In considering trade entry guidelines, I think it's important to distinguish between those guidelines that form the base of strategic issues for trade entry from those more tactical implementation issues during real time setup analysis.

• Trading Plan Guidelines
• Setup Guidelines

If you don't establish a good base for this analysis in the trading plan, they you'll be faced with too many decisions in real time. You avoid this by laying out some specific strategic considerations for the trade entry phase or your positions ahead of time.

Because looking at real time price action is quite different than kitchen table analysis, you'll need more tactical oriented guidelines at that point. And that's the reason for the separation of this discussion into those 2 major topics

Of note is that to this post, I have a companion video of the same title: Critical FOREX Trade Entry Setup Guidelines that puts all of this together from a different view point.

If you've come from watching that video, then press on here. However, if this is your starting point, I might suggest that you read through this before watching the video. Or, if you want, you can skip to the bottom of this post to watch that video now.

What I've done for you is then take each major topic and identify just a few critical things that I think would be most helpful for you to consider. Though there are other considerations, I think these should give you a great base to develop your own implementation plan.

Here's an outline of the topics I'll cover in this post, and which I spoke about in the video:

Critical FOREX Trade Entry Setup Guidelines

I believe (as in I believe...) that you should either be a short term trader (scalper or day trader), or a long term trader (swing or position trader). I don't think it's wise to one day do day trading, and then decide that on Wednesday you'll swing....

Your price action look-back window is how far back on that time frame chart you will be incorporating into your current price action analysis. If you're trading on a 5 minute chart, then what value to you is there in looking back to what was going on a month ago?

This is different than using multiple time frame analysis. This is looking at the institutional trading activity as a function of macro economics of the market. If you don't get this: you should not be trading large lot size in this market.

This is the basis of multiple time frame analysis, but it is not multiple time frame analysis. It's rather establishing the time frames that you will use to do multiple time frame analysis.

Hopefully you understand the difference, because if you don't you'll end up solving the wrong problem in real time.

If you need to be out the door at 7:00 am to get to work, not returning until 7:00 pm, and you can't check prices between those hours, then your trading activity window (or windows) must be defined outside of those working times.

Seems pretty obvious, but the ramifications of not setting up a structured framework for the times where you will trade can be catastrophic. This trading plan guideline directly impacts real time trade entry setup analysis.

However, if you don't get this stuff established up front, then — in my opinion — you will find it very difficult to establish consistency in your trading.

And when positions fall apart on you, believe me when I caution you that you'll be compelled to do either or both: anticipatory trading (of which I've done numerous videos and other blog posts on), and/or revenge trading.

Close proximity is a function of entry point to profit target distance: if too close, then you have to pass on the trade.

Video: Critical FOREX Trade Entry Setup Guidelines