Trading ES pullbacks intraday using price action only

Discussion in 'Index Futures' started by jbob, Aug 17, 2007.

  1. jbob


    I'm curious how people approach trading ES pullbacks intraday using price action only. Let's say the market is trending upwards or you suspect it is starting to trend after breaking out of a consolidation. For discussion purposes and to keep things simple, let's take the example of a bull flag. The market shoots ups and starts to pull back. When and where do you look to enter? Here's three potential scenarios:

    1) Pullback to a specific price and buy at that specific price (ie Fib retracement #, moving average, trendline support, ect....)--possibly even putting in a limit order in advance. Therefore, for this you really are "trading the number." This gets you a great price, but it can mean you are trying to catch a falling knife if the pullback turns into a reversal.

    2) Let the pullback occur, looking for nice Bull flag, then buy (possibly even using a buy-stop order) as it breaks out of the bull flag to the upside. Advantage here is that you get in with the momentum on the strong trades, but there is the high probability you could also get whipsawed.

    3) Look for the same pullback/Bull flag as seen in #2, but buy before the breakout to the upside. Advantage here being you get a good price if it does break out with more profits, or that you even will have a bit of a profit cushion if it quickly reverses to possibly get out at breakeven. However, buying in the consolidation before the breakout can lead to getting shaken out oftentimes before the move resumes.

    Which of these 3 or other variations do people use for trading pullbacks? Let's please try to stick to an analysis of price action. Its all there in the price. Thanks.
  2. i don' no nuthin' 'bout bear flags or any other flags (t.a. is bunk!), but can tell you wait 'till 2 emas get kissin' close, 'cause that may (may not) be the sweet spot.
  3. Each of the three have merit. I prefer to let the market show high and low prices where a high-price bar on the chart is preceded and followed by a price-bar with a lower-high & a low-price bar is preceded and followed by a price-bar with a higher-low and then use those as references to determine trend reversal or continuation.