-->Here’s the thing:
No matter how many entry techniques you learn, there are only 2 ways to enter a trade. On a pullback. On a breakout. And that’s it.
But many of you struggle with this concept.
You probably have thoughts like…
-->How do I know where a pullback will end?
Breakout tends to fail, I hate trading breakouts.
Should I wait for confirmation, or not?
Don’t worry.
Because in this post, I’ll teach you the essentials of trading pullbacks and breakouts.
👉Where does the pullback end?
1. Towards previous resistance turned support
2. Towards previous support turned resistance
3. Towards a dynamic support
4. Towards a dynamic resistance
5. Towards a Fibonacci retracement
6. Towards a trendline
👉Do you wait for confirmation?
A confirmation is when a candle closes in your direction, confirming your initial trading bias.
This increases the probability of your trades.
While waiting for confirmation, you get a poorer risk to reward. Because you’re entering your trades after the price has moved in your favor.
And sometimes…
It could cause you to miss a big move.
There’s no right or wrong answer here, but rather what suits you best.
Whichever choice you make, you must know the possibility and consequence that comes with it.
👉How do you develop a pullback trading system to trade pullbacks?
Before you can develop a system, you need three things:
The condition for your setup
Your entry
Your exit
👉How do you find high probability pullback trades?
If you want to find high probability trades, you need to look at something called confluence.
What’s that?
A confluence is when 2 or more trading tools come together to give the same trading signal.
More confluence:
Higher probability trades
Lower frequency of trades
Less confluence:
Lower probability trades
Higher frequency of trades
-->It does not make sense to only wait for high probability setups because you may end up with very little trades.
