Is it okay to enter swing trade with limit orders and not stop orders?

beginning traders are not supposed to enter with limit orders

Generally, what Al means by this is using limit orders to buy below bars ( e.g, you have a 4 bar bull micro-channel, and you buy the low of the 4th bull bar with a limit order.) This is an example of what is to be avoided by beginners ( because in this case, the stop needs to be below Bar 1) and may require scaling in etc.

The way you describe it, you are saying to buy with limit order after the buy with stop would have triggered, which should be fine. The key is still to put the stop in the right place. As long as you are doing that, it should be fine.

p.s: In the image you attached, I cannot tell what your trade is? I see a big bull bar with arrow below, but not sure why you would buy above the bar?

Thanks for your response Rajesh.

Generally, what Al means by this is using limit orders to buy below bars ( e.g, you have a 4 bar bull micro-channel, and you buy the low of the 4th bull bar with a limit order.) This is an example of what is to be avoided by beginners ( because in this case, the stop needs to be below Bar 1) and may require scaling in etc.

I see. Yes, that makes a lot of sense. I have been in the markets long enough but I am a beginner in PA. Honestly, I can't process scaling in yet.

The way you describe it, you are saying to buy with limit order after the buy with stop would have triggered, which should be fine.

Actually, if memory serves right, I think I've seen Al mention entering with stop orders for beginners because it increases the probability of success a bit - since the market was already moving in the direction of the trade, entering with stop orders increases the chances of success a little. Don't remember where I saw it, maybe in one of his books and therefore the reason of my doubt.

The key is still to put the stop in the right place. As long as you are doing that, it should be fine.

I think, if I identify the setups right, I am capable of putting the stops in the right place or at least that's what I think. Since, I am looking to swing trade only - I have made my peace with re-entering if the context and premise are still valid after the stop is triggered once.

p.s: In the image you attached, I cannot tell what your trade is? I see a big bull bar with arrow below, but not sure why you would buy above the bar?

Yes, that is understandable. I realise now that I didn't elaborate on it, my bad. My reasoning of taking the trade - the market gapped down and started falling with lots of tails, creating gaps and then filling those gaps. The bear bars 1 & 3 had bad FT on bars 2 & 4 respectively. Since, 50% of directional moves on the open fail and there is also a 50% chance that the market places either the high or the low of the day within the first 6 bars, I thought the 5th bar was a strong SBU to warrant at least a small second leg up. The 5th bar also closed above the 50% PB of the bear selloff of the first 4 bars. Big up, Big down creating big confusion meant that the market was in a TR and the odds felt better that the market might try and test the 20 MA and HOD above. If the market were to selloff, at it would have to create a low 2(DT) setup at least after the strong SBU on the 5th bar. Now, since the market was at the 50% PB area, chances of bull and bear was 50-50 and I needed 1.5 RR ratio which was not existent if the market tested the MA and high above. So, it felt reasonable for me if the market pulled back, I'd have the 1:2 RR ratio which would mean that I had structured a reasonable trade setup.

Sorry for the long paragraph, it might well be possible that I read the setup wrong, I am still in the learning process of identifying these. I tally my readings on the ES everyday with the chart posted by Al. I get many setups right but there have been occassions where I identified a setup which Al didn't mark or couldn't identify setups Al marked(rare). Feel free to share your insights and advices if any on this regard, it'd be most welcome. I am in the learning phase after all.

Well, my own analysis would be - after 4 bear bars, you are looking for ways to sell and not buy ( Yes, there is opening reversal, but usually you want a good signal bar. b4 is not a good signal bar). And there will be more sellers above the big bull bar, so you don't want to buy above it with stop.

in fact this is an example, of buying below bars  or selling above bars with Limit Order. For example, after b5 and b6, if you think it will go up for scalp, you buy the low of b6 with a limit order, put a stop below b5 and maybe go for 1:1?? [but then this is what usually is not meant for beginners)

Again based on your lengthy paragraph, I still cannot tell where your stop was, and your profit target 🙂

My stop was below bar 4 and target was a test of MA above. Sorry for the lengthy paragraph once more 🙂

I realise now that it was probably not an ideal swing trade suited for me. I'll try working on my process even more.

Thank you for your help and insights.

ok. Like I said, after 4 bear bars, and just based on b5, I wouldn't expect a test of MA before a 2nd leg down (which could go below b4 and take out your stop). Now after 3 bull bars, maybe it becomes 50/50 for both bulls and bears, in which case I would wait for more clarity...

After 3 bull bars, the market almost reached the MA and didn't allow any buy setups till that point and it entered a TTR thereafter(BO mode?). So, the first swing trade would have been only after any BO of that TTR, I'm assuming?

Thanks for your help once more. I'm starting to think that there might not be as many swing setups as I think I'm seeing 🙂