7 Levels That Separate Smart Entries from Guesswork

by Roger Scott | Jul 8, 2026

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One of the most common mistakes I see traders make is thinking that any pullback is a good pullback. They see price dip, get excited about a better price and jump in — only to watch the stock keep falling.

Here’s the thing: Not all pullbacks are created equal.

If you’re taking entries in random spots — what I call no man’s land — you’re gambling. But if you’re waiting for price to pull back to one of seven key levels, you’re stacking the odds in your favor.

The lowest risk pullback trades are taken when price reverts down to the eight-day exponential moving average, 15-day EMA, 50-day moving average, 100-day MA, 200-day MA, quarterly VWAP and annual VWAP. These aren’t arbitrary lines on a chart — they’re structural levels where buyers tend to step in and defend the trend.

But there’s another layer most traders ignore: volume and news. When a short-term trend pulls back with rising volume, the message is completely different from a quiet drift lower.

Heavy volume often means emotion, and emotion can distort structure. Pair that with sudden news, and you can end up taking a pullback in front of a freight train.

Staying plugged into reliable, real-time news sources like Financial Juice, which has free accounts, can give you the context behind the candles and help you avoid stepping into avoidable volatility.

Why Key Levels Beat ‘Cheaper’ Prices Every Time

Let me give you a real-world example that trips up a lot of traders.

Say a stock is trending higher. You get a signal at $148 in empty space — no moving average and no VWAP nearby. Then you get another signal at $152, right at the 50-day MA.

Most traders think $148 is cheaper than $152, so that’s the better deal. But that’s not how the market works.

A signal at $148 in empty space is not as valuable as a signal at $152 near a key moving average. There’s a higher probability that price will bounce at a key level than at no man’s land.

Understanding where price sits relative to the long-term trend is a foundational skill. This has nothing to do with any specific system — it’s just trading. If the long-term trend is intact and price pulls back to a structural level, you’re trading with the tide instead of against it.

One simple visual I use is what I call the American flag setup on daily charts. If price is above the 50-, 100- and 200-day MAs, I call that the American flag, and it means you’re in bullish territory. If it’s below, you’re not. It’s a fast way to orient yourself before taking any trade.

Where the Highest-Probability Entries Live

Pullbacks near key moving averages or key VWAPs are much more valuable than pullbacks that are in the middle of thin air. That’s the reality of market structure.

The best pullbacks happen at the 50-, 100-, 200-day MAs and our VWAPs. When volume is stable, the long-term trend is supportive and news isn’t throwing fuel on the fire, those levels do their job with remarkable consistency.

The next time you’re evaluating an entry, ask yourself: Is this near one of the seven key levels? Is the long-term trend aligned? Is volume confirming the move? Am I aware of the news behind today’s price action?

Those questions alone can turn a coin-flip trade into a high-probability setup.

I hope that helps!

Roger Scott
Roger Scott Trading

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