Two Legged Pullback

The Two-Legged Pullback Setup

Prices on any chart and any time frame moves in pairs of twos, this is tied to human psychology. When traders try something once, they will usually try it again before giving up on the idea. The key with two legged pullbacks is to combine them with Key Entry Points to achieve high probability setups.

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Price action trading is a system of trading where a trader is only relying on his ability to read the naked chart and use Price Action.

The Trader is observing the candlesticks as they print on the chart and looking for patterns that repeat themselves over and over again.

The only people who know where the market is heading are institutions.

They are the ones who make the market move and our job as a retail traders is to follow their footsteps and get the piece of their movement. As price action traders we need to find the most profitable ways to enter trades.

The highest probability setups are 2nd entries at the key entry points.

Key entry points are:

  1. Trendlines – after a break we expect a correction or retest of a new extreme.
  2. Support and resistance lines – most breakouts of trading ranges fail
  3. EMA – 21 bar settings. The reason why we look for 2nd entries and not 1st or 3rd entries is tied directly to human psychology.

Trading with a fear is the most common fear most trade have. It is crippling and can get your mind frozen.

The key to consistency is to be emotionless and fear nothing in trading.

Two Legged Pullback