Strategy to trade pullbacks with EMA 10

Strategy to trade pullbacks with EMA 10

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Updated: Aug 24, 2022
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After reading Mr.pip’s article: “Price Action: Reflections from the Basement” I remembered a simple strategy to enter the market after pullbacks, the optimal time to open a trade, which I used for quite some time with good results. on daily charts.

The strategy is based on identifying a trend, waiting for the breakout of the trend line and entering after the first pullback that we will identify using a 10-period EMA.

I. Step 1: Identify the trend

We will identify the trend through drawing trend lines. To do this, draw a line that joins the minimums if it is an upward trend or the maximums if we are facing a downward trend. This trend line will be our support/resistance that will need to be broken.

Establecer tendencia mediante línea de tendencia

II. Step 2: Wait for the breakout

After identifying the trend in the previous step, we will wait for a breakout in the opposite direction. The trend line will be broken up if we are in a downtrend and down if we are in an uptrend. This breakout must be strong and wide to ensure as much as possible that it is not a false breakout.

Breakout de la línea de tendencia

III. Step 3: Identify the pullback and open our trade

Once the breakout has occurred, the optimal time to open the trade is after the first pullback. We will identify the pullback when the price reaches the 10 EMA. At this point we will enter in the direction of the breakout.

Identificar el pullback con EMA 10

IV. Step 4: Monitor the position

This is the most complicated phase of the strategy because we cannot have a fixed profit objective, this will be at previous support/resistance levels that we must monitor.

Monitorear resistencias o soportes para salir del mercado

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.

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4. Pisco Sour Strategy
5. European Open Strategy
6. EMA 10 Pullbacks
a. Strategy to trade pullbacks with EMA 10
8. News Trading Strategy
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10. MACD Strategy
11. Countertrend Strategy
12. Martingale
13. Soldiers Strategy
15. Trendline Strategy

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