Trading Strategies
Pullback Trading
Entering in the direction of an established trend after a counter-move retraces to an area of interest, rather than chasing the move itself.
In plain English
Pullback traders wait for a trending market to come back to them: a retest of a broken level, a moving average, or a fixed retracement zone. The entry is with the trend at a better price, the stop hides under the pullback low, and the target is the trend resuming.
For prop risk rules this style is friendly: entries near structure keep stops small relative to targets, supporting the low P/D style math evaluations reward. Its weakness is strong trends that never pull back, which pullback traders simply miss.
- NQ breaks out and runs 60 points, then retraces 20 to retest the breakout shelf.
- A trader buys the retest with a 10 point stop for a fresh leg higher.