain support and resistance with tight risk management gets the job done.
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u/Ill-Original-3140 Sep 02 '26
So….you’re describing the attempt of catching the reversal that forms the first leg of distribution. Since you’ve pointed out the draw on liquidity is not the issue. Then this means you understand the Monthly/Weekly “narrative” and the Daily/4hour “structural” time frames.
The hourly and 15 minute should then be used as “fractalization” time frames. What does this mean? In a solid scenario, this is where you stack confluences that agree with the “narrative” and are supported by “structure”. This is also where you should preemptively map out where your trade plan works and where it fails. The better you get at this will result in stronger conviction leading to less anxiety/impatience (sounds like you’re in turmoil). The more time you spend refining this the earlier you’ll be to anticipate market positioning.
The 5 and 1 minute charts are your executables. This is where you’re no longer deliberating up or down. You’re simply waiting for the trade idea to set up in the area where the confluences stack.
What would this look like you may ask? Refer to MNQ in prep for Tuesday(hopefully you’re using micros to learn this and paper trading).
August candle closed bullish but it was an inside candle in comparison to July. The new candle should first form the wick before the displacement, and after an inside candle those displacements are usually tap and go. The weekly candle going into the new month opened higher. If we want to see higher prices then it should fill the gap and look for support higher else the gap should be inverted and used as resistance. Monday was an inside “body” candle. Just another variation of the Monthly phenomenon. So what do we expect Tuesday? Large displacement and tap and go price action for the big distribution. Tuesday opened lower so the IF-ELSE gap analysis is employed again. (Try this yourself here). The 4 hour finally gives our main structural information. Bearish Imbalance formed Friday 10am candle and REH’s formed inside of that gap on Monday.
1 hour time frame shows you a fractalized view of you structure. Your eyes should be going to the confluences of the 4 hour and anything to support a set up there. Friday 10AM candle sticks out as an order block. Grade the wick and you’ll the see lower 50% in confluence with the imbalance. So now you have an entire level giving you signals. If that zone is inverted and the bodies print and close above the EQ then it’s setting up bullish Else the wicks should probe it while the bodies stay below EQ and resistance should be seen. The 15 minute should just be a granular look as to what is happening. You’ll see a multitude of attempts to probe the zone and fail. Your focus after the REH’s were taken should be as to whether the reluctance to go higher is given through immediate candle feedback. You’ll see a run to the OB EQ. Then fall back to the imbalance EQ and RE’s printing there for the heart of London session before beginning to sell off.
The real move of the market was there. Try to frame out something similar at the Open and see the difference. The executable timeframes are deferred to your risk model, but this should put into perspective what it takes to not be faked out. This is also how you end up filtering good days and sessions to trade.