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.
Hi Cad, Thanks a lot of your Blogs!
ReplyDeleteI have a question. Wouldn't you consider entering at b19 instead of b24? And wouldn't b24 constitute a third push to ema instead of second (b17-19-24)? Although b19 wouldn't be the strongest of entries, with a weak signal bar (doji) and a little removed from the ema (though not very far); but it will also be the first A2 of the morning, so without the benefit of hindsight, wouldn't seem worth taking in the real time.
Thanks again for your valuable insights into price action trading. Appreciate it a lot!