How to make money on market corrections

The price never rises or falls in a straight line. When rising, traders periodically record profits, because of which the price decreases slightly. When falling, sellers pause, and the rate temporarily rises. Such temporary movements against the main trend are called correction (or rollback). To track such moments and keep accurate statistics of your trade, use our [online trader diary] (https://tradepad.trade/). Opening trades at the very top of momentum is a common mistake. The ideal moment to enter comes immediately after the rollback is completed.

The strategy of finding signals on rollback

To catch the best entry point, you can use a clear candlestick rule:

• With an uptrend: wait until 2-3 red candles are formed on the chart (downward movement). Once the pullback slows down, open a trade for a raise.
• With a downtrend: wait for the appearance of 2-3 green candles (rolling up), then open a deal for a decrease.

Вход в сделку на покупку

Rule of depth of rollback and risk control

How do you know that you are still facing a correction, and not a complete reversal of the trend?

• Safe zone: correction should not exceed 50% of the length of the previous impulse movement.
• Danger zone: If the pullback goes deeper than the middle of the past momentum, the trend is threatened. Going into a deal in the same direction becomes too risky.

Checklist before entering the deal

• Where is the general movement going? (Determines the direction of the transaction: up or down).
• Where exactly am I opening? (Determines the quality of the entry point: is the correction completed?).

Even the [basic strategy] (https://tradepad.trade/strategii/), based on the search for trend corrections, allows you to close more than 60% of trades.