day trading pullback strategy

20-day SMA trading above the 150-day SMA. Trading pull backs can also assist in creating high risk to reward plays, especially if we are entering from a long-term key level and using the 4 hour or 1 hour chart to pin-point an entry. Now, there are many times when the market trend is not super clear or obvious, and during such times we can still use pull backs or retracements to our advantage. The second part of this trading strategy uses the Stochastic Oscillator to identify correction. Its not uncommon to pick up trades that exceed a risk reward of 5 to 1 and sometimes far more. You will also find loads of swing trading information in the guide mentioned above. We need to remember however, that markets do not move in straight lines. I personally employ the idea of set and forget and this has forced self-discipline and routine into my trading approach by only trading at pre-determined levels and scenarios.

day trading pullback strategy

Between the previous days close price and the current days high price. The thing traders forget about is the element of time. Todays lesson will show you why market pull backs or retracements are SO powerful and why you need to start focusing on them asap. One way to look for pull backs is to watch for 50 retracements of moves. I keep doing this as often as I have.

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