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Pullback

Heikin Ashi candlesticks overview Heikin Ashi candlesticks gives a smoother appearance by reducing some of the market noise, hence making it easier to spots trends and reversals. There is a tendency with Heikin-Ashi for the candles to stay red during a downtrend and green during an uptrend Heikin-Ashi calculation uses a formula based on two-period averages How to read Heikin-Ashi candles Green candles indicate an uptrend and in case with no lower shadows the move can be assumed a strong uptrend Red candles indicate a downtrend and if with no higher shadows a strong downtrend Candles with a small body surrounded by upper and lower shadows indicate a potential trend change or trend pause the Heikin-Ashi candlesticks do not show the exact open and close prices for a particular time period because they are averaged hence who need to exploit quick price moves may find Heikin-Ashi charts are not responsive enough to be useful For whom interested with Higher Time Frame Candle presentation on lower time frame chart including Heikin-Ashi candles are invited to check HTF Candles
Education
by dgtrd
147
IDF Play - Fading a daily inside barSTATEMENT This publication aim to explain as detailed as possible the IDF play strategy. To do so, we will analyse USDCAD chart and the inside bar that was printed on 22-04-2021. RATIONALE Why trading the failure of an inside bar? It's commonly known that retail traders will identify an inside bar as a reversal candle. Institutions and big players know how retail traders play these kind of candles and will most likely fade them. Also, before directly trading this technique, please backtest it through different time period (what could have workd in 2020 might not work anymore in 2021 as it's well known that market behaviour can change) and different currencies (an high strike rate with EURUSD doesn't mean it will work with GPBUSD for example). I would consider it as an edge it win rate is above 60% adn the ratio is in average above 1% ROI. INSIDE BAR What's an inside bar? It is a candle in which the high to low range is smaller than the prior candle; i.e., the high is lower than the previous bar's high, and the low is higher than the previous bar's low . THE PLAY First of all, we identify an inside bar on the daily time frame: In this particular trade, our inside bar can also be identified as a Doji candle (another reversal candle), reinforcing the retail trader's sentiment that we are about to witness a trend reversal (meaning that most of them will be placing an order to go long with a stop loss below the wick of the candle). Additionally, if we check the prior day we notice that price printed an Outside bar (or Engulfing candle), confirming our bias that we are most likely to find opportunities to go short. Next step is to go down to the hourly time frame and look for a significant leven from which we can short. So far in below screenshot we have identify a significant support level where price was rejected 6 times. As we would like to find an opportunity to go short, we need to wait for the price to break through this level. Now, as we have short bias, we need to wait for the price to break through that support level, so we can consider placing an order (sell limit). With 6 touches on the support level, market is telling us that we have a strong level, having saying that, we won't need any further confluence to look for entry after the breakout. After breakout is confirmed (1) and there is no an immediate pullback (few candles between breakout and pullback to significant level) we can place our order (in this case, sell limit). We do not place our stop loss above the latest lower high; we play it safe and place it at 1.25104 (the prior lower high). Take profit is placed at a weekly level we have identified we do believe can represent a valid target. THE RESULT
Education
by cmacquet
2
How to trade a temporary pullback and a breakout gap? How to trade a temporary pullback and a breakout gap? Some security will make a temporary pullback before making a new high with a breakout gap. How to trade a temporary pullback? A trader may be bearish during the temporary pullback formation. A trader may consider going short during this pattern formation or the trader may consider waiting to avoid losses during the price drop. How to trade a breakout gap? A trader may be bullish when a bottom is identified. A trader may consider accumulating shares in anticipation of a breakout. What are some of the reasons one may fail to trade this pattern? Correct identification of the chart pattern is essential to trade this pattern. Not all stocks will pullback before a breakout to a new high. Possibly misidentification of a trend change as a pullback. Possibly a temporary bottom was identified, but the downtrend continued and changed the pattern. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NASDAQ:NFLXEducation
by GreenfieldAnalysis
1
How to trade a throwback and a pullback?How to trade a throwback and a pullback? What are a throwback and a pullback? A throwback hits a new high price, but will quickly reverse and return to the initial price prior to the breakout. A pullback hits the previous major support, and will quickly resume the uptrend. How to trade a throwback? What are some of the reasons one may fail to trade a throwback? Go long when the price breakout higher, and go short when the price start reverses direction. One may fail to trade a throwback possibly due to failing to differentiate a throwback from a potential new bull run. Also, possibly the trader correctly identified the pattern, but the trend reversed suddenly and trapped the trader. How to trade a pullback? What are some of the reasons one may fail to trade a pullback? Go short when the price breakout lower, and go long when the price starts going higher. One may fail to trade a pullback possibly due to failing to differentiate a pullback from a trend reversal. Also, possibly the trader correctly identified the pattern, but the trend reversed suddenly and trapped the trader. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NYSE:NIOEducation
by GreenfieldAnalysis
Learning You can see today's rally in bank nifty . Generally what happens if there is a big rally then after achieving the top the index will retrace 20-30 to a maximum of 50 percent. Hence whenever you see green candles at 30 or 50 % levels of fibo retracement you can still go long in direction of the rally. This is the move where many retailers get trapped after selling and the market bounces sharply which you can see here. If it breaches 50 percent then you can say the trend may have changed for downward 300-500 points.
NSE:BANKNIFTYEducation
by vivekz_142
1
GBPJPY 4H 15M RABBIT TRAIL CHANNEL TRADING STRATEGY LONG TRADERule #1: Draw a channel on a 1 or 4 hour chart. Rule #2 Identify If there is a Breakout on 1 hour or 4 hour chart. Rule #3 Wait for a Pull Back on a 15 minute Chart. Rule #4 After Pull Back on 15m, Make Entry. Rule #5 Find a Stop Loss Placement. Rule #6 Ride The Rabbit Trail to 50 pips with a TP Order! Rule #1: Draw a channel on a 1 hour or 4 hour chart. The first thing you need to do to get this strategy started off is you need to find a channel on a four hour or one hour chart. Remember there must be two resistance and support points to validate a channel. This strategy can use many currency pairs. Make sure you search through all of them. Many say that they “only trade EURUSD.” There is no reason for that.. Get in the charts and see for yourself! There are channels everywhere. This strategy will work with any currency pair. The opportunities are endless.. Not too bad. So basically all you are doing here is drawing parallel lines on the tops and bottoms of the price movement. This example hit a quite a few resistance and support levels which means that when it breaks this channel it has the potential to make a huge move! Rule #2 Identify If there is a Breakout on a 1 hour chart. The way you find the trade is to find a breakout of the channel that you drew on your chart.. In a perfect world the support and resistance levels will hold on forever.. But the world isn’t perfect.. So that’s why we have what is called a breakout. This breakout happened on the top of the channel. So that means you will BUY. If the breakout happens on the bottom of the channel then you will SELL. Great! We have breakout candle let’s get in the trade and follow the rabbit trail to pip glory! Rule #3 Wait for a Pull Back on a 15 minute Chart. Why wait? Because the market is money grabbing machine, and they want your hard earned cash! You wait because sometimes the market does a “head fake” and turns against you. So if you would have got in this trade right when it broke out of the channel you would soon have got stopped out. That is why it is so important to Wait for it to pull back. This is where many people struggle. They see that it broke out so they want to click BUY or SELL right now!!! Think about the sayings you have heard since you were a child, “Patience is a Virtue,” Or “Good things in life take Time” Just be patient and wait… This trade would not have burned you, but countless other trades would have! Think about the pull back as the candle that closes towards the channel. So if the pull back is above the channel you are looking for a bearish (red) candle. If the pull back is below the channel you are looking for a bullish (green) candle. *We only need one of these pull back candles on a 15 minute chart. Once this happens move on to the next step. Rule #4 After Pull Back, Make Entry. We are getting so close to getting on our rabbit trail to make some serious pips! Our lines are drawn, we identified the breakout, and waited for the pull back. It is now time to make our trade. The criteria to make an entry after a pull back on a 15 minute chart to enter a trade is that there must be two 15-minute candles that support our trade. If it is a BUY trade we want to see TWO bullish (up) candles after the pull back. If it is a SELL trade we want to see TWO bearish (down) candles after the pull back. Enter after the two bullish 15 minute candlesticks close. So again, we WAIT for a pull back candle to close and then we need two BULLISH (green) candles to close to many an entry. Rule #5 Stop Loss Placement This is probably one of the most important rules of the strategy. You always need to place a stop loss somewhere for a reason. If you are throwing in stop losses 5 to 10 pips from your entry order just because someone you read that somewhere, then you are without a doubt treading some dangerous waters. In a Buy The stop loss will be placed in the channel below the last support point. In a SELL The stop loss will be placed in the channel above the last resistance point. That way if it does come back in the Channel it will hit the support level and end up going back up in a bullish movement. Rule #6 Ride The Rabbit Trail to 50 pips! The last thing you need to do is know when to exit the trade. This strategy goes for a 50 pip target. So when you make your entry, you calculate 50 pips take profit mark and place it. The rabbit trail may be 2 hours, or could take as long as two days. You have your target so really you have nothing else to do but sit back and watch your trade make you some money! Stay in the trade and remember your rules. You are going for a 50 pip breakout trade!
Education
by Tradingstrategyguides
2
How a RETEST works - with Trade IDEA - Pullback explained(Note for professional Traders: If you have some experience on this strategy or if you feel like something is missing, please comment, so everyone can benefit from it :) Thanks in advance!) Hi Traders! Have you ever been in this situation: The market is clearly in an Uptrend. Big, Green Candles moving up. Making higher highs and lows. Breaking all the major Resistance. Because of all of this, you hit BUY. Now... The market makes a 180° U-turn. You see your trade is losing. The Big green candles are now red candles. Falling towards the Support. Let's move on... You think, the Up-Trend is over now. You now see some red candles in the chart. You think the trend has changed. You want to be the one how rides the huge Down-Trend. You hit SELL. OK... The market uses this Support and is Continuing the Up-Trend! Ouch :( So, in this idea you'll discover what those so called "Retests" are. Ask yourself: When does a Retest occur? If you think correctly, you might have a picture of a breakout in your head. This Breakout can be anything: Support and Resistance Trendline Fibonacci Levels Parallel Channel SMA 20, 50, 200 ... EMA or other trending indicators etc. think of anything After the Breakout the Retest can occur at any time. NOTE: A Retest does not occur on every Breakout! The market occasionally breaks out without a Retest. Here we listed some "sorts" of the Retest: The "classic" Retest This is the kind of Retest which you can find in every trading book. Let's get an example: The market just broke out from major Resistance. Since there is price action in the movement, the price even moves a few pips further. It suddenly stopped, made a 180° U-turn and it makes a Pullback. It tested the previous Resistance (now it is a Support) and continues higher. What you can use to predict the Retest is over: - use the 20MA In a strong Trend the 20MA is often the key level many traders are watching. So if you notice that the market and the 20MA are far away from each other, than wait for a Retest. If both are touching each other, the market often continues higher. - use false breakouts If you notice that the Support gets broken and fastly comes back, this is a sign that bullish power exists. Buy the False Break. - use other indicators It is also possible to trade it with Bollinger Bands or Parabolic SAR... The long Retest As you can see in the third example of the chart, the market broke out and immediatly retests the trendline. Then it moved very long on the other side of the trendline and finally moves further. If you zoom in, you can notice a little Trendline which gets broken. This could serve as an Entry Trigger. Watch out for other sorts These Retests can - as every pattern in trading - come up in every kind. You have to watch it yourself! In the chart of USDCAD we highlighted three (potentially four) Examples of the Retest. We hope that we helped you with this idea. Please like, follow and comment! Thanks and successful Trading :)!
Education
by swissmoneymakers
3
3 Simple Tricks to Recover from a Drawdown like a Pro3 Simple Tricks to Recover from a Drawdown like a Pro. In our private client area, we often talk about the importance of understanding drawdowns. The first step in dealing with drawdowns is to acquire the right mindset that is conducive to trading. Do you want to learn how to live through the daily drawdown that is almost inevitable and all traders must go through? Statistics have shown that the majority of your life trading career will be spent in drawdowns. If you spend so much time in a drawdown, it’s important to learn how to recover from drawdowns. With that said, here are 3 trading tips you should use to help you recover from drawdowns: #1 Know the Maximum Drawdown of Your Trading Strategy Through effective backtesting methods, you can actually discover the maximum DD of your trading strategy. This will mentally prepare you for them. If a trader learns how to develop an awareness of what will happen to his account during a drawdown period, you’ll have the mental capacity to cope with the drawdown and stick with your trading strategy through these tough times. That’s assuming you have a profitable strategy. If you can’t learn to master this discipline, then you’re better off to stick to algorithmic trading and let the robot do the job for you. Automation will often eliminate counterproductive emotional decisions. #2 Cut Back Your Position Size Another thing you can do to cope with the painful reality of drawdowns is to risk per trade or the position size. Contrary to the popular belief that teaches you to increase your risk, so you can accelerate the recovery process, that type of behavior is very destructive for your account balance. Aggressive pyramiding to escape a drawdown is even worse. Take for example, how legendary trader Richard Denis thought the Turtles to handle drawdowns. When drawdowns occurred, they would reduce the trading size from 2% down to 1.6%. They would continue to cut back their position size if the DD was extending. This preventive action is for self-preservation of your capital. Learn it, and use it in your favor. #3 Increase your Risk-Reward Ratio A positive and big risk to reward ratio is part of every successful trading system. To escape a drawdown faster you need to learn how to increase your risk and reward ratio. One of the most effective methods to improve your RR ratio is to perfect your entry strategy. By having a better market timing you can keep your stop-loss very tight, thus further limiting your losses. With a RR ratio of 1:3, you can escape a drawdown period pretty fast even if your win rate is still somehow very low. If you can make a pact with yourself and not flinch in the face of adversity when your risk tolerance is reached your daily mental battle is half won. Final Words – Drawdown in Forex Trading In summary, drawdown forex is the most important risk metric because DD can make you switch your trading strategy if you have too many consecutive losses or if our losses last for too long. Forex drawdown can literally kill your account if you don’t know how to recover from a drawdown trading period. The only way you’ll never experience a drawdown is if you stop trading. You need to accept the reality that the drawdown in forex trading is inevitable There is no such thing as risk-free returns. You need to work smart not only to make profits but to also keep those profits. With that said, you only need to keep in mind these three drawdown trading rules, if you want to manage DD like a pro: Know your historical max DD Cut back your trading size Increase your RR ratio Thank you for reading!
Education
by Tradingstrategyguides
1
Projecting Shallow Pullbacks During BTC Bull MarketLooking at the 2017 bull market start the first couple impulses only pulled back to the 1.5 extension, it wasn't until price had actually doubled that it finally pulled back to the usual 1x extension of the 3 wave during the impulse. The lession is that when it looks like BTC is shifting gears from bear to bull market to be aggressive on the first wave of impulses and waiting for it to act like the usual impulse you get during a sideways market means you'll end up having to chase price several impulses later.
BITSTAMP:BTCUSDEducation
by mljones
Entry Opportunity for Boilermerch (0168.kl)Observation: a) Market Stages: - Stock is currently in the beginning of Stage 2 (Mark-Up). b) Trend Line: - Price traded sideways nearly 4 weeks before moving up, turning Resistance into Support. c) Price & Volume: - Price spread is small with very low volume during its sideway move. - High vol. came when it broke the Resistance, currently turning it into support. Based on observation, currently price is making a pullback with low volume. Every trade is 50-50 since no one can predict market movement. If entry is made, my trading plan would be as follows: Entry Price: 63.5 sen Stop Loss: 59.5 sen Profit Target: 67.0 sen
MYX:BMGREENEducation
by mdalifalwi
Algorithm Builder - INDICES - SPX500 - Review Oct 18th, 2019Hello traders I. Daily tutorial publishing challenge officially begins Starting today, I'll be publishing every night what were the setups given by the Algorithm Builder Indices . ---------------------------------------------------------------------------------------------------- You'll find more information about that script in this script signature. ---------------------------------------------------------------------------------------------------- II. Wisdom of the day Last Friday was the Triple witching hour day. That is the day where the US contracts come to expiration on the US market - this event happens once a month. Hopefully, only once a month, because this day is often particularly hard for traders to trade. Those days are the expiration of three kinds of securities: 1. Stock market index futures; 2. Stock market index options; 3. Stock options. The simultaneous expirations generally increases the trading volume of options, futures and the underlying stocks, and occasionally increases volatility of prices of related securities. III. Why a 1-minute chart? The indicator won't give more than 3/5 trades per day even. This is not a scalping trading method, it's intraday and based on smoothed indicators for entering in a strong trend only. Those are the most secure trades possible because: - the Algo Builder waits for a strong confirmation and will avoid the fakeouts - the 1 minute allows to enter very early. This point is crucial. We made it so that to enter early but with a minimum of security. IV. SPX500 - Signals of the day 2.1 Morning trade 1. 8:45 am We had a difficult move to take because in front of multi-timeframes resistances. and US stocks opening 45 min later. What I usually do, is to wait for a pullback near the EMA 20 which has a few huge benefits: - generally gets me a better entry price (lower for a long, higher for a short) - reduce the distance between my entry price and stop-loss - hence reducing the risk of the trade The Algorithm Builder - INDICES calculates the stop-loss internally, based on the price where the signal appears 2. 10:12 am and 11:45 am The IDEAL scenario for the Algorithm Builder. Leading trend is red, short signal, no supports near, a great setup with a decent risk-to-reward ratio. When we're in the same direction as the leading trend and the next algorithmic SMAs are a bit far, those are the moments where I know that my reward is far greater than my risk. Would I overleverage or increase my position size drastically anyway knowing this is the Triple witching hour day? Maybe not :) The three morning trades gave about 270 pips 2.2 Afternoon trades 1. 1:05 pm We now see a BUY against the leading trend in red. Which means, the trend is not too strong to go crazy yet. The method tells to wait for a pullback near the EMA 20 to enter with more security 2. 3 pm In the same direction as the leading trend but in front of MTF resistances. Even waiting for a pullback allowed to grab the last 30 pips of the day To quote Ice Cube - it was a good day :) All the best, Dave
FX:SPX500Education
by Daveatt
The secret of pull back tradeOne of the most common asked questions. When price is creating higher high or when the resistance level is broken, what can I do? when and where should I enter? The answer is very simple Breakout (structure broken) > WAIT for pull back (to structure level) > BUY As we can see from the chart on the left, when there's a breakout (structure broken / new high is created), do not chase or enter immediately. The secret of pull back trade is to WAIT for it to pull back. Be patient, patient is the key to success. The rationale behind is before the breakout happen, the yellow structure is a resistance level. But when it's broken and new high is created, the resistance level will become support level. That is why we want to buy low (Support level) and sell high (Resistance level) Good luck and happy trading!
Education
by rckh
Pullbacks in Tradingin trading you will see this patterns over and over again this is how the market works. Don’t let pullbacks scare you a pullback needs to happen in order for price to continue its movement. If you see below on the chart if you have bought all the way down you could have got all that move up without being scared of pullbacks because you know and you are confident in your trading think like that and you will go far in the market. This is a a very effective way of understanding where the market is going. Only way a pullback can really damage this chart is if it breaks your buy position which it would have been all the way down from the first pullback. Good luck in your trading.
Education
by AlexisMixail