Today's Quote: “Timing is everything." - Proverb.

We have finished talking about universes and creating the first few types of watchlists for now. We are going to move on and pick up on the concept of "entries".

The first thought on entries is so very basic; yet overlooked very often. The first concept is that in order to have an entry, you must have an underlying strategy. In other words, there are strategies we use to play certain issues at certain times. When that strategy arises it has a ‘built in’ entry or series of options for entry. Without a basic strategy there can be no play and therefore no entry.

For example we will frequently get questions asking to evaluate a play taken that was entered when the 5-minute high was traded over. They want to know why the play did not work. The question that needs to be asked back is “What was the strategy you were playing?” They will write back and say “the 5-minute high.” The problem is that is not a strategy, it is an entry to other strategies.

No matter where or how you learned to trade, a 5-minute high is NOT a strategy. Almost every stock in the market takes out its 5-minute high or low. Now, there are several strategies that call for a 5-minute high to enter. For example several gap strategies may require a five minute high or low to be traded above or below in order to initiate the trade. Many traders may also wait for a five-minute high or low before going long or short on a swing trade.

So remember that entries are specific to certain strategies and cannot exist in a vacuum we will continue this discussion of entries remainder of this week.