Finance Guru Speaks | Beginner's Guide to Trading & Investing

The Pullback Strategy - How I Enter Strong Trends Without Chasing Prices

2026-03-14T13:57:00.000+05:30

Finance Guru Speaks: This article shares one of the best Intraday Trading Strategies - Pullback Trading Strategy. Toward the end of the article, I will also share a crucial Tip that can save you from false pullbacks.

In my years of trading and teaching, I have noticed one common habit that separates successful traders from the rest. They don't chase stocks. They wait for the stock to come to them.

Let me explain.

When a stock is moving strongly upward, most beginners get excited and jump in immediately. They buy at the highest point, only to watch the price dip moments later. Panic sets in, and they exit at a loss. Then the stock resumes its upward journey without them.

If this sounds familiar, do not worry. Today, I am going to teach you a strategy that professionals use to avoid this exact situation. It is called Pullback Trading.

What Exactly is Pullback Trading?

Pullback trading is a method where you enter a trade not when the price is exploding, but during a temporary retracement in the direction of a strong trend.

Think of it this way. A strong trending stock is like a long-distance runner. Even the best runner cannot sprint continuously. They slow down briefly to catch their breath, then resume running. Smart spectators place their bets during that slowdown, not when the runner is already sprinting past them.

In technical terms, you wait for the price to temporarily reverse against the trend, then enter when the original trend resumes.

Why I Prefer the Pullback Strategy

Over the years, I have found this strategy valuable for several reasons:

Low-Risk Entry Points: When you enter during a retracement, your stop-loss is much closer. This means you risk less money while targeting the same profit.

Trend Continuation: You are not guessing or predicting. You are simply joining a trend that has already proven itself. The probability of success increases significantly.

Structured Approach: This strategy removes emotional decision-making. You have clear rules. When price reaches your level, you act. When it does not, you wait.

Avoiding the Tops and Bottoms: Most beginners lose money by buying at the peak or selling at the bottom. Pullback trading keeps you away from both.

How Pullback Trading Works - Step by Step

Let me break down the exact process I follow when looking for pullback trades.

Step 1: Identify a Strong Trend

First, I look for stocks that are clearly trending. In an uptrend, I need to see higher highs and higher lows on the chart. In a downtrend, I look for lower highs and lower lows. Without a strong trend, pullback trading does not work.

Step 2: Spot the Pullback

Once the trend is established, I wait for the price to take a breather. It should retrace toward key technical levels. In my experience, the 20 EMA (Exponential Moving Average) and 50 EMA act as strong support or resistance during pullbacks. Fibonacci levels of 38.2% or 50% are also worth watching.

Step 3: Check the Volume

This step is critical. During a genuine pullback, volume should be decreasing. Think about it. If the price is falling but fewer people are selling, it means the selling pressure is dying out. If volume is increasing during the pullback, be careful. This is often amateurs getting trapped.

Step 4: Wait for Confirmation

Never enter on the first sign of a pullback. Wait for a confirmation candle. In an uptrend, I wait for a bullish engulfing candle or a hammer forming at the support level. In a downtrend, I look for a bearish pin bar rejecting the resistance.

Step 5: Enter with a Stop-Loss

Once confirmed, I enter the trade. My stop-loss is placed just below the pullback low in an uptrend, or just above the pullback high in a downtrend.

Step 6: Set Your Target

My target is usually the previous swing high in an uptrend, or the previous swing low in a downtrend. I also maintain a risk-reward ratio of at least 1:2. This means if I am risking 10 points, I expect at least 20 points in return.

Let Me Share Two Recent Examples

Example 1: Pullback Trade in Tata Consultancy Services (TCS)

Last month, TCS was moving in a strong uptrend. The stock had climbed from around INR 3,400 to INR 3,700 over a few days. Most beginners would have chased it at INR 3,700. I waited.

The stock started a pullback and retraced toward its 20 EMA. I watched the volume carefully. It was declining. Good sign. At INR 3,630, a bullish engulfing candle formed right at the 20 EMA support. That was my confirmation.

I entered at INR 3,630 with a stop-loss at INR 3,600, just below the 20 EMA. My target was the previous high of INR 3,700.

The stock respected the level beautifully. Within two hours, it hit my target. A clean 70-point gain with minimal risk.

Example 2: Pullback Trade in Axis Bank (AXISBANK)

Here is a downtrend example. Axis Bank had been sliding steadily from INR 980 to INR 920. After this drop, the price pulled back upward, retracing toward the 50 EMA.

At INR 950, a bearish pin bar formed, rejecting the 50 EMA resistance. Volume during the pullback had been decreasing. All signs pointed to the downtrend resuming.

I entered short at INR 948, with a stop-loss at INR 960 above the resistance. My target was the previous low of INR 920.

The trade played out over the afternoon session, and I exited near the target before the market closed.

Now, time to Share the Tip

I promised you a tip that can save you from false pullbacks.

Here it is: Always check which time frame the pullback is happening on.

Many traders see a pullback on a 5-minute chart and enter immediately, only to realize they were catching a reversal on the hourly chart.

Here is what I do. I identify the trend on a 30-minute or 1-hour chart. Then I drop down to a 5-minute or 15-minute chart to time my entry. If both time frames align, the probability of success increases dramatically.

If the higher time frame shows a pullback but the lower time frame shows a reversal pattern forming, I stay out. Patience has saved my capital more times than aggression ever has.

Risk Management - Do Not Skip This Section

I cannot emphasize this enough. The best strategy in the world will fail without proper risk management.

Use Logical Stop-Losses: Place your stop-loss based on technical levels like support, resistance, or moving averages. Do not use random percentages.

Limit Your Exposure: I never risk more than 1-2% of my trading capital on a single trade. If the trade goes wrong, I live to trade another day.

Avoid Mid-Day Entries: In my experience, momentum and volume are weakest between 12:30 PM and 2:30 PM. I prefer the first 90 minutes after market opening and the last 90 minutes before closing.

Do Not Average Down: If the price violates your retracement zone and hits your stop-loss, exit. Do not add more positions hoping for a reversal. That is how small losses become big ones.

Common Mistakes I See Traders Make

Over the years, I have observed these mistakes repeatedly. Learn from them.

Entering Without Confirmation: The pullback looks perfect, so you enter early. Then the price keeps falling. Always wait for that confirmation candle.

Ignoring Volume: Rising volume during a pullback is a warning sign. Do not ignore it.

Trading Against the Trend: A pullback in a weak trend is just a reversal in disguise. Trade only with the dominant trend.

Overtrading: Not every pullback needs to be traded. Quality setups give better results than quantity.

Skipping the Stop-Loss: I have seen talented traders blow up their accounts because they thought "this time it will come back." It does not always come back.

Final Thoughts

Pullback trading has been one of the most reliable strategies in my journey. It teaches patience, discipline, and respect for the trend. But remember, no strategy works 100% of the time. Sometimes the pullback turns into a full reversal. When that happens, accept the small loss and move on. The next opportunity is always around the corner.

Try this strategy tomorrow. Pick a trending stock, wait for the pullback, look for confirmation, and take the trade with a proper stop-loss. Then observe what happens. Over time, you will develop a feel for which pullbacks work and which do not.

In future articles, I will cover additional aspects of Trading and Investing, including how to combine pullbacks with options strategies. Keep Reading!

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Amateurs Open The Market and Professionals Close The Market

2023-06-17T20:17:00.006+05:30

Finance Guru Speaks: This article details the Amateur and Professional approaches toward the Market. Toward the end of the article, I will also share a Tip that can drastically improve your trading profits.

In the fascinating world of Trading, there is a popular saying: "Amateurs open the market and professionals close the market."

This statement highlights an important aspect of trading dynamics that distinguishes inexperienced traders from experienced professionals. While it may sound like a simple observation, the underlying implications are profound.

In this article, we will explore the meaning behind this statement and delve into the key lessons it offers to aspiring traders.

1. The Amateurs' Perspective

Amateurs tend to jump into positions without conducting thorough research, relying heavily on tips, rumors, or short-term market trends. They might open trades without a solid plan in place, overlooking essential risk management strategies.

Amateurs, in the context of trading, typically refer to individuals who are relatively new to the markets or lack trading experience. They are often driven by greed and are influenced by market noise. Their trades are often based on impulsive decision-making.

They might open trades without a solid plan in place, overlooking essential risk management strategies.

2. The Professionals' Approach

Professionals understand the importance of thorough analysis, risk management, and long-term strategies. Professionals spend significant time conducting research, studying charts, analyzing trends, and developing robust trading plans. They patiently wait for high-probability setups that align with their strategies, rather than chasing every market movement. Professionals prioritize risk management, employing techniques like setting stop-loss orders, position sizing, and proper trade management.

One key advantage professionals have is their ability to analyze market trends, conduct technical and fundamental analysis, and apply risk management strategies. They make informed decisions based on reliable data, carefully weighing the potential risks and rewards of each trade. By doing so, professionals often secure profits while amateurs are left struggling to recover from impulsive trades.

3. The Differences lie in their Perspectives

The key difference between amateurs and professionals lies in their approach to entering and exiting trades. Amateurs are more likely to enter the market impulsively, driven by emotions and short-term market movements. They may enter a trade based on a tip they heard or a sudden surge of FOMO (fear of missing out). This behavior often leads to inconsistent results and exposes them to unnecessary risks.

On the other hand, professionals understand that successful trading requires careful analysis, patience, and discipline. They focus on identifying optimal entry points based on their strategies and wait for the market to confirm their analysis before committing capital. Furthermore, professionals recognize that exiting a trade is just as critical as entering it. They employ various techniques, such as trailing stop-loss orders or profit targets, to lock in gains and protect against potential reversals.

4. Journey from Amateurs to Professionals

The journey from being an amateur to becoming a professional trader requires dedication, education, and hands-on experience. Amateurs can enhance their trading skills by investing time in understanding market dynamics, studying various trading strategies, and gaining practical experience through paper trading or dummy trading accounts. Building a solid foundation of knowledge and practicing risk management techniques is essential to transition from impulsive trading to a disciplined approach.

The more knowledge you acquire, the better equipped you'll be to make informed decisions.

Develop discipline and patience in your trading approach. Avoid impulsive trades and wait for high-probability setups that align with your strategies. Remember, not every market movement requires your immediate action.

Trading should be viewed as a marathon, not a sprint. Focus on long-term profitability rather than seeking quick gains. Consistency and perseverance will yield better results over time.

Continuous learning is the key. Stay updated with market trends, news, and evolving trading strategies. The trading landscape is dynamic, and continuous learning is essential to adapt and improve your skills.

Conclusion:

The saying, "Amateurs open the market, and professionals close the market," encapsulates the differences between inexperienced traders and seasoned professionals. Amateurs, driven by emotions and lacking experience, contribute to market volatility and provide opportunities for professionals to capitalize on. Professionals, armed with knowledge, discipline, and experience, excel in closing the market by making calculated and well-timed trading decisions.

Becoming a professional trader requires dedication, continuous learning, and the ability to manage emotions. By investing in education, practicing sound trading strategies, and gaining experience, amateurs can evolve into professionals capable of making informed trading decisions and achieving long-term profitability. Remember, trading is a journey, and with perseverance, amateurs can work towards closing the market like Professionals.

Now, time to share the Tip:

When the Market opens, look for booking the profits out of your existing positions. You need to make use of Amateurs rush to enter the market as soon as it opens.

During the Market closure, try to create new positions. This is the time period when the Professionals control the Market and the Stock or Index price is at its optimum price range of the day.

In future articles, I will cover additional aspects of Trading and Investing. Keep Reading!

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How To Online Close FD Account In Bank Of Baroda?

2023-02-12T16:32:00.001+05:30

Finance Guru Speaks: In the previous article, we have provided steps on how you can open Fixed Deposit (FD) or Term Deposit (TD) Account in Bank of Baroda.

In this article, we will provide information on how you can Cancel or Close your Fixed Deposit (FD) Account by using the Internet Banking facility.

You can read the below articles as well:-

How To Open FD Account Online In Bank Of Baroda Using Internet Banking?
How To Order Cheque Books in *Bank Of Baroda* Using Internet Banking?

Below are the steps to Close Fixed Deposit Account in Bank of Baroda:

Step 1: Login to BoB Internet Banking website by clicking Here:-

Bank of Baroda - Retail NetBanking

Provide your User ID and click on LOGIN, as shown below:-

Bank of Baroda - Retail NetBanking Login

Provide your Sign On Password & Captcha and click on LOGIN, as shown below:-

Bank of Baroda - Retail NetBanking Login

Step 2: Once you are logged-in, click on Deposit Accounts under Accounts as shown below:-

Click to enlarge - Bank of Baroda Close FD Account

Step 3: Against the FD Account which you want to close, click on Premature Closure of Deposit Accounts link, as shown below:

Click to enlarge - Bank of Baroda Close FD Account

Step 4: Select the Credit Account where the FD amount will be credited after closure. Click on CONTINUE button:-

Click to enlarge - Bank of Baroda Close FD Account

Step 5: Verify all the details of FD Account along with the deductions due to prematurity and enter Remarks & your Transaction Password to close your Fixed Deposit Account. Click on SUBMIT button:-

Click to enlarge - Bank of Baroda Close FD Account

Congratulations on successfully closing your online FD Account in Bank of Baroda using Internet Banking facility.

Images Courtesy: Bank of Baroda (https://www.bobibanking.com)

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How To Open FD Account Online In Bank Of Baroda Using Internet Banking?

2023-01-25T23:33:00.002+05:30

Finance Guru Speaks: This article will provide information on how you can open Fixed Deposit (FD) or Term Deposit (TD) Account in Bank of Baroda using Internet Banking facility.

You need to have Internet Banking facility available in BoB (Bank of baroda) to open FD through Online Banking.

You can read below articles as well:-

How To Open Recurring Deposit Account Online In Bank Of Baroda Using Internet Banking?
How To Order Cheque Books in *Bank Of Baroda* Using Internet Banking?

Below are the steps to open FD Account in Bank of Baroda:

Step 1: Login to BoB Internet Banking website by clicking Here:-

Bank of Baroda - Retail NetBanking

Provide your User ID and click on LOGIN, as shown below:-

Bank of Baroda - Retail NetBanking Login

Provide your Sign On Password & Captcha and click on LOGIN, as shown below:-

Bank of Baroda - Retail NetBanking Login

Step 2: Once you are logged-in, click on Open Fixed Deposit Account under Investments as shown below:-

Click to enlarge - Bank of Baroda Open New FD Account

Step 3: Select your Debit Account against which you want to deduct FD Amount, select FD Scheme, FD Amount, FD Duration, Nomination and Auto Renewal option. Click on CONTINUE button.

Click to enlarge - Bank of Baroda Open New FD Account

Step 4: Verify all the details of FD Account details along with the offered FD Interest rate, provided Nomination details and enter Remarks & your Transaction Password to create your new Fixed Deposit Account. Click on SUBMIT button:-

Click to enlarge - Bank of Baroda Open New FD Account

Congratulations on successfully opening your online FD Account in Bank of Baroda using Internet Banking facility.

Click to enlarge - Bank of Baroda Open New FD Account

Images Courtesy: Bank of Baroda (https://www.bobibanking.com)

How To Close or Cancel Online FD (Fixed Deposit) Account Using SBI Internet Banking?

2022-10-27T11:45:00.004+05:30

Finance Guru Speaks: Do you want to close or cancel your online FD (Fixed Deposit) account through SBI (State Bank of India) Online Banking?

If yes, then follow the below steps to cancel your FD account through OnlineSBI:-

1. Login to OnlineSBI website, using your Username, Password, and OTP (if requested).

OnlineSBI Login Page

2. Go to Deposit & Investment -> Fixed Deposit, as shown below:-

Click to enlarge - Close FD Account SBI Online Banking

3. Click on Fixed Deposit (e-TDR/e-STDR) link as shown below:-

Click to enlarge - Close FD Account SBI Online Banking

4. Select Fixed Deposit (e-TDR/e-STDR) option and click on Proceed button, as shown below:-

Click to enlarge - Close FD Account SBI Online Banking

5. Click on Close A/c Prematurely button, select your FD to be canceled, and click on Proceed button, as shown below:-

Click to enlarge - Close FD Account SBI Online Banking

Congratulations!! You have closed your online FD Account successfully using SBI Internet Banking facility.

Images Courtesy: State Bank of India Website

If you like my work, then you can support me by subscribing to :

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