It depends on how we’re looking at a pullback. For instance, if I’m getting on board with a trend from the daily TF, my idea of a pullback may be a small countermove on the 1H chart. I’ve found that if I wait for a pullback on the higher TF, then I’m essentially waiting for something that’s probably not going to happen. Or, if it did happen, the market is now in reversal mode.
According to the Dow theory (which you can observe in every financial instrument), markets move almost NEVER in one straight line up or down, instead every time in a trend-move followed by a (weaker) counter-move. When you're entering the market is up to you, but as I'm using leveraged positions, I've got to place a very tight SL. Entering on the primary move would kick my position out as soon as the pullback sets in.
Yes. Right now it's technically possible/reasonable that a bear market rally has been completed at the "50% retracement level". If that turns out to be the case, chasing now or even "buying the dip" will lead to losses. If the 50% level breaks and tests the 62% retracement, same possible scenario. If the 62% level clears and holds, most likely ATH will be tested. Proper way to play the market now is to play the 50% and 62% levels as "pivots".... long above, short below. And if ATH is tested, play that as a pivot also.... it would be (at least temporarily) a large "double top". That's Price TA. KISS, baby.
You said "You really need to know the market you're trading - where it's at and where it's going". That would be ideal wouldn't it?
Just anecdotal evidence but I find that my best performers rarely pull back from my entry. If I wait for a pullback I wouldn't get in the trade.
Doesn't that just show that a mean reversion strategy works when the market reverts to the mean? What if the trend continues?