Chart of the Day: The need for entry triggers

This is why we have entry triggers. I posted this chart pointing out a bear flag in EL on the day marked with an arrow, suggesting that a good entry would be to enter on a weak close. A few days later, the stock is higher, but disciplined traders should never have taken the trade. Think about it like this: the pattern shows the potential in the market, but the entry trigger assures that short-term conditions are favorable for the trade—in other words, we’re jumping on a train that is moving in the right direction. Identifying potential patterns in the market is part of the problem, but you will likely find your results improve dramatically if you add an entry trigger to the trade.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.