Shalin Shah

This table should probably be it's own 3 hours masterclass video, but sharing it first here.. For anyone studying Martin's pullback strategy key question is "What moving averages shall we use"? This table answers that. And it shows what to expect of each. For longs, 21 EMA is the clear sweet spot. 50 EMA is borderline no-go (but small sample) For shorts, win-rate improves steadily as EMA increases, but 9 EMA still produces the highest mean R and avg gain Here's some additional valueable key insights: Martin's pullback setup was first developed for the short side MARTIN LUK: Actually I learned the pullbacks mostly from the short side first... For shorts, the best risk-reward play should be shorting at the resistance, right at the bounce or the pullback into the declining EMAs or into the resistance levels. So this is how I really dig deep in the pullback side, and also I just flip the short side around and then it will be the long side, and they are really similar. Why does he take 2/3 of his pullback longs at the 9 EMA when 80% fail, whereas 21 EMA longs has almost double win-rate and triple expectancy? MARTIN LUK: Then I bought it at the pullback on the daily 9 EMA... I think this one would be a fair entry. Definitely not the best one because it's like a slight pullback, and generally a pullback to the daily 9 has the lowest win rate amongst—or like a slower EMA will have the highest win rate—from my study. But sometimes stocks, you have to take risk. Sometimes if the stock pulls back to the 21, then you have a better entry, more high-win-rate entry, you have more conviction, or the risk-reward will be much better. But sometimes the stock, if it's strong like Tesla here, it doesn't pull back to the 21. So this time I'm just trying to take a risk and trying to test whether it works or not If we go back and look at the uptrend, especially a strong uptrend that the semi sector has made or the Qs has made: a lot of the times we get an uptrend, then we pull back into the 21 EMA and re-bounce at the 21, and then we start another uptrend—we start another leg up. WHY NOT JUST SKIP 9 THE 9 EMA FOR LONGS? Runaway Stage 2 leaders (MRVL, AAOI, NBIS, etc) surf the 9 EMA without touching the 21 EMA for weeks. To not miss the strongest momentum stocks in the market, Martin probes the 9 EMA aggressively with ultra-tight ~1.2%–1.5% stops WHY DOES 50 EMA LONGS FAIL, BUT 50 EMA SHORTS WIN? Don't have a good answer for that, yet. MARTIN LUK: I don't have a really good statistic on that, but... I tried this recently with the cybersecurity longs like NET. Before them, I think I rarely tried this type of pullback buys just purely off the 50 EMA. To me, it's a little bit more difficult and I'm still not good at doing that. I would prefer a pullback buy into the EMA convergence—when the EMAs are converging really close to each other—instead of purely buying the pullback into the 50 EMA. Compare that to how he describes his bread-and-butter 50 EMA Short: MARTIN LUK: Stocks tend to decline immediately, without further basing, right after being rejected at the declining moving averages, particularly the 21 and 50 EMAs. The tighter the EMAs, the higher the rejection rate. I think the ideal picture-perfect [short] would be the first breakdown of the 50 EMA and then the first pullback into the 50 EMA—and generally when [you get] the first breakdown and then a pullback into the 50 EMA, the 21 or the 9 would also be really near the 50 EMA too, and they start curling back and crossing down the 50 EMA --- A ton of other insights related to this particular chart.