Determining Pullbacks

[Alpha Trader]

I've been working on the analysis of pullbacks and as easy as they may seem, they can also be a source of getting involved in trapped trades. I've covered a decent amount of material and concepts over the last few years, but would welcome some different views.

1) How do you determine if an emerging pullback is simple (one counter-trend leg) or complex (two or more counter-trend legs)?

2) What decides your entry point?

3) How do you deal with entries that trap you?

 

[Bry]

2. looking for candlestick pattern, then enter buy two ticks above/sell two ticks below; long tails such as hammers/shooting stars are good
3. GET OUT if lots of doubt...stop loss can be below entry day or entry candle... stop loss below/above a long candlestick tail can work

other:
....."pull back" must occur in established trend, such as above/below 50 moving average; fishing tops/bottoms is different

 

[Turveyd]

We talking M1 or D1 trading here first and what kinda market ??

M1, stick to Range and Range with direction if there is 1, pull backs and tricky to trade as no way to tell, when there pull back or a change of trend until after.

Obviously, get in near low, tight SL, getting in on the move up needs to big a SL with too high odds on goin back to against you.

Trading is tough!!

 

[wartrace]

Take a look at orderflow.

 

[wrbtrader]

Time of day and what caused the trend or strong directional price movement before the pullback is what I concentrate on. Simply, I want to know when the trading instrument tends to be active and when it tends to be less active because I really don't like trading in pullbacks during less active periods and I don't like pullbacks when I don't know what caused the trend or strong directional price movement prior to the pullback.

Gotta know the trading instrument before trading it.

 

[Autodidact]

Don't think like the herd, remember, most lose.

 

[Alpha Trader]

2. enter buy two ticks above/sell two ticks below

@Bry I used to enter using 1 tick above/below. However, that had a slightly higher fail rate than the 2 ticks and that is what I moved to. However, now depending on the trade, I will subjectively choose entry with 1 tick or 2. For instance, I will use 2 (occasionally 3) ticks for breakouts from ranges that have persisted for over an hour.

long tails such as hammers/shooting stars are good

These are good, but again depending on context, they have failures due to hammers/shooting stars shaping out as ranges on lower time-frames. An entry on the break is at the top/bottom of this range and tends to fail as the range attracts it back in. I usually will time these with a second test of the range and that gives me a better chance.

 

[lawrence-lugar]

Gotta know the trading instrument before trading it.

This is a big one.
You gotta know it on another level...like it's your soulmate.
Trading is kind of sometimes hard to explain...it's just something you pickup on a 6'th sense from watching and learning about it so long.

 

[Redneck]

I've been working on the analysis of pullbacks and as easy as they may seem, they can also be a source of getting involved in trapped trades. I've covered a decent amount of material and concepts over the last few years, but would welcome some different views.

1) How do you determine if an emerging pullback is simple (one counter-trend leg) or complex (two or more counter-trend legs)?

2) What decides your entry point?

3) How do you deal with entries that trap you?

Alpha

You willing to take this to PM - I'll share my take on it Sir

Nothing super special - just plain ole common sense

RN

 

[der_kommissar]

After the market has tested it's intra-day high, the previous close or any other significant resistance area, those pullbacks aren't nearly as reliable as buying the pullbacks prior to the move to test those price levels...It's like the market has a magnet attached to it and it has to run those stops or test those levels, but once it does and pulls back, I don't want any part of it.