Easy Pullback Strategy

Well ive been using many pullback strategies over the past years and i've been doing quite well, I'm currently on an FTMO evaluation and hopefully will pass it soon.

The thing is that over the years, as many traders do, i've been trying to better my timing of the market, and as well increase my RR ration.

As i traded various ways of "catching" a pullback i started considering "working" with the noise instead of avoiding it, and started realizing some "flaws" within my entries criteria which i worked on.

Noise now a days is mostly called manipulation and etc i think by the ict / smc traders.

Eventhough i studied ict and smc, as well as traded with no indicators and nothing else but price action on my chart, i realized that i didnt want to become a slave to the charts, i'm already a slave of my bussnesses where i usually work 14h a day

I didnt want to wait for setup on lower timeframes, didnt want to wait for liquidity of london or asia sessions and etc... What i really wanted to is to open my mt5 app, and with a glipse know where and how to take action.

I trade similar to the "easy pullback strategy" that i created around 2019 and there is a thread on it here in Forex Factory somewhere.

What im using is a simple aproach with the following rules:

OVERALL RULES:

4H CHART
EMA: 20 AND 50
STOCHASTIC: %K: 10, %D: 2, Smoothing: 3 ( simple - close/close)

A+ Setup: The stoch cross should be on the overbought/sold position (80/20), the candle close that made the stoch cross should be in between the emas,

B+ Setup: For shorts the cross should NOT happen under the emas , and For longs the cross should NOT above the emas

Be sure to validate your entries with D and W timeframe, is both D/W are with emas on longs, it might not be a good idea to short the 4h.

ENTRY MODELS AND CARACTERISTICS:

MODEL 1:

First of all for this entry model we should have a clean leg up or down, ideally with no opposite candles, the less the better.
In this case, after the cross os stoch, we should put fib from the highest upper wick down to the wick of the closed candle that made the stoch cross.

The entry should be takeng at 78fib with stops at 123.6.


MODEL 2:

the entry after this cenario is at fib 111.8 or -11.8 with stop loss at 138.2,

You should put fib from top till the wick of the candle for buys
You should put fib from bottom to wick of the candle for sell



You can see that here we have a "complex" push instead of a "clean" one, this is more os a subjective aproach but in time you'll get your eyes around it.

The idea here on this entry model is to "work" with the noise/manipulation meaning that eventhough stoch crossed we should not enter on the break of low/high of the candle, instead we wait for liquidity to take place positioning out order above/below the candle perfecting our entry, and increasing our RR

Average RR is 1:4. try to go with Daily and Weekly emas, but doing it mechanically only looking at the 4h works well!

Note: As you may backtest it, you'll "well entering on the break of the candle here would have given me 1:2, and here 1:3 and etc..." well you can adjust your entry model the way it suits you best, but im trading like this as i prefer not to enter the trade with no manipulation, instead of entering and the getting stopped out.

BREAKEVEN:

Im currently putting my order on BE once the stochastic gets to the other "over cenario" zone with its two lines, it saves us a lot since we can never be sure when market will make a HL or LH and reverse.

Obs: I find model 1 riskier since i prefer to wait for a manipulation before entering the trade, but once i have a "clean" leg i usually take both entries.

some of the examples got SL hit if you consider the spread.
What do you do in case of SL?
Do you use any money management?

good stuff mate

Interesting. Subscriped

need more example and wish you to pass ftmo challenge

Interesting and worth a try on daily, maybe an hour after market open when spread has settled down. Look forward to further comment.

Following.

Preparing for these entries. Love the fact that it does not take much screentime. Let's see how this goes.

GCad got me stopped at model1 entry, it was a clean push up but didnt work out, my second entry unfortunatly didnt get filled



Eaud was a beautiful move, with a "complex" leg up, currently i'm on BE

Attached Image (click to enlarge)

So I see your are also trading on stoch crossover without de candle close between de ema's.

BTW, The SL hit happened to me during backtesting several times. Maybe putting SL to BE when stoch gets to 50 might help avoid that.

About the trading outside the emas, i described the A+ setup on the thread, but you can have a B+ as you apply the rules described under:

it should NOT happen under the emas for short, and NOT above for longs, i need to adjust and edit on the thread,
also i saw it valid since eventhou price was above them (short) they were still bearish

these EA was a safer short since it alligns with daily emas and weekly its almost there, Gcad was riskier since D and W are with bullish emas,

thanx for the coment

Can you share some exemples of sl hit during your backtest?

I usually put fib from the highest high of the movement

Dear WDaouFX
AU estimate
pls advised

yeah bro, im waiting as well

i dont enter directly on fib levels, please check out the entry models on the thread,

cheers

Thank you

Let me see if I get it.

B+ sell setup:
Ema's trend down. Price goes up above the ema's. Stoch cross at/near 80 level. We draw the fib from previous swing low to the top of the wick of the candle that made the stoch cross. We enter a sell at the fib entry level.

B+ buy setup:
Ema's trend up. Price goes below the ema's. Stoch cross at/near 20 level. We draw the fib from previous swing high to the low of the wick of the candle that made the stoch cross. We enter a buy at the fib entry level.

Is this correct?


One other thing. When is the setup invalid? I would think if on a sell setup the swing low is broken before price hits our entry level or on a buy setup the swing high is broken before price hits our entry level.

Forget about the entry models, look at the position of the 4h only...

clean push up, 4h emas shot, D and W short, if the entry models take place here, im entering

what would we call it? an A- setup? D and W emas short, 4h emas short, but price is over the emas,

see what i mean?

Here it got us a perfect model1 entry, with a 1:6 RR but D and W were crossed for longs not short !

so , like i said, trading the 4h only can be done, but risk manegment is a must, there will always be a reason for a loss or a win trade, if we think to much we can get crazy

choose your rules around my system and follow them...

if you are more confortable trading with all tf emas alligned fine! to be honest i want to see an opportunity with a glipse on an eye, so most of the time i only look 4h.

But when i have doughts about the entry when looking at the 4h price, i take a look at D and W

I think I get it, thanks.