Trading Pullbacks – Online Course Discount


Following is a brief excerpt from my online
course on trading pullbacks. I hope you enjoy it. To receive a discount coupon for the complete
course, check the link in the description below. Here’s a price chart with an uptrend. We’ll
review what we’ve learned up to this point, then set our stop-loss. When we apply the Keltner Channel, it shows
that price has pushed above the outer band. We’re now looking for a pullback. Next, we set the parameters of our target
pullback range. Module 2.4 covered this step. Fast-forward a few price bars, and a pullback
has indeed occurred. The target pullback zone also shifted slightly,
in response to price movement. Based on what was discussed in Module 3.1,
we note the pullback doesn’t display undue conviction. This is still a trade candidate. Move forward another price bar, and we have
with-trend momentum. This was covered in Module 3.2. We’ll enter a long trade. Now it’s time to place the stop-loss. Here’s the last low point that occurred
right before the setup trend leg. We want to be below that, with a small buffer. Next let’s make sure we’re at least 2 1/2
ATR’s away from our entry. Note quite; so, we’ll push the stop back
to that point. Now it’s set. Next let’s look at a downtrend example. In this chart, the last price bar breaks below
the channel band. The next step is to set the target pullback
range. Price then moves sideways, with reduced volatility. As the target area adjusts to these changes,
it encompasses the current price action. This is a valid pullback. The next bar rallies, then fully reverses.
This with-trend momentum triggers a short entry. Referencing the last high point before the
setup leg, we set our stop loss. This is sometimes open to interpretation.
We could have just as easily chosen this point. In either case it’s outside the 2 1/2 ATR
range, so no adjustment to stop location is needed. A primary reason wider stops are favored,
is to accommodate something called the complex pullback. That’s the subject of the next
Module.

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