Our Trading Experts Alpha Members Joseph Park tried 3 support buy back trades and they all failed! He was wondering why so we breakdown the trade.

In short a support buy back is when a stock pulls back to a prior support level, this tends to work the best on the 1st major retest of support, you can also try it again on the 2nd major attempt, however after that as Joseph learned the more attempt at support increasingly the likely hood that the trade will fail.

So Step 1 - Find the major prior low, wait for the stock to pull back to that price, let it push down into it, and buy on the way up vs that low (do not try to catch the low)

Step 2- Once you are in, best course is to put your stop at the low (under support) then we look to move the stop to the prior low of day, then low of day, then break even, then we trail the position

We will break down why each failed

GS - his attempt was too early and a minor area of support, these trades have a high probability of failing as you are buying counter trend, when they work they can be easily 10:1 winners, its just a numbers game

IBM - was a perfect example of after the 1st and 2nd attempt back at support the trend tends to break support, his first trade was the 7th time at support and as a result the stock got smoked lower, given his stop loss, he only lost a few% compared to the 30% drop after it broke support

UTX - similar to IBM, where his first time trying to buy up off support in the name was on the 4th attempt and it ran right through it. Ben took it $20 lower after it broke down through the 2019 low and was only risking $4 when the stock ran up $14 from the entry.
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https://www.youtube.com/watch?v=xkuV1zs23mI