A trader explains buying dips to the 10 EMA on a 5-minute chart instead of chasing breakouts. When price pulls back and bounces off the moving average, you enter long with a stop just below it. The idea is that pullbacks into key support often lead to the next leg up while keeping risk tight.
The other entry tactic that I like to do is, you know, when I do notice that breakouts have a tendency to fade, although we're in the context of an uptrend, but then it's become more choppy, perhaps because, you know, the market itself is somewhat extended. I have a preference as well for buying on weakness. And so what this looks like again on the 5-minute chart, so rather than buying on strength through the breakout level, I would buy in anticipation, say into a moving average. What it would look like on a 5-minute chart is say price kind of opens, it gives you that first initial pump, and then It starts to fade, fade, fade. And then on the daily chart, you have your, let's just say, 10 exponential moving average. This blue line here is your 10 exponential moving average. So it would move like somewhat in a stair-step fashion in the intraday. And so what I'm looking for is for price to kind of touch it and then start to turn higher. So what I would do is I would buy that pullback right into the moving averages. You know, I buy it as it turns right here, and I would set my stop loss at the low of day or below the moving average.
