Trading successfully usually involves using effective trading techniques and strategies. One of the more common strategies is the use of trade filters and trade triggers as a means of entering into trades. The effective use of trade filters and trade triggers will enable traders to base their trading activity on careful analysis instead of gut feel or guesswork.

Trade Filters

Trade filters are basically a set of conditions that a trader may set that before any trade entry. Certain conditions should first be met or occur before a trade may be “triggered” for action. It can be number of factors that may include a time period, a certain price limit, or a certain trend of a moving average. Trade filters usually should precede a trade trigger. Once the trade filters are met, it activates the trade trigger for action. Trade filters can usually be considered as a safety measure for a trade trigger.

Trade Triggers

Trade triggers can simply be known as that line where a certain trade may be entered. A trade trigger tells a trader exactly what to do in the instance it is met. It can mean the action that a trader is required to do after the trade filters set up beforehand are met. Trade triggers provide traders with the means to specify a certain trade entry. Trade triggers should always be direct and clear. There should be no room for vagueness when setting any trade trigger. The simpler and the clearer the trade trigger is, the better.

Using Trade Filters And Triggers

The effective use of trade filters and trade triggers enable any trader to determine more profitable trades based on data and information. The trade filters provide the setup while the trade triggers provide the action required. Using them wisely and effectively in any given trading system can be a powerful tool to use for profiting from trades.