Pullbacks

A pullback is the disappointing time when a stock is trending upward but the price point falls for a few days before heading back up. Many people make money trading just pullbacks and rallies but I'd always recommend trading with the stock market and the stock's trend.

Uptrending stocks rarely only go up for months at a time, about every 5 - 10 days the stock will fall for about 3-5 days and then head back up just to hit a higher price point than before it fell. If you're looking to get in a swing trade after a pullback  - be sure of two things before you hit the "buy" button: first, be sure that the pullback does not last any longer than 5 days and secondly, don't trade a stock if during the pullback, the price point has fallen below support. 

Once a pullback has lasted more than 5 days the general idea is that the stock's uptrend is not as strong as it once was or as strong as it should be. These stocks are not typically good candidates to swing trade long on.

 Another pullback caveat is if the pullback caused the stock to go below support - this is called a "breakout." Breakouts are not good in any case because it makes the stock a lot less reliable. If it has a few crazy days where it trades out of its norm then you can't trust that its going to perform for you like you need it to. Its a rebel - it's going to do what it wants.

The opposite of a pullback is a rally.

Swing-trade-stocks has a great segment on when to get in and when to get out of a trade that helps illustrate pullbacks and rallies.