BULL and BEAR pullback trades and risk management

15 Mar

Here are rules for long and short trades via Bull and Bear PullBack and trade management for it.

15 Mar

Not

Definition of PullBack trade:
A Pullback is when a price action within the context of an uptrend or downtrend traces an orderly price decline/incline aka correction from the peak of an up leg or of a leg down.

Background:
The power of an upside or downside move after a retracement can be greater after a strong and steady uptrend or downtrend especially when the retracement is on a smaller volume with the smaller candle.

Practical Use:
Technical analysts will often use the Pullback pattern to begin looking for long or short positions as the asset reaches support or resistance areas.

15 Mar

Not

RISK MANAGEMENT RULES

STEPS FOR ENTRY IN BULL PULLBACK

1. Set Entry Price
- Above the closed candle’s high.
- 1/8 of that candle’s trading range (we calculate trading range H of the price
minus L of the price to represent a trading range of assessment for a specific
period/time).

2. Use a Stop/Limit Order
- Stop (trigger) = H of the day plus 1/8 of trading range.
- Limit = +5-10 cents more Stop price (20 cents more if the price is above 300 $)

3. Attach Initial Stop-Loss
- Below the candle’s low by ¼ of the “trading range”
- Manage stop loss based on the last candle or moving avg. or S/R lines.

15 Mar

Not

RISK MANAGEMENT RULES

STEPS FOR ENTRY IN BEAR PULLBACK

1. Set Entry Price
- Below the closed candle’s low.
- 1/8 of that candle’s trading range (we calculate trading range H of the price
minus L of the price to represent a trading range of assessment for a specific
period/time).

2. Use a Stop/Limit Order
- Stop (trigger) = L of the day minus 1/8 of trading range.
- Limit = +5-10 cents more Stop price (20 cents more if the price is above 300 $)

3. Attach Initial Stop-Loss
- Above the candle’s high by ¼ of the “trading range”
- Manage stop loss based on the last candle or moving avg. or S/R lines.