8. ABC Pullback in Bull Trend: 2 Leg Sideways to Down

1. Identify ABC Pullback in Bull Trend:

Two legs down, one leg up, it's a bull trend price correction.

It usually has 2 legs sideways to down. But it DOES NOT always has to be down.

High 2 pullback is a signal bar in bull trend.

Buy on stop above the signal bar (High 2 Pullback), to get Long entry.

2. Recount if the break out is large

If the break out is bigger, I'll recount from High 1.

As we can see the 1st H2, it is too big for the previous bull trend.

So I need to recount, following are a new pair of H1 & H2,

2nd pair of H1 and H2 are more like sideways, rather than "pullback down". So it DOES NOT always has to be down.

3. Inside bar is a pause

The 3rd pair of H1 & H2 in the chart, the bar before H1 is a inside bar. It is NOT a pullback, because it dosen't have a low price than the previous bar. It just a PAUSE of the bull trend.

Buy stop above High of Signal Bar (H2)

Anytime, the markets forms a Double Bottom, Bull Flag, it's a High 2 buy setup.