Master The PULLBACK TRADE (3 Strategies That Make BANK In Forex!...) and in stocks

this is an alert I sent out to all of our students telling them I was going long on the dollar canada this is an email from one of our students brian who baked in almost a thousand pips on this trade setup and this is the dollar canada right now i don't say any of this to boast yes this was a great trade but just like any other professional trader i have winning trades and I have losing trades I want to show you this instead to prove to you how powerful what I'm going to show you in this video really is what I'm going to show you in this video can be a saving grace to your training it can mean the difference between profits and frustrating losses it is a time-tested technique that will continue to provide profits for years to come if used correctly you saw what it just did only dollar canada and that's why in today's video I want to teach you how to master the pullback trade let's go [Music] so first off I'm gonna do a quick overview of exactly what you're gonna learn throughout this entire video first we're gonna talk about what a pullback is and what are the types of pull backs you need to understand there are actually three different types of pull backs we're gonna discuss today that you must understand in order to master the pullback trade next we're gonna go over what each of these three types actually mean in terms of what the markets likely to do after they occur and once you understand these pull backs and what's likely to happen after they occur I'm gonna go through a full breakdown of the dollar Canada trade and see if you can spot what type of pullback we used in order to take advantage of that opportunity and throughout that process I'm gonna show you how you can use what you've learned in this video and what you're gonna learn in this video to spot big opportunities in the market just like that dollar canada trade once we're through reviewing the dollar canada trade i'm going to teach you exactly how to trade each of these different pullback setups and in the end of the video i'm gonna give you a fourth pullback bonus that you really need to look out for in a trending market so stick around to the end of the video for that and right now right before we get started with the actual content go ahead and click that subscribe button if you're interested in learning more about Forex click that like button for me to help with the YouTube algorithm and follow us over on Instagram where we post each and every week so now let's dive into today's content so to start off with what is a pull back a pull back is a period of exhaustion in a trending market if you see a market that is trending the pull back would be the area where the market starts to fall back down after having a big trending move the reason for these pull backs a lot of times is because of the fact that traders that were in down here have decided this is a level they want to take profit they're not sure if the value of this specific currency pair is actually going to head higher so they go ahead and take their profit off a lot of times this is caused by structure levels looking left or different types of economical events I personally don't trade fundamentals so that has nothing to do with what I'm looking at but what you need to understand is that a pullback is as a period of exhaustion in a trending market so as you can see looking at this trending market we have pull backs that come in all different shapes and sizes so let's now go into the different types of pull backs to do that I'm going to go up to a blank chart and show you what we have here what we have in an innie trending market is going to be three different types of pull backs the different types of pull backs are one is going to be a small pullback two is going to be a medium pullback and three is going to be a deep retracement now with a small pullback this is normally a sign of a very strong trend a very strong trend is going to have very small pull backs very small periods of exhaustion before the next impulsive move and if we have a medium-size pullback and in terms of what we look for in a strong trending move for the pullback this pullback normally does not make it to the previous resistance level that's how I define a small pull back a small pullback is one that doesn't make it back down to the previous resistance level and for a medium pullback which would be this one right here a medium pullback is going to be somewhere between a 50% retracement and around a 70% retracement and normally comes right into the previous level of resistance that was broken in an uptrend so that would be a medium pullback now a deep retracement is going to be a pullback that is between 80% of the swing low to swing high and actually touching between 80 and a hundred percent meaning it's touching the previous level of support and Wow this in fact is a sign of weakness in a trending market it can also make for some great opportunities in terms of risk reward which is something we're gonna discuss as well for these deeper tradesmen to think of this and the way I think of this is it's a last stand level it's somewhere that buyers have their last opportunity to cause this market to continue because if this level fails more often than not the trend ends up reversing so this is our last chance level what I like to do in these areas is give myself a really good risk reward ratio but that's something we're going to discuss a little later in the video at this point you know what the different types of pull backs are and you've seen what they look like when we're drawing lines what I'm gonna do now is show you the different types of pull backs actually on a chart in live data then we're gonna go over to the dollar candidates rate I'm gonna get you to tell me if you can spot what type of pullback we used in order to get involved in that opportunity and then break down that entire trade so you can understand how to spot opportunities just like the dollar canada trade in your own trading as well so let's go ahead and delete these drawings and head down to a chart so here on the dollar canada chart we actually have a push up here followed by a retracement and the next push up now we're in a trend what type of pullback is this right here well we don't quite come down to the previous resistance level so in this case for this specific pullback this would be considered a small pullback for me meaning we're in a very strong trend that's likely to hit higher if we break above our previous resistance level so with that being the case you can see these small pull backs and understand that it means we're likely to head higher if we're in an uptrend same thing if we're in a downtrend but in the opposite direction now what is this pullback considered we have our next impulsive move that breaks and closes above our previous resistance level and this pullback is about 50% of this impulsive move and comes down into our previous resistance level so with that being the case what would this be considered well I personally would consider this a medium pullback medium pull backs are a sign of a strong trend remember meaning that these medium pull backs if they had higher are also likely to continue the trend so we have a medium pullback now let's find a deep retracement as well and right now guys I understand that these are just facts and you're just learning about pullback trades right now and pullbacks in general but I promise I'm going to show you actually how to use this in your trading gonna give you some practical application for this in just a second a little later on the video but right here let's talk about this deeper tradesmen what we have is a trending market here on the dollar Canada this right here would be our medium pullback followed by an impulsive move up a small pull that followed by another trending move and then what do we have right here is this between 80 and 100 percent this pullback right here is what I'm talking about this pullback actually comes down into the previous support level meaning that it is a deep retracement all these deeper trace mints what I really enjoy doing is giving myself a really high risk to reward ratio on these specific trades now again this is a sign of a weakening trend but as this level is the last stand level if it holds if we have buying pressure in this level holds a lot of times buyers are sellers excuse me sellers at this level will give up when they give up the buying pressure can take over and push the market much much higher so that's what we actually use in the dollar candidates rate and that's what I'm going to do right now now that you have an understanding and you see what each of these pull backs look like let's head over to the dollar canada see if you can spot the actual pullback that we used in order to take advantage of that trade let's do that right now and here we are on that dollar Canada trade and I kind of gave this away on the deeper trace meant lesson that we just talked about because right here is actually the same place so I'm sure at this point you can tell that this was based on a deep retracement pullback trade now again I'm gonna go over this we have our one two three move putting us into trend we have our pullback small pullback followed by a nice impulsive move and a pullback back into the previous support level again same thing we just discussed if this previous support level holds it's our last stand level and if sellers can't make it through that last stand level more often than not they give up and if they're going to give up that leaves a lot of room for buying pressure to push the market higher which is what we took advantage of here on the dollar Canada now I know that this trade would not have been nearly as big of a winner if we hadn't had some type of big news catalyst in this case being the coronavirus but this is still the same type of setup we look for even if there's no news events coming out and no catalyst it still tends to provide an edge over the market so in this case we were way the dollar Canada to give us a trending market give us a deep retracement and on this deeper trace Minh it's very important that I see buying pressure buying pressure came in from this swing low candle having a long wick to the bottom side then we get a retest of that level in the market holds that's enough signal for me to see a deeper trace Minh understand I'm getting a nice risk to reward ratio out of it which is important we're gonna discuss that in just a second and use that level the previous level the last stand level as a place to put my stops under while getting a nice wrist or reward initially looking at a reward maybe up here at the previous highs is what I would normally do so with that being the case you give yourself a nice risk to reward opportunity and here on the dollar Canada that's what ended up happening and we ended up taking the second part of that trade the second part of that position up much much higher and as you saw from the email earlier Bryan ended up taking this trade to whole new levels it was one of the best trades he said he has ever had and in just a second I'm gonna talk you through how to trade deep retracements like what we just saw on the dollar Canada I'm gonna talk you through how to trade medium retracements and how I strayed those smaller retracements as well the systemic approach I approach each of those with but before I do that if you would like to learn the exact rules based strategy that Bryan used in order to capture that dollar canada trade and that I use in my personal trading every single day and also get three to five email alerts from me and be personally mentored by me through your trading journey then we've just opened up enrollment into the EAP training program and in that program you'll have a full training course that will teach you all about the strategies and techniques that I use and also those three to five email alerts each and every week of treitz I'm placing right now we've just reopened enrollment and there's a two hundred dollar discount on that program at the moment so if you're interested in some more advanced training in the forex market that link is in the top of the description this is not a sales pitch I'm just trying to make you aware that it's there if you're interested in some more advanced training if not what we're gonna do right now is dive into how to actually trade each one of these pull backs so let's go ahead and go into that right now alright so first up let's go over the small pullback and how I actually like to trade this type of pullback so for a small pullback remember we discussed that a strong a strong trending market will have pull backs but they will be smaller so let's say we have a strong trending market which is important to remember throughout this lesson this part of the lesson so remember strong trends volatile markets we have our small pullback this is the way I like to trade a situation like this we don't know whether this pullback is gonna be small or big until we break above this previous resistance level right here so for that reason I trade breakouts when small pull backs occur let me explain that I need a large impulsive move we're gonna go down to charts I'm gonna explain how to spot these big moves so don't worry after I see a really big move in the market again I like trading breakouts after these little retracements so this little retracement may occur let's say we have this big pullback here's our previous level of support or resistance and this pullback doesn't make it there so therefore it's qualified as they are validated as a small pullback at that point I'm gonna put a buy stop order and I'll go over that order to help with anyone who doesn't know what it is a buy stop order above that resistance level because in situations where the market is very volatile and trending with huge moves then after these small pull backs if we get a break above this resistance level the market tends to head much much higher because it's moving so volatile now in this case you have a few different options for stops and targets and we're gonna go down on a chart and actually discuss this as well to give you a clearer picture but right now I'm gonna do it right here with the drawing tool so we have our buy stop order right here let's say and one of the options for a stop loss that I personally use these this is exactly how I personally look at these situations in terms of pull backs whenever I see this happen and I place my order I may decide to put a stop loss below the swing low before that breakout in that case and listen listen closely you need to understand that in this case with my stop-loss below that swing low I look for a smaller risk to reward so in this case my risk to reward may be something like a one point two to one which would be closer to like up here so it may be like a one point two to one risk reward in the case where I put my stop-loss below the swing low the second option is putting a stop loss below the entry candle those are the two different ways I like to play stop losses and the reason I do the entry candle is because these breakouts are meant to push the market super high right super high super quickly so if the market is going to go down at all I don't want any part of it I was wrong get me out of the trade for my small loss but if the market continues up that stop-loss below the entry candle gives me an opportunity for a bigger risk to reward ratio let's look at what that looks like on an actual chart right now so let's go down to some charts and I'll take you through one of these opportunities okay so I want to see if you can spot the small pullback trades that we just discussed here on the chart give it a shot I'll give you a few seconds have you found any yet there's actually two that I want to point out and show you here on this chart the first one is right here this is classified as a small pullback and the reason is because we have our move up that breaks and closes above our previous resistance level right after that move up what we're looking for as we discussed earlier for a medium pullback we needed to get about 50% of the way a 50% of the total move so easy way to do that is with a Fibonacci retracement from our swing low up to our swing high did this retracement hit a 50% retracement it did not so with that being the case something you may decide to do is place your entry above our previous swing high again with the stop-loss we want to go below our depends on what type of stop off so you're going to use let's just say we did it below the swing low here and when I say swing though it's this one because after our break and close above this was our swing low before our breakout which is what we're looking for for stop losses so there's our stop and in this case I don't even have to put a target on the screen but as you can see this would have hit much more than a one at one point two to one risk reward which is the preferred targets that I have so another situation here that could have came out of this is you could have put stop losses below your entry candle which may have looked something like let's say what the ATR is 33 pips 33 pips below the entry candle would have put us about right here and in this case you have a much smaller stop-loss and your targets could be at the same place and you would still end up with a much bigger risk to reward ratio for instance let's do this really quickly then we're gonna go over one more small pullback trade that I want to show you and then we will dive into the rest of the types of pull backs the medium and the deep retracements so let's say you do under your swing low here and we do a one point two to one risk reward okay with a one point two to one risk reward we can see that we hit targets if our stop loss was below the swing low before the breakout now if we do a stop-loss 180 our below our entry candle what we end up with is this stop-loss at our red line right here and what that does even if we keep the target at the same exact spot what that does is increases our risk reward from let's go back down from a one point two obviously that's what we were talking about to a two point two giving us a much better restored ratio which is why I vary in the way that I place stops on this particular type of trade now let's see if you can spot the next trading opportunity in terms of a small pullback if we have our impulsive move up and we do this pullback right here is this considered a small pullback in a trending market the answer is yes so small pullback because we don't even come down to our previous resistance and it's obviously not all the way down to a 50% retracement so with that being the case we have a small pullback we would have our entry above that small pullback we'd have a stoploss if you do the first way below our swing low here and we would have targets at a one point two to one risk reward let's do that stop-loss here targets at a one point two and we clip our targets but barely so really there's no way of knowing if this would have been a winning trade it may have been a losing trade which happens that's totally fine you're going to have losing trades at times so in this case right here it looks like we would have been clipped here but we may have been slipped on that position in any case this is a good setup for a small pullback trade so with this small pullback breakout trade would have ended up like this but if you would have chosen to take stops in the other take stops the second way which would be below our entry candle right here about 180 our thirty-two pips thirty-two pips would have been a little bit higher and you could have kept the same targets ended up with a one point three instead of one point two so that's always or more often than not gonna give you a better risk reward ratio when using that second way of doing stops now something important to note here about this small pullback breakout type strategy or type philosophy in trading is you only want to trade these during very volatile trends very volatile markets that are moving a lot with some type of catalysts preferred such as the coronavirus that is a catalyst that pushes mark markets around in a very volatile way because of that you have the opportunity to make extreme amounts of money using breakout patterns like the small pullback breakout now let me go back to the drawing board here and talk you through trading strategies in the actual entry techniques that I like to use for medium and deep retracement and actually I just noticed that this video is extremely long this video is nearly 20 minutes long already I hate doing videos on YouTube that are over 20 minutes long so for that reason what I'm gonna do is put a link in the description for another part of this video for those of you who are interested in learning and seeing the medium and the the medium and the deep retracement strategies that I like to use kind of like the same strategy that I used Dollar Canada for those of you who would like to see that there's also going to be a link in the description titled pullback mastery lesson it's got to be a completely free video just an extension of this one to keep the YouTube video from being super long so go to that link put your email address in and I will send you that video a link to that video so you can watch that and take advantage of not only the small pullback breakouts like this which will probably be a very good tactic to try during coronavirus during any volatile market and before you try it be sure to back test it I have plenty of videos on that I don't feel like going into it in this video because again it's already super long you have to back test it create a trading plan around it you can't go just blindly start trading this you're likely to lose money if you do so don't go blindly trade it test it on a certain currency pair and then decide whether or not you want to trade it but for now this type of trading strategy is going to work really well in a volatile market to see the medium and deep retracements the link is in the description if you want those strategies entry techniques and stop and target preferences that I have if you enjoyed the video click the like button don't forget that if you want some really advanced training and to be personally mentored by me during your trading career the EAP training program is linked in the description as well stay safe during these volatile markets keep your risk management in check hope you are able to trade green and capture some of these huge moves I wish you the best of luck in all your future trades and I can't wait to talk to you in the next video or in the video in the description see you over there talk soon

Channel: The Trading Channel

Views: 571,024

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Id: wG7V0l3_yZg

Length: 22min 27sec (1347 seconds)

Published: Fri Mar 20 2020