Lesson 8: Where to Enter a Trade

📘 Day Trading in 5 Minutes · Lesson 8 of 10

In Lesson 7 you learned the three patterns worth knowing on day one. Spotting the pattern is the easy part. The hard part, and the part that decides whether you make money, is where you click buy.

A great pattern with a sloppy entry still loses. The same setup can be a winner or a loser depending on three seconds of timing. So let us talk about how to time the entry instead of just reacting to it.

Anticipate or confirm

There are two ways to enter, and they trade off against each other.

Anticipating means buying before the move happens, betting the pattern plays out. You get a better price, but you are guessing. If the breakout never comes, you are already in a position that is going nowhere.

Confirming means waiting for the move to actually start, then jumping in. You pay a slightly worse price, but you are reacting to something real instead of a hunch. For beginners this is almost always the right choice. Let the chart show its hand first.

The break and the retest

Here is the cleanest entry for a beginner, and it builds directly on the breakout idea from this lesson's deep link.

When price breaks through a level, the first push is often fast and emotional. Chasing that first candle means buying at the top of a sudden spike. Instead, many traders wait for the retest. Price breaks the level, pulls back to touch it from the other side, and then holds. That old resistance becoming support is your confirmation, and it usually gives you a calmer, lower-risk entry.

Not every breakout retests, so you will miss some. That is fine. You are trading the cleaner version on purpose and skipping the messy ones.

Do not chase

Chasing is buying a move that already ran because you are afraid of missing it. It feels urgent. It is almost always a bad fill.

By the time a stock is up sharply and every chat room is shouting about it, the easy money is gone and you are buying from the people who got in earlier. If you miss an entry, let it go. There is another setup coming. The market runs all day, every day, and no single trade is worth chasing into a bad price.

Read the entry candle

The candle you enter on tells you whether buyers actually showed up. Lean on what you learned in Lesson 2 here.

A strong entry candle closes near its high with a full body and decent volume. That is buyers taking control. A candle that pokes above the level but closes back near its low, with a long upper wick, is a warning. The breakout got rejected, and you do not want to be holding into that. Wait for the close before you commit, because an intra-candle spike can vanish in seconds.

Next up

You know where to get in. But knowing your entry is only half the trade. Lesson 9 covers the other half: where to get out if you are wrong, how much to risk on a single trade, and the position sizing math that keeps one bad call from wrecking your account.