How To Trade Volatile Trend Pullbacks In Momentum Stocks (Winning Netflix Trade)

Trading Volatile Trend Pullbacks

trading volatile markets

You guys know I love trading trend pullbacks, especially shallow pullbacks in momentum markets. Generally, I don’t like volatile trend pullbacks, but rather pullbacks that are orderly and thus, easy to trade.


It’s because trend pullbacks are a money makers, and if you follow the setup correctly, it’s a no brainer that offers great reward to risk. When the market is booming and pullbacks are bought up, there is not a setup that’s more effective. Even breakouts pail in comparison. This is why I trade the post breakout move rather than the breakout itself.

In the past I’ve focused on a “relative strength” as a key element for trading the trend pullback setup.

The reason we give importance to relative strength is stocks that hold up well during pullbacks tend to resume trend at a higher rate than beaten down stocks.

However, there are exceptions to every trading rule, and today’s Netflix trade review is a great example. This pullback actually showed relative weakness and is a “volatile trend pullbacks” setup.

In today’s video, we analyze the volatile trend pullback setup using out recent winning trade alert in NFLX. Key elements of the trade include:

  1. Analyzing the trend
  2. The different between orderly and volatile pullbacks
  3. Key entry signals
  4. Targets and exit strategy
  5. Trading before earnings announcements
  6. Post earnings breakout setups

Watch, learn and let me know if you have any comments or questions.

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