Wednesday, May 11, 2011

The first pullback

The first pullback after a trend move (1PB) is usually the best swing trade of the day. A trend move could be a large gap, a large trend bar or a channel move. The stronger the trend, the better the 1PB entry. This move is especially strong if it forms a 5tf off the first entry (1PB signal bar b5 hi was 5tf from b2). A second form of 1PB is the first 2 legged pullback (b24). When the 2 legged pullback is to the ema, its no different from an A2, but the first such entry is likely to give you the best swing move of the day. A 2 or 3 legged attempt to close the gap counts as both a 1Rev and 1PB and is usually a high probability trade.

The second attempt to pullback (b9) is sometimes a 1Rev trade and therefore, it may be advisable to exit some or all of your position on the first push down and re-enter on the first 2L pb (b24).

For new traders, 1PB is usually the best setup to take, if they are willing to not trade on days that do not present a clear 1PB. 

1 comment:

  1. Cadaver, this is one of my key stock strategies for 1st hour (when mostly I trade), one that I had to have to trade the hard predominant no gap situations. THANK YOU. After learning about the “ideal” first bar from you (010411 and other posts) and researching it (historical SIM), I then concentrated on finding and documenting 40 trades specifically of no gap, 1PB after a trend move that consisted of a
    larger-than-ideal first bar with small tails (like this day). I seek your input, if you will: I wonder why my results were so good in the face of expecting the large bar to act as a range.