Thursday, 11 March 2021

When to Buy a Pullback? What Type of Pullbacks Work Best in 2021?

Let's get straight to answers!

The best time to buy on a Pullback is right at the beginning of a New Wave. 

The ideal time is where a new trend,  or a new wave 3 or a new wave 5 begins. 

How to Buy on a Pullback within a New Wave 3?

Before we answer the above question. 

We must first understand What is a NEW Wave 3? The answer is, 

 The NEW wave 3 will ALWAYS, ALWAYS come out of either 

  1. A Range / a Sideways market 

  2. Trend Reversal 


How to Buy on a Pullback within Wave 5? 

Wait for a Setup 1 breakout. Wait for Fresh new peak on AO and then wait for a pullback.

This is The HUNT method. Simple 

What if I don’t understand or care about Elliott Wave? 

Let’s assume you don’t care about eWave or don’t understand it. Then what? 

No problem. This basically means that you want to look for: 

  1. A Range-Bound / Sideways / No Trend Market and then 

  2. Wait for a Breakout and after you see a breakout 

  3. Wait for a Pullback 

Trading Pullback within the Setup is Simple 

All I have to do is wait for Setup 1 and Trade it. If I want to add on, I will then apply the HUNT Pullback. 

If it's a NEW 3 out of a Sideways Market then Hunt Pullback

Simple simple simple …

Create a universe of 300-500 stocks. Keep them on the list. Watch for their trends. 

I want to see a pullback near the fresh cross... Yes, the first and the 2nd pullback.

That's it. not 5th 4th of 7th pullback. That’s it. 

How to time it perfectly on the LOBOT template with 10/20 EMA only?

That’s simple too. 

You want to make sure its either a trend breakout (volatility breakout as above) or a reversal.

You want to time your entries on the first and 2nd pullback after the cross of the 10/20 EMA


Example 1: NBR

Example 2: MESA - Cracking Setup (Setup 1 Template)

What’s the Best Pullback Pattern?

There are two types of pullbacks 

  1. Clean 3-5 candle pullback back to 10 ema or the KC Upper Band

  2. 2-3 candle, then a fakeout, but then another 2-3 candle pullback. (creating a b trap and Pc)

The Simple Pullbacks (No Fakeouts) 

Example 1.1 KC 

Example 1.2 Lobot Template (10/20 Ema)

Example 2.1 - OII

Example 2.2 - MIK 2 Candle Pullback

Example 2.3 - Not a correct pattern

Example 3.  Some good and Bad Ones and How KC Eliminates some trades

The Complex Pullback 

Example 1 

It was hard to find just one example on the weekly daily charts. Such is the state of the markets these last 12 months. 

But it is quite common for lower time frames.

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When is it too late or too early to buy a pullback? 

In order to answer this question first ….  Let’s quickly do some repetition. Let’s quickly do some repetition.  Let’s throw in some trading ...