If you want to buy a pair at a lower price and think price action will go lower before price action goes higher in your trade direction, then use a pending buy limit order which is placed below current price and if your entry price is hit on its retracement, then buy limit order is activated. You are in trade.
Two risks are price retracement does not hit your entry price and take off in a bullish or upper wards direction without your trade and/or price retraces thru your entry prices and keeps going lower and hits your stop loss.
To avoid some of these use major support or resistance areas, previous price action left on chart and fib ret tool, which a lot of price reversals hit the 50% to 61.8% then reverse up in bullish trend or major trend direction. On EurUsd daily chart, noted 1:4 risk reward trade with a 40 pip stop/160 pip target.
Use the right risk management for your account size and trade according to your plan. Good luck.
Two risks are price retracement does not hit your entry price and take off in a bullish or upper wards direction without your trade and/or price retraces thru your entry prices and keeps going lower and hits your stop loss.
To avoid some of these use major support or resistance areas, previous price action left on chart and fib ret tool, which a lot of price reversals hit the 50% to 61.8% then reverse up in bullish trend or major trend direction. On EurUsd daily chart, noted 1:4 risk reward trade with a 40 pip stop/160 pip target.
Use the right risk management for your account size and trade according to your plan. Good luck.