Buying Pullbacks & Selling Retracements are easy if you have these rules

Buying Pullbacks & Selling Retracements.

Our Wave Pattern is nothing more than buying pullbacks and selling retracements.

Remember, there are many ways to take the WRONG pullback, and we use very specific entry rules to know which ones to take, and which ones to avoid.

When taken correctly, the wave pattern uses 3 levels of support to protect your long trade, and/or 3 levels of resistance to protect your short trade.

When you see a sloppy and high-speed retracement/pullback it is the sign of a failure.

Always watching momentum, looking for clues at the time when you are supposed to be entering the trade.

Don’t take the retracement/pullback with retracement more than the 61.8, that is screaming at us for a failure.

Where do we take these pullbacks and retracements?

These patterns are trend-continuation which means we are trading with a current short term trend.

If there is NO TREND there is no way.

We do not want to sell into the lows (support) or buy into the highs (resistance)

Remember this...buy at support...sell at resistance.

Avoid these patterns in the middle of ranges, and look to take these patterns at the extremes (highs and the lows of the trading ranges)

Basic trade management on the Wave is to put your stop at the recent swing high/low and your target at the previous swing high/low.

Make sure you pay close attention to your Risk-Reward Ratio.

Wave pattern is the most efficient way of trading:

-        Buying at support & Selling at Resistance

-        Wave long buys with price falling (more liquidity)

-        Multiple levels of support to protect your long trade, and resistance to protect your short trade

-        You are also trading with the short term trend

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Dynamic Support & Resistance:

-        Trigger lines are the most common

-        We use DYNAMIC support and resistance for entries, stops, and targets

-        This means they are always changing

-        Dynamic = always changing.

-        Keep a close eye on the changing support/resistance levels when you are trailing your stop, placing your targets, or looking for entries.

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Dollar Index Correlation:

-        Low Volume

-        Fear Globally

Crude Oil is a positive Dollar Correlation because of FEAR of lack of demand.

Dollar drops, so does demand on crude, and crude drops.

Gold has a TON of fear which means people are taking profit filled with fear and greed at the highs, even as the dollar keeps falling.

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Improve your tape reading skills with this video on the blog.

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What is overbought or oversold momentum so accurate?

-        Because we use it at the RIGHT LOCATIONS.

-        When you look for the buy, you want oversold

-        When you look for the sell you want overbought

-        ASSUME:  you are buying at support and selling at resistance.

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Big Money Trigger Line (BMT)

-        Very strong level that MAJOR money managers use as their key support and resistance

-        It makes an excellent profit target (price magnet)

-        But you do NOT want to trade around it (sloppy)

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