Wait for Pullbacks

08/20/2008 12:00 am EST

Focus: STRATEGIES

Bo Yoder

Publisher and Writer, 5MinuteInvestor.com

When the market is in transition, traders often scramble to reposition themselves in order to capitalize on the new trend, but while these "catch up" trades might be satisfying to the ego, they don't put maximum edge in your pocket. There is a lot more money to be made if you have the patience to wait for the first pullback. A precise pullback entry would have the tightest stop and the best risk-to-reward ratio of the entire series.

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