• Trading Information - Buying Into a Pullback
• The Equilateral Triangle
• Trading Chart Patterns
• Share Purchase Plans
• Yellow Cake…Anyone?
• Read the tape – it can tell an interesting story

A pullback in the market occurs after a stock breaks out of its trading range and decreases in value; there is usually at least one profit-taking correction that brings the price of the stock down closer to its breakout point. Essentially it makes more sense to buy a stock after a wave of selling has occurred rather than getting caught in a sell-off but the trick is to know when to jump in the deep end in sink or swim market conditions.

So what is the perfect timing when it comes to pullbacks? The key lies in identifying the trends and reading the clues of the charting landscape. The entry and exit are the harder parts to identify. Study different technical indicators to anticipate future changes in prices, compare the price and indicator performances, and then make sound and profitable trading decisions. It's natural for markets to correct after big rallies. This countertrend move sets up the ideal conditions for a swing back to higher prices which is the ideal scenario. But any pullback can potentially turn into a reversal and trap your share position in a downward spiral. This needs to be avoided at all costs.

The first pullback is the one after a trend. You can get into a stock at the beginning of a trend, at a point of low risk, and you can take partial profits and ride the wave or trend to completion. There is one other type of pullback worth mentioning and that is the first pullback after a breakout which is a price movement that reaches the upper or lower boundaries of a trading range. If you are looking at stock that is trading sideways or forming a basing pattern, and it suddenly breaks out of the pattern, you can look to buy the first pullback after the breakout. This also gives you a low risk entry into a stock that will likely continue the current trend and sets up the pullback that you can get into with low risk, high odds, and a profitable reward.

There are no hard or fast answers to playing the stock market and buying ASX shares. You must be able to take losses as well as reap financial rewards. You can dip your foot into the market or jump in the deep end but you must ride the highs of lows of the stock market without letting emotions dictate your investment strategy. Take control of the emotional and psychological stumbling blocks and you will be on your way to becoming a shrewd investor.