How to Trade Minor Retracements (Micro Pullbacks)

✅ Quick Checklist

🔍 Identify a strong, clean uptrend
📉 Watch for a shallow pullback or single red candle
📊 Look for continuation on increased volume
⚡ Entry near the breakout of previous high
🛑 Tight stop loss below micro pullback

A minor retracement—also known as a micro pullback or V pullback—is a very brief pause or dip in a strong trend, often lasting just one or two candles. These setups offer high reward-to-risk entries when momentum is extremely strong.

What Is a Minor Retracement?

Unlike deeper consolidations like bull flags, minor retracements occur when the price briefly dips before resuming the trend. This might look like a single red candle (in an uptrend) followed by immediate continuation.

How to Spot the Setup

Clear, strong trend with minimal resistance
Micro pullback usually 1–2 candles, often with lower volume
Price holds above key moving averages (e.g., 9EMA)
Breakout occurs quickly—often same or next candle

Entry and Exit Strategy

Entry: As price breaks above previous high or forms new high intrabar
Stop Loss: Just below the low of the pullback candle
Target: Measured move or 1.5–2x risk/reward ratio

Why Minor Retracements Work

These setups exploit aggressive momentum and FOMO behavior—buyers jump in on even the slightest dip, causing a rapid continuation. Ideal in trending markets with news catalysts or earnings momentum.

Common Mistakes

Entering before confirmation or chasing late
Failing to set a stop loss
Ignoring broader trend or news context

Chart Pattern

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