It’s so hard to buy pullbacks!
That’s what a fledgling trader told me there other day after I asked him why she doesn’t trade trends.
I can understand her dilemma. I mean, how many times have you bought on the pullback only to see the stock pullback further. You then get stopped out before the stock eventually does exactly what you thought it would.
Talk about frustrating!
Well, that’s why we don’t guess by trying to time the pullback. Instead, we let the pullback play out before entering.
How do we do that?
By waiting for the remount of a key range, like the 9 (ema) and 50 day moving averages.
This gives us confirmation that the pullback is over and puts a repeatable process in place that gives us easy steps to buy the pullback without fear.