Each month, the Trader’s Edge highlights success stories of Wizetrade customers as told in their own words. In this issue, we are focusing on options traders who have listened to daily training sessions and are using a 3-Day Pullback strategy developed by expert trainer Don Folkerth.
The objective of this strategy is to minimize time spent in the market by observing market movements and following retracements. This strategy is designed to work best when used Monday through Thursday, with entry being made in the last 5 to 10 minutes of the market. Traders should scan the market for stocks that match the “Pullback” criteria during the last half hour of the market.
The strategy works by building the trade on a strong Long Term chart. A ‘strong’ chart is one that is trending either bullish or bearish with increasing angle and separation. The Mid Term chart needs to support the Long Term chart by confirming the trend. The Short Term chart needs to display at least three (3) days of trading reverse to the Long Term trend direction.
If the Long Term trend is going up: Look for at least three (3) days of lower intraday highs. If the Long Term trend is going down: Look for at least three (3) days of higher intraday lows.
The entry within the last 10 minutes of the market depends on the strength of the 30 Minute chart. If the 30 Minute light is displaying stair-stepping volume within the last three (3) time frames, strength is building. Another indicator could be the trading volume in the last half hour. If the last half hour’s volume is twice the preceding half hour’s volume, and the green line displays strong angle in the direction of the Long Term chart, entry is recommended. At the time of entry, the Short Term chart should be traveling against the Long Term trend by at least three (3) days. The trigger starts at the end of the third day. If the trigger does not occur on the third day, check the following day up to the fifth day for entry. The point of this strategy is to wait for the retracement to become exhausted and turn around to follow the Long Term trend.
The exit criteria are simple: Exit the trade when the profit goal is reached, stop loss has been executed, or choose to close the position based on new chart conditions.
While the 3-Day Pullback Strategy might not fit your individual trade style or plan, it has proved to be a beneficial addition to many traders’ toolkits. Read what some fellow Wizetrade customers had to say about this strategy and the quality of training that is now available through the Wizetrade TV player:
“Don, thanks so much for taking the time and dedication to develop the 3 day pullback strategy. Also, thank you for being the tireless champion of this strategy. My success ratio has grown by leaps and bounds because this simplifies everything for me. The most important aspect to this 3 day strategy process is not so much as the strategy, but the mental discipline that you instill. My discipline has improved greatly; therefore, my trading has improved as well. The chart reading is fairly easy, but the Discipline!!!! THAT is the hardest thing to master. After losing bunches, and bunches of money, I think that I am finally getting it (I hope so!!)."
—Tyler Smith in California
“Morning Don! I did my first 3 day pullback. I found about 6 last night and narrowed it down to GS. It set up nicely. I just got one contract and was a bit nervous and unsure of when to get out, but I did manage to capture $144. I am grateful and it sure is encouraging to have a strategy that I can use and like. … Listening to you each morning is so helpful. I need the repetition and you help me with discipline which is essential. I would definitely be watching and learning from you if you can be on in the afternoon.”
—Maryanne Stokes in New York
“I would really appreciate having both the "Opening Bell" and the "Closing Bell" on WTV. I have all of the software and have had some of it for "years" but have come to the conclusion that it is better to key in one or two methods. I see value in Don's broadcasts about his strategy using WFO!”
—Fred Woods in Kansas
“Don, we met in a training class about a year ago in New Jersey. At that time I was floundering with the Wizetrade software and losing money. I attended another training session in Detroit, which you taught and it began to make sense to me. I have faithfully listened to you for the last 8 to 10 weeks. Have made 9 trades, all profitable using the 3 day pullback method. … Your sessions have taught me how to read the charts and plan the trades.”
—Mike Kumbier in Delaware
“Don, I really like the strategy. I find it very beneficial and I've been following it for a few months with some success. I think your rules on it and the concept is excellent. I like that it is simple. I've adapted some of the rules and "tweaked" them a little for the current market environment because I'm in a more active mode for right now in the market. When Swing Trades become an easier trade I see this trade excelling.”
— Ziggy Rahmas in Nevada
“Don, I met you at WizeFEST this year when you were explaining your Three Day Pullback strategy. I have listened to your webcast presentation daily since September. … I have learned more about trading from you than from anyone else. Monday through Thursday, you are able to evaluate trading candidates from the start with follow up the next day. This method creates a routine that, over time, has developed my discipline and patience as a trader. I am not only learning from you, but also from the other attendees of the webcast. Their questions and comments are very informative and helpful. Over the past two months, I have gained confidence with the software and my skills as a trader. I am excited about my future! I am also looking forward to your broadcasts on the new Wizetrade TV.”
—Daniel Bilka in Texas
“I have been listening to Don Folkerth's Opening Bell class, and have learned a great deal, especially about chart reading. His 3-day pullback plan seems to be one of the few trading plans that work in this choppy market. Since Don's plan is an overnight hold strategy, it would be great to have another class during the last hour of the market.”
—Liz Steiner in Nevada
“I appreciate the help you've given me and I'm glad to tell you it has been an improvement to my strategy. As I mentioned to you, I use technical indicators and with the 3-Day Pullback using the Month, Week, Day and 30 Minute light, it has helped me to minimize losses and maximize winners. I want you to know that my wife has increased her IRA account by 54% in 6 months and I have increased my regular active account by 58%, despite how the market has been going.”
—Ernesto Cervantes in Texas
“I just wanted to let you know that I have greatly benefited from listening to you every morning and make it a priority everyday. I'm beginning to understand more and more that you don't have to be in a trade all the time and patience is the key.”
—Ryan Suderman in Kansas
“Don, want to say thanks. I started watching your way of trading a couple of weeks ago. It has helped a lot, just to have some direction back in trading. I love the fact that you have very simple rules and that they are very easy to follow. All black and white... No Gray areas. Either it is or it is not. Thanks again.”
—Larry Wisdom in Illinois
“Don, I like the idea of watching a stock go for 3 or 4 days of a pullback before you consider getting in with the price over $25, over $1 ATR and making sure I have the volume. I am a newbie at options and it helps because you go to the option chart; watching you explain why you pick the option you do is of great value. I feel confident enough to start option trading with real $$$ when the opportunity arises.”
—Fred Harwell in Wisconsin
“Don, I want to add my thanks to others who appreciate the time you and effort you spend teaching us your retracement strategy. It’s logical, disciplined, and for the first time, I am making money consistently. I made $400 this morning on GS and $200 on NTRS. Not only am I more successful, but as president of the Sacramento Wizetrade User Group, others in the group have started listening to you (at my encouragement) and are also seeing more success.”
—Dottie Ferguson in California
“Don, Just wanted to say thank you for your Web-based training. I have taken your setup style and applied it to my trading plan. I was extremely profitable last year, but like many others this year has been a real challenge. I have been trading with Richard Leonard and he was telling me about your class. I sat in one day and really like the way you choose your trades. I have put the higher lows and lower highs (depending on the way you’re going) in my own trading and have been successful with a couple of trades thus far.”
—Lt. Tim, VP of Maryland “Crabby Traders” Options User Group
Many of the customers who contributed comments above referenced the desire for additional training on Wizetrade TV. We hear you—and we once again deliver!
With the launch of Channels 2, 3 and 4, all of our Talk Live and Wizetrade University Virtual Classroom training (formerly Webex and Citrix) is now available exclusively through Wizetrade TV, and we have live-in-the-market training classes for equities in the morning and afternoon.
Regardless of which market you trade or software you use, there is training available 24/7 through Wizetrade TV! Be sure to consult the programming guide on the Wizetrade TV Player, or view the schedule in a PDF format to find the training programs you want to watch.
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