WHAT CONSTITUTES A GOOD ENTRY ?

A good entry is one that initiates a trade at a point of low potential risk and high
potential reward.
A point of low risk is usually a point from which there is little
adverse excursion before the market begins to move in the trade’s favor.
Entries
that yield small adverse excursions on successful trades are desirable because they
permit fairly tight stops to be set, thereby minimizing risk.

A good entry should
also have a high probability of being followed quickly by favorable movement in
the market. Trades that languish before finally taking off tie up money that might
be better used elsewhere; not only do such trades increase market exposure, but
they waste margin and lead to “margin-ineffCent” trading or portfolios.

Perfect
entries would involve buying the exact lows of bottoming points and selling the
exact highs of topping points.

Such entries hardly ever occur in the real world and
are not necessary for successful trading.

For trading success it is merely necessary
that entries, when coupled with reasonable exits, produce trading systems that
have good overall performance characteristics.