3 Early Entry Techniques To Improve Win Rate

Before we dive in, we wanted to lay out exactly what we’re going to cover so you can pace yourself ↓

• The Alternative Early Entry Pivot
  
• The Power of 3 Setup
  
• The Launch Pad Setup
  
• The High Volume Close Setup
  
• Entry and Exit Techniques
  
• 10 Detailed Examples
  

Alternative Early Entry Pivots: What To Look For, Where To Enter And Stop Out

As you know, the purpose of technical analysis is to identify Pivot Points — areas on the chart where momentum will switch from the sellers to the buyers or vice versa.

While traditional pivot points still work (with heightened volatility), you can improve your entry techniques and timing by identifying Alternative Early Entry Pivots.

Here’s a graphic helping you visualize what an Alternative Early Entry Pivot is ↓

As you can see in the image above, Alternative Early Entry Pivots are simply an area on a chart where you can manage risk prior to the traditional base pivots.

These areas should be well off the lows of the structure, but not so near the highs that the pivot could be used as a general base pivot.

The Advantages Of Alternative Early Entry Pivots 

• Improved R/R when compared to a general Base Pivots
  
• Less volatility as not as many eyes are on this spot
  
• Pyramiding positions becomes much easier 

Here’s a real-world example of an Alternative Early Entry Pivot from 2020 using TSLA | Tesla ↓

Entry & Exit Techniques

• Entry: Tight multi-day period on the charts prior to the general base pivot (you want this area to be well off the lows of the structure)
  
• Exit: Below the lows of the tight period (usually within 3-5% of your entry price)
  

Before we move on to the next alternative entry technique, let’s cover two more recent examples of the Alternative Pivot above: 

2023 NVDA | Nvidia

2024 FSLR | First Solar:

Power of 3 | What To Look For, Where To Enter And Stop Out

We’ll now take what we’ve learned in the Alternative Early Entry Pivots section above and apply it to our next combination of chart patterns, the Power of 3 & Launch Pad Setup.

This trade can be a multi-step setup, as a stock matures and exhibits accumulation signatures near its moving averages.

Here’s a visual depicting the first step of the setup, the Power of 3: 

As you can see in the visual above, the Power of 3 Setup occurs when a stock goes from trading below its 10, 21, and 50-day Simple Moving Averages to trading above in a single session.

Ideally, the stock puts in a couple days of tight action below the MAs prior to reclaiming, allowing us to implement the Alternative Early Entry Pivot & risk management techniques we learned above.

Power Of 3 | Key Traits

• Moving averages should be horizontal as price breaks through. Downtrending MAs decrease the probability of success of the setup.
  
• Volume should be decreasing while the stock is consolidating below the MAs.
  
• Volume should be increasing as the stock moves through the MAs.

Power of 3 | Entry and Exit Techniques

You should be looking to enter as the stock breaks above the consolidation highs, given the bunched moving averages are near this point as well.

You can also get creative with your entry techniques — building the position & buying more stock as price reclaims each MA throughout the session.

Exit criteria is fluid as well, but a general guideline is stopping yourself out as price breaks below the consolidation lows or closes multiple times below the MAs we’ve established our position against.

Here’s a real example of PUBM from May 17th, which triggered the Power of 3 Entry.

Here’s another recent Power of 3 Example, with OSCR:

In the example above, price consolidated for a couple of sessions below/near the MAs before reclaiming in a single bar. This allows us to manage risk while taking advantage of momentum shifts.

The Launch Pad | What To Look For, Where To Enter And Stop Out

Now that we’ve started our position on the Power of 3 Setup, we can look to add even more shares using the Launch Pad setup.

The idea here is that once an institution has shown its hand by pushing price up through multiple MAs (Power of 3), they’ll follow up and continue to build out their own positions over the next couple of days/weeks. We’re looking for the same moving averages that were acting as resistance to now become ones acting as support.

Here’s a real-world example to visualize just that: 

The Launch Pad | Entry And Exit Techniques

Entry techniques with this setup are plentiful.

• Enter on multi-day support at a rising MA
  
• Enter using a break above a consolidation high (think Alternative Entry tactics covered above)
  
• Enter using a well-known short-term pattern (Inside Day, for example)
  

Stop techniques usually all revolve around the stock breaking below recent lows (preferably within 3-5% of entry price) or multi-day closes below the moving averages of interest.

Remember: You don’t need to have a Power of 3 Setup trigger prior to this pattern for it to be valid.

High Volume Close | What To Look For, Where To Enter And Stop Out

While the two patterns we’ve covered above generally occur within a stock’s basing structure, the High Volume Close (HVC) setup/entry technique works best when a stock breaks out to new highs on a positive earnings report or reaction to news.

With the HVC we’re looking to buy into a gap, something most retail traders are scared to do:

High Volume Close | Key Characteristics

• Major gap up: Look for a gap up of over 10%. The bigger the gap, the bigger the surprise from institutions.
  
• Big Volume: Look for the Highest Volume In 1 Year (HV1), The Highest Volume Since IPO (HVIPO), or The Highest Volume Ever (HVE).
  
• Strong Closing Range: Look for a closing range greater than 75%. This will narrow down results and ensure you’re looking at the best of the best (especially when combined with the above characteristics).
  
• Fundamental Revisions Upwards: Be on the lookout for names that have revised their sales / EPS numbers higher over the coming quarters/years. These are the names that institutions will look to pile in to.

High Volume Close | Entry and Exit Techniques

There are multiple ways to enter and exit HVC trades. Let’s first study entry tactics:

1. Initial entry should be near Volume Support from the Gap Day.
   
2. Secondary entry should be near the High Volume Close (HVC) of the Gap Day.
   
3. Tertiary entry should be near any relevant moving averages on a lower timeframe, ensuring you’re able to manage risk effectively.

Here’s a good example of entry tactics one and two:

Exit tactics can be flipped from the entry tactics we’ve outlined above.

1. Stop out below the Day 1 volume support or the low of Day 1, as long as your risk is within your means.
   
2. Stop out on a close below the HVC
   
3. Stop out on a close below an intraday moving average, given that this MA is relevant to the stock’s character.
   

We’ll cover the ins and outs of this setup in a later edition of The TL Trading Academy. For now, let’s finish today’s lesson with some HVC Examples:

High Volume Close | Examples

Putting it all Together

While traditional pivot points & chart patterns still provide edge in today’s market, you must continually develop and adapt your trading strategy to stay ahead of the market. To help you do this, we’ve covered 3 different entry techniques in today’s edition of the TL Trading Academy:

• The Alternative Early Entry Pivots
  
• The Power of 3
  
• The Launch Pad
  
• The High Volume Close

We’ve also provided a dozen example to help you visualize what each setup requires in terms of look, as well as entry/exit techniques to start studying ASAP.

As with any new setup you decide to master in the market, it’s highly recommended you build your own chart repository of these setups & develop a strategy that fits you and your personality as a trader.