Published in January 2017 issue of Stocks & Commodities.
1. Wait for a 5-day close-to-close uptrend.
2. If the closing prices retrace 50% of the uptrend's distance (± 1 percent) over the next 10 bars, a valid pullback has formed.
3. Over the next 10 bars, look for the prices to rebound and buy on a stop 50 cents above the retracement price. If this condition hasn’t been met within 10 days, the setup is invalidated.
4. A second entry is made if first position has been established and the high price breaks through the 15-day highest high price.
1. Exit on a $1 stop loss from the retracement price.
2. Exit with a profit target at 2 times the retracement distance.