What do pullbacks need for REALLY

What do pullbacks need for REALLY

You can find 1, 2, 3 or even more pullbacks within any up-trend. Why does market produce pullbacks?

The very first answer is :
if price would trending in straight line direction – it will be too easy for people to recognize trends and making money by joining the trend. But markets are not designed to make money for people. It designed to mislead people and make them fools. This is the correct answer IMO. And the next chart is showing this principle in a very clear way.

  • 1) Up-trend
  • 2) Here is pullback. This pullback is quite deep. It even penetrates…
  • 3) .. the previous minor low. So, people decided – here is the first lower low. Market has changed its behavior. We need to short. And they do it as can be seen…
  • 4) .. on this indicator. It mixes and shows data from broker houses. Green Line – Opened Longs. Red Line – Opened Shorts. As you can see, red line goes up. It means sellers established new positions. The number of buyers goes down. This is exactly what does market wants – remove buyers and attract sellers before the continuation of up-trend.

Pullbacks needed to complete this market’s objective.

Yes, You Can Become a Professional Chart Reader

To build success in any business, you should rely on things that really work.

In Chart Reading Method, they are three: The Law of Inequality, The Law of Supply & Demand, The Law of Effort & Result.

Download free books, to understand how can you apply the Laws and convert charts into profitable setups daily!

Enter your email to Download books

Start building your success with Chart Reading method. Let’s not go back to what wasn’t working anyway.

No spam is guaranteed.