MASTERCLASS: Pullback Trading Strategies (The ONLY video on pullback you need to watch)

hey what's up guys this is Ezekiel Chu here so let me ask you how many times have you jumped into a trade only to see the price pull back shake you out before rocketing to your original direction it's frustrating right and the problem most traders they don't understand how to time their entries during a pullback they either they enter too early or and then they get stop out or they wait too long and then they miss the move completely so today I'm going to change that right i'm going to show you how to trade pullbacks

the right way so that you can catch the high probability setups you can enter at the perfect moment and stop like secondg guessing yourself right so this is a master class on pullbacks and this is the only video on pullback that you need to watch [Music] [Applause] [Music] okay first off what is a pullback right a pullback is a temporary dip in price inside an existing trend so it's a pause before the market continues in the same direction why is it important i mean let me give you an example right when the market is in

an uptrend you might consider entering a buy position here but waiting before jumping in is better why because the market never moves in a straight line right it moves what in waves right forming what higher highs and higher lows with all these occasional pullbacks so if you enter for a buy right here right what happens there's a very high chance that a pullback or a trend reversal may happen so a better a safer approach is to wait for price to retrace before entering your buy position so aligning your entry with the natural flow of the

trend is the key okay next question how can you tell if the pullback will stop here or keep dropping further right i mean I got you so through research and obviously through my experiences right [Music] there are three key levels where pullbacks they often come to a stop first one support and resistance level all right so if the price pulls back to a previous support resistance right which turned to support or vice versa whatever it is right it's just called support and resistance level right chances are that the buyers or sellers they will step in

so for example the first level is your basic support and resistance right so looking to the left you will notice what the price has rejected this level multiple times right this tells us what hey we can draw the resistance line here you see the price broke through the resistance and then what it made a pullback so see where it ends right right at the resistance level which has now turned into support from here price went up again now once again what happens it finds support at the previous resistance level when the price pull back so

this shows us what this shows us that pullbacks they often end at these key levels [Music] okay second one trend lines the second level to look for is trend lines you can draw a trend line that connects the swing highs for example in a downtrend or the swing lows in an uptrend so if price cools back right and it touches the trend line what you got to do right you watch for the bounce right so in this example we can draw a trend line that connects all the what the lower highs in this downtrend right

and you will see that price it consistently rejects the trend line during the pullbacks so each time it pulls back to the trend line the price reverses and goes lower so this what this helps us to confirm where the pullback ends all right before we continue I want you to check out FP Markets so with over 20 years in the industry FP Markets is a globally regulated broker and that is the key they offer like really fast execution and more importantly they have segregated client funds so you can trade over 70 over currency pairs 10,000

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average the 50 moving average and the 200 moving average if price pulls back to the moving average and it holds there this is a potential entry point right this is a what a 50 period moving average because what price tends to react to it when price pulls back to a moving average what it often finds support and then continues higher okay but here's where it gets interesting sometimes it doesn't just touch one level the the lines it can line up with multiple key zones for example a trend line with say a previous support resistance turn

support area or for example another moving average so when that happens it's not random okay this is a high probability setup a really strong support right more buyers are stepping in and a higher chance of what price bouncing in your favor for instance right here price pulls back to the moving average but if you look to the left you will notice what there is a resistance area now acting as support so this is what we call what confluence or area of confluence right so where multiple key levels they all align together support and resistance level

trend lines moving averages right so when the price it lands there is random anymore this where the market makes the decision right the buyers they step in so for example what some people they understand trend lines some people they understand support resistance level some people they understand moving averages so these are the moves that moves the market [Music] okay when you're trading pullbacks the first rule of the thumb is what you got to stick with the trend so if you're going to fight against the trend it's like you you trying to swim against the current

you're going to get exhausted and then wipe up like fast so instead what go with the flow if the current is coming here you go with the current right go with the current step one identify the trend on your time frame okay if you're trading the daily time frame right then make sure that the daily trend is strong if you're trading on the 1 hour time frame then look at the 1 hour time frame trend right so don't get distracted by the other time frame is the bigger picture a trending market they moves in waves

and what is your job your job is to catch the wave at the right moment wait for the pullback enter it with momentum and that's where you can ride it like a pro if you're trading the one hour chart is your better view right so before you take a trade you ask yourself okay is there a clear trend if the price is chopping sideways forget about trading pullbacks no trend equals what no momentum equals what no trade so now what if the 1 hour chart shows a strong uptrend or downtrend right so what now you're

in business so that's when the pullbacks will become your best weapon right letting you enter at all these prime levels so now for example if the market isn't trending when you trade pullback is a trap don't trade pullback when the market is not trending right you cannot write the momentum if there's no direction so in a choppy segways market backs what it becomes what fake outs all right uh so-called stop-loss hunting all right frustration no no don't do that all right what can we do patient right wait for a clear trend before you jump in

that's the thing not all trends are equal if you do not know what type of trend you're trading into you know in a way you're flying blind we're going to classify the trend into three trends all right strong trend healthy trend weak trend first one let's talk about the strong trend strong trend is what is when the price it follows and it like hugging the 20 moving average so what this is where the market it moves fast is barely pulling back the 20 moving average is what is the is the average of the last 20

bars okay so it's a very it's a it's a moving average that sticks pretty closely to the to the price right because it's only the average of the last 20 bars not a lot more just the last 20 bars so this is where the price respects the 20 period moving average right so how to trade it right when when you spot this kind of strong trend right you buying on a shallow dip to the 20 period moving average or on breakout pullbacks right when it break out from the pullback right because it's so shallow right

okay now number two healthy trend healthy trend is when the price respect the 50 period moving average so the the healthy trend is like a more controlled uptrend right So price it what it takes deeper pullbacks compared to 20 period moving average but it holds above the 50 period moving average all right so now how do we trade it you enter on pullbacks to the 50 period moving average right or the previous resistance turn support level now the third one the wick trend the wick trend is where price barely hangs on so so so it

can fall quite a bit right this is where price holds back to the 200 moving average so this trend is losing momentum but uh is still intact right so there are deeper retracement like deep deep retracements so price struggle to make new high all right so how to trade it hey you got to be cautious here right you only buy at strong support areas all right like the confluence that we have all right or after a clear reversal signal all right for example with price action itself plus confluence plus plus volume for example why does

all this matter right the strength of the trend it tells you where the area of value is in a strong trend you are buying all the shallow dips in a healthy trend you are you are waiting for the bigger pullbacks right in a weak trend you either you get in at the extreme low or you stay out so most traders are they they get wrecked because they they they keep using the same pullback strategy on every trend you get what I mean so this is where you are now trading with precision because you understand the

trend that you are in pro tip stop focusing or fixating on a single price level so the markets are not perfect so they will fake you out before making a real move right so instead you got to think of it in zones right the market moves in zones it's a flexible area where price lily reacts at the area all right most traders they over complicate this part right they they what they enter too early they exit too late right or or they they panic at the worst possible moment right but here's the deal entries and

exits it should be simple your entry trigger it's like what it's like a green light right your once your conditions are met the price is in the right zone you need a clear signal to jump in what what are all these clear signal it could be a bullish engulfing candle it could be a trend line rejection with strong volume it could be a pullback to the 20 period moving average with a pin bar confirmation right if there are no confirmation no trade it's as simple as that what exit when you are wrong right you got

to cut it fast you move on right so losing trades it happen it's part of the game right a smart trader you exit early and protect your capital instead of keep on riding into the bad in a bad trade that that that is like heading into destruction right so here's how you know when it's time to cut the trade so first off your key level is broken right so for example if price closes below the 20 period moving average in an uptrend the momentum is shifting already or your trade idea is now invalid so if

price doesn't respect your entry zone so why stay in right now you're hoping you're not trading it you're hoping please go up please go up please go up no no all right so now what is the mindset shift so stop thinking about being right focus on staying in the game for the long run right so here's what I mean okay in a healthy trend the support should hold right so if price breaks below it that is not a pullback it's a warning sign the market is shifting direction your trade is now losing its edge so

cut it cut it fast don't wait for hope to kind of build you up [Music] do you hold for more or secure your profits before the market turns so now here's how to exit like a pro without you overthinking it remember let's go back to the three trends right in a strong trend you ride the wave so strong trend right small pullbacks strong momentum stay in the trade all right adjust your stop loss just below the 20 period moving average and hold it until price closes below it so this will keep you in the trend

as long as the buyers are in control and and when you are trading in a strong trend you can make a lot of money because the price can shoot like real fast uh all right so now number two the healthy trend the healthy trend that's where you what you take your profits in a smart way the pullbacks are deeper here all right so you got two choices right number one you exit before the price hits the previous high so that you can lock in your profits all right or number two you hold your trade longer

by using the 50 period moving average but hey you got to get ready for all these big pullbacks all right but in this way in a healthy trend if the trend keeps going on you can a lot of money all right so these are the two ways now next one in a weak trend in a weak trend that's where you you you don't want to get the trend is losing steam right you don't try to like I don't want to squeeze every last pip no no no no right you take your profit at the resistance

level or the previous swing highs before the market flips against you all right so now here's a simple rule all right strong trends they hold longer all right you hold longer weak trends get out faster all right so know when to let your winners run and when to cash out before the momentum dies trade pullbacks at key levels right to conclude trade pullbacks at key levels what are the key levels support and resistance levels trend lines moving averages they are the prime areas for the price to reverse to next follow the trend going against the

momentum is a losing game right identify what the three trends the strong the healthy or the weak to know when to enter all right the third one look for confluence so when multiple factors they align like the trend line is not aligning with the moving average it's not aligning with the support level right the more the marrier right the setups becomes a whole lot more reliable right next use clear entry triggers right for example candlestick patterns price rejections breakouts right confirmation on when to enter right all this will prevent entering prematurely all right next plan

your exit in advance so take profit based on the trend strength so sometimes you have a fixed take profit based on the previous highs that kind of stuff you're all based on trend strength but a trend strength is good sometimes you can have a trailing like all the ways that we have talked about right so and cut your losses when the price invalidates your setup right don't hold and don't hope no no no no no right final tip right think of the market in zones they are not single level right the market is not perfect

you can expect slight deviation right so that's why you want to focus on the areas where price is likely to react so thank you so much for watching if you enjoyed this video please give it a thumbs up right it really helps to keep the channel growing and if you are new here don't forget to hit that subscribe button and turn on the notification bell so that you never miss an upload so we also love to hear from you right drop a comment below and let us know what you think or what you like to

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