Trade SD Like a Sniper with the Anchor Entry Technique

The real nitty-gritty of any supply and demand trade, heck, any trade at all, is nailing that perfect entry.

Here’s the drill:

But ever found yourself completely missing the entry, sitting on the sidelines watching the action pass you by? Or maybe you didn’t catch a valid signal, resulting in a missed trade opportunity?

I’ve been there, done that.

It was a recurring story, and frankly, it was getting old.

So, I put on my thinking cap and came up with a new entry method. It lets me jump in even when no valid pattern or signal appears:

The Anchor Entry.

Curious to see it in action?

Well then, let’s dive in…

The Frustrating Truth About Entering SD Trades (and How to Overcome It)

Entering supply and demand zone trades can be tricky business. The conditions are so specific that it’s all too easy to miss out on successful trades.

Here’s the catch:

1. Pin Bars and engulfing patterns must form within the zone.
2. The pattern must form either inside or after price touches the edge.

Sounds tough, right?

These conditions make it quite a challenge to secure a successful entry. If the right conditions don’t align, we miss our entry – no trade for us..

Let’s take a look at this example…

To enter this demand zone trade: a bullish engulfing pattern or a bullish pin bar must form somewhere within the zone upon re-entry.

Sounds simple, huh?

Well, hold your horses…

These patterns must meet certain criteria:

1. The pin must boast a large wick.
2. The engulfing pattern should include a sizable second candle.

So, even though we might see multiple pins or engulfing patterns form in the zone, we can only use them for entry if they meet these specific conditions.

Plus, these patterns must form INSIDE the zone BEFORE price reverses.

This sets a time limit for WHEN the signals can form and also gives us a defined area – the zone – WHERE they can form.

Now, let’s see what happens next…

Price falls into the zone and reverses.

Turns out we were right – this zone was strong indeed!

But, take a closer look at the entry signals and where they appeared within the zone. We saw multiple bullish pin bars and engulfing patterns form. However, only one of these offered a valid long entry – the pin marked with an arrow.

The other signals?

Well, they didn’t meet the criteria…

1. The pins were small with tiny wicks.
2. The engulfing patterns were also undersized with a small engulfing candle.

Now, focus on where the valid pin formed…

This bullish pin popped up right before the price reversed out of the zone.

What are the odds of spotting this pin after the other signals were invalid?

Pretty low, right?

See the issue with entering supply and demand zone trades now?

With so many different variables in play, luck ends up playing a massive role in whether the right pattern forms at the right time for you to enter.

• Do the right patterns appear?
• Do the patterns meet the correct criteria?
• Do the patterns form inside the zone before the price reverses?

It’s incredibly easy for one or more of these variables to not align, leading to a failure in providing an entry signal into the reversal.

If a signal forms when you’re not watching, you miss the trade.

If no high-quality signals form, you can’t take the trade, even if the zone is strong!

But don’t lose hope, there’s a fix for this…

Enter: The Anchor Entry.

The anchor entry REMOVES the key variables that can make entering supply and demand zone trades so limiting and frustrating.

How, you might ask?

By using the zone as an anchor point rather than a precise entry location.

Let me explain…

Let’s say you missed the bearish pin entry into the supply zone, or maybe no signal appeared, even though it was a powerful zone.

You’d be spitting feathers, we’d all be!

But imagine this – instead of tossing the trade aside and moving on, you could still hop on board?

And you know what, you can…

As soon as price reverses out of the supply zone, it’s a pretty safe bet the reversal is now underway and starting to kick in.

We can’t say for sure price will keep falling, but the odds are stacked in that favour:

• We know this is a powerful zone.
• We know price just reversed and started falling.

My point?

Why not jump in short now and position our stop above the zone? Just like we would trading the zone using a price action pattern.

We could still caputre the reversal even though we missed the entry.

Sounds logical, right?

Sure, the risk is a little higher, but we can bring it down as price falls.

The reversal out the zone has already formed a downswing with a significant swing high. We can move our stop down to this swing high as price falls and reduce out risk to a fraction.

And, as you’ll see…

Price keeps falling, and we pull off a successful short trade.

See the power of anchor entry now?

By entering once price had already reversed out the zone, we managed to salvage our trade. It didn’t matter no entry signal formed or that we missed the inital bearish pin bar signal.

We could still get in by waiting for price to reverse and using the zone as an anchor point for our stop.

Our inital risk and entry were a little higher, sure, but nothing to write home about – nothing that seriously messed with our risk vs reward ratio.

This is what the anchor entry is all about!

The supply or demand zone, instead of being the entry point, plays the role of an anchor.

We use the zone as the anchor – the spot where price should reverse – and the reversal itself acts as our entry into the trade with the zone being our stop location.

We cut out those pesky variables that often throw a spanner in our entry.

Now, we don’t have to sweat about…

• If a candlestick pattern forms.
• If the pattern has the right characterisitics.
• If the pattern forms inside the zone or misses.

We can just wait for the reversal, then use that as our ticket into the trade.

For More Confirmation, Wait For A Large Range Candle

You’re free to use the anchor entry at any time, given price has moved away from the zone, confirming the reversal.

But, for those after more reassurance…

Wait for a large range candle to form during the reversal before entering. In layman’s terms, we’re talking about a candle that looks something like this…

These large range candles are a clear sign retail traders are closing their losing trades (shorts, in this case) en-masse.

That’s why price jumps higher and forms the candle.

The shorts must close their losing trades by buying back what they sold at a worse price – in essence, becoming buyers. Thousands of traders closing through buying obviously causes price to skyrocket, leading to multiple bullish large range candles forming.

With this in mind:

Entering after the first large range candle offers additional reassurance price has indeed reversed.

If the shorts (or long’s in the image above) are closing, we can bet our bottom dollar there’s a solid chance of price continuing to fall.

The initial wave of closures (the large range candle) will increase the downside momentum, prompting even more traders to close losing longs and enter short, resulting in an even bigger reversal.

The Bottom Line

Why not give the anchor entry a whirl today?

Sure, the inital risk is a tad higher, but that’s a small price to pay to potentially get into a successful trade. And after moving the stop to breakeven, which you can do almost immideatly after entering, the risk is no higher than a normal supply and demand trade.

It might just be your new secret weapon!