If you’re familiar with our work, you know that 1R pullbacks are the meat and potatoes of what we do, what we teach and what we build software for. We have also written many times about the finer details of how we execute our pullback trades, including, more specifically about the three ways to enter this powerful pattern, and a (members-only) page on how we manage these trades.
Yesterday, we had the opportunity to practice our art in real time with our Premium subscribers, and now this 1R on 6E is behind us. But I do want to share the takeaways from this trade with a wider audience: the techniques employed, and to be discussed in this blog provide important lessons to all those who trade the re-emergence of momentum out of consolidation areas aka pullbacks.
So see below: at 12 noon (ADT) Aug 17, we identified an (at that time: potential) failure test, an important pattern in our arsenal as we trade pullbacks that we have written about before. The real-time notification was sent out to our membership (see image on the left). Our subscribers can use this information to make a plan, monitor the instrument and execute as appropriate, to the trade’s 1R conclusion at or sometime before 7.42pm (ADT) Aug 18 (see image on the right).
Apart from an example for the immense usefulness of Remek! Premium as a real-time skills development tool, the trade also demonstrates the major ways to enter pullbacks (described on the right and also discussed here. As you’ll see, in trading, as in life in general, there’s always a trade-off:
You want a better price? Okay, but then you’ll have to be content with less information.
You want to play a bit safer by insisting on more information? Okay, but then you’ll get a worse entry price.
One is not necessarily better than the other, and you may find that at times you may choose one over the other (which is fine, as long as you have documented the decision criteria in your written trading plan). In all cases, it pays to consider your own approach, your own psychology, trading style, risk and trade management techniques, and relavant personal circumstances, since one thing’s for sure: all successful trading businesses are founded on a sound plan.
Mindful trading!
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