Timing your entries is crucial in swing trading. Enter too early and you may get stopped out on further weakness. Enter too late and you miss the best risk-reward ratio. This guide covers the most reliable entry signals for swing traders.
The Three Types of Entry Signals
Swing trading entries fall into three categories:
- Breakout entries: Buying when price moves above resistance
- Pullback entries: Buying when price retraces to support in an uptrend
- Reversal entries: Buying when a downtrend shows signs of ending
Each has different risk characteristics and requires different confirmation signals.
Candlestick Entry Signals
Candlestick patterns show the battle between buyers and sellers. These patterns signal potential entry points:
Bullish Engulfing
A large green candle that completely engulfs the previous red candle. This shows strong buying pressure overwhelming sellers.
- Entry: Above the high of the engulfing candle
- Stop: Below the low of the pattern
- Best at: Support levels, moving average bounces, after pullbacks
Hammer
A candle with a small body and long lower wick. Price dropped significantly but buyers pushed it back up by the close.
- Entry: Above the high of the hammer
- Stop: Below the hammer's low
- Best at: Support levels, oversold conditions
Morning Star
A three-candle pattern: bearish candle, small-bodied candle (the star), then bullish candle. Signals a potential bottom.
- Entry: Above the high of the third candle
- Stop: Below the low of the pattern
- Best at: Key support levels after a pullback
Volume confirmation: Entry signals are more reliable when the bullish candle has above-average volume. Low volume signals are more likely to fail.
Breakout Entry Signals
Breakout entries buy when price moves above a resistance level or out of a consolidation pattern.
Resistance Breakout
Price breaks above a horizontal resistance level that has held multiple times.
- Entry trigger: Close above resistance with increased volume
- Confirmation: Volume at least 50% above average
- Stop loss: Below the breakout level or recent swing low
Trendline Breakout
Price breaks above a downward trendline, signaling the downtrend may be ending.
- Entry trigger: Close above the trendline
- Confirmation: Retest of trendline holds as support
- Stop loss: Below the trendline or recent low
Pattern Breakouts
Price breaks out of chart patterns like flags, triangles, or cups.
- Bull flag: Break above the upper flag line
- Ascending triangle: Break above the flat top
- Cup and handle: Break above the handle high
Pullback Entry Signals
Pullback entries are often safer than breakouts because you buy at better prices with clearer stop levels.
Moving Average Bounce
In an uptrend, price pulls back to a moving average and bounces.
- Setup: Price above rising 50-day MA pulls back to the 20-day EMA
- Entry: Bullish candle at the moving average
- Stop: Below the moving average
Support Level Test
Price pulls back to test a prior resistance level that should now act as support.
- Setup: Price breaks out, pulls back to the breakout level
- Entry: Bullish reversal candle at support
- Stop: Below the support level
Fibonacci Retracement
Price retraces to a Fibonacci level (38.2%, 50%, or 61.8%) and bounces.
- Setup: Draw Fibonacci from swing low to swing high
- Entry: Bullish signal at 50% or 61.8% retracement
- Stop: Below the next Fibonacci level
Indicator-Based Entry Signals
RSI Pullback Entry
In an uptrend, wait for RSI to pull back to the 40-50 zone.
- Filter: Price above 50-day MA (confirms uptrend)
- Signal: RSI drops to 40-50 then turns up
- Entry: When RSI crosses back above 50
MACD Signal Line Cross
MACD crossing above its signal line indicates bullish momentum.
- Filter: Best when MACD is below zero (catching early momentum)
- Signal: MACD line crosses above signal line
- Entry: On the crossover with price confirmation
Stochastic Oversold Cross
Stochastic crossing up from oversold territory.
- Filter: Overall trend is up
- Signal: %K crosses above %D below 20
- Entry: When both lines cross above 20
Multiple confirmations: The best entries combine several signals. A hammer candle at the 20-day EMA with RSI at 45 and rising is stronger than any single signal alone.
Entry Timing Checklist
Before entering any swing trade, check:
- Trend direction: Is the overall trend in your favor?
- Market context: Is the broader market supportive?
- Support level: Are you buying at a logical support level?
- Candlestick signal: Is there a bullish candle pattern?
- Volume: Is volume confirming the move?
- Risk-reward: Is the potential reward at least 2x your risk?
Entry Methods
Market Orders
Enter immediately at the current price.
- When to use: Fast-moving stocks, confirming breakouts
- Risk: May get worse fill than expected
Limit Orders
Set a specific entry price.
- When to use: Pullback entries, specific support levels
- Risk: May miss the trade if price does not reach your level
Stop Orders (Buy Stops)
Order triggers only if price reaches a certain level.
- When to use: Breakout entries above resistance
- Benefit: Only enter if the breakout confirms
Common Entry Mistakes
Avoid these entry errors:
- Chasing: Buying after a big move when the stock is extended
- Anticipating: Entering before the signal confirms
- Ignoring volume: Low volume entries are less reliable
- Fighting the trend: Buying in downtrends hoping for a reversal
- Ignoring the market: Individual stocks follow the market
- Overcomplicating: Too many conditions means no trades
Track Your Entry Performance
Pro Trader Dashboard lets you track which entry signals lead to your best trades. Refine your approach over time.
Summary
Good swing trading entries combine price action, technical indicators, and volume confirmation. Use candlestick patterns to time entries at support levels. Confirm breakouts with volume. Wait for pullbacks in uptrends for better risk-reward ratios. Always check the trend, market context, and risk-reward before entering. Multiple confirming signals increase your probability of success.
Once you are in a trade, learn about exit strategies and holding periods to maximize your profits.