$BTC

Stock Price Behavior Analysis Course

Lesson Fifteen: Techniques for Pullbacks and Adding Positions in Trends

In a trending market, prices do not move in a straight line but will experience pullbacks or consolidations. Today, we will learn how to identify these opportunities and seize the moment to add positions or enter the market.

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1. What is a Pullback?

• A pullback is a temporary reverse fluctuation in a trending market.

Example: A brief decline in an uptrend is a pullback.

• A pullback is the process of market rotation and resting; if the pullback is healthy, the trend will continue.

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2. Characteristics of Pullback Patterns

Common patterns include:

• Flag

• Wedge

• Consolidation (Box)

Characteristics are:

➡️ Price convergence, reduced volatility, decreased trading volume, indicating a pause between bulls and bears.

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3. Entry and Adding Position Techniques During Pullbacks

1. Determine that the trend is still intact (high and low point structure is not broken)

2. Wait for signals indicating the end of the pullback (such as breaking the pullback structure, candlestick reversal patterns)

3. The adding point is usually at the end of the pullback or the breakout point at the end of the pullback

⚠️ Remember to set a stop-loss point at the low of the pullback / outside the structure to manage risk.

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Mastering pullbacks is key to evolving from "chasing highs and selling lows" to "buying low in trend."