Pullbacks… a simple retracement structure depicted in textbooks as smooth flowing and simple to read.
Reality though, is usually not so kind.
Far too often these pullbacks will be a mess. Full of chop, false-starts and stop-outs. Or unexpected and sudden shifts in pace or volatility.
Price action seemingly designed to confuse you and cause you to react emotionally and impulsively. Tempting you to enter too early and stop out. Or hesitate and miss the entry entirely.
In time, with experience, you'll improve your ability to read the market. And your ability to perceive edge.
And develop some rules-of-thumb for how to best manage these situations, when it seems the market is putting up a fight.
Let's look at one example of a rule, which guides me through a pullback that hits harder than expected.
When the pullback hits harder than expected – step aside.
Don't be tempted to chase the first entry. If it v-turns and you miss the trade, let it go. It wasn't yours to catch.
The far better option is to wait for a second push lower and reassess.
Consider whether or not this rule might add value to your trading.
And then when you're comfortable with this, see if you can expand your skill level to find the exceptions to the rule. Those times and places where you might take that first entry. Because they exist as well.