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TREND / PULLBACK

Trend Pullback · trade the retracement

Define a retracement, an invalidation point and when to stay out.

MARKET PHASEEstablished trend with an orderly pullbackTEST FRAMEWORKExample: H1 trend, M15 signal
Educational framework. Examples are planning assumptions, not proven trading edges or a guarantee of passing. Fees can be lost; official account rules always apply.
Trend → pullback → confirmationSchematic illustration · no real market data or trading signal
01

Describe trend objectively

One possible definition uses higher highs and higher lows on a fixed timeframe. Decide which structure counts and what invalidates the context. A moving average alone does not demonstrate a tradable edge.

02

Wait for the retracement

Define a zone and confirmation trigger. Place the stop where the hypothesis fails, then calculate size. If there is insufficient room to the next relevant area after costs, skip the trade.

03

Respect exclusion conditions

Do not enter with unclear structure, a restricted news event or no daily allowance remaining. Skipping is part of the method. Test retracement depth, trigger and exit separately rather than changing parameters after every session.

04

Test entry and exit separately

Specify which close ends the pullback. One possible long signal is a break of the last local M15 high following a higher low within an H1 trend. Decide beforehand between the next swing high and a trailing exit. Do not automatically add when the pullback deepens.

WORKED EXAMPLE / NOT A FORECAST

Hypothesis: established rising structure, a retracement to a previously marked area, a defined trigger and a stop below invalidation. A target such as 1.5 R belongs in the test definition; it is not an expected or guaranteed return.

Before you trade

  • Define structure, zone and trigger in advance.
  • Do not add to a losing position.
  • Make exit and time stop as explicit as entry.

Common mistakes

  • Treat every retracement as trend continuation.
  • Widen the stop after entry.
  • Choose a target without considering costs and structure.

RESEARCH & RULE CHECKS

Our examples are editorial planning frameworks. CME explains the relationship between stop distance and position size. FTMO illustrates why daily, overall and consistency rules must be read separately for the specific account.

AQR / Trend-following research ↗CME / Position sizing ↗FTMO / Trading objectives ↗

Continue building your process.

TREND / MOMENTUM

Trend Following · follow the trend

Follow established trends with a defined direction filter, bounded losses and a preplanned method for trailing winners.

Open playbook ↗OPEN / BREAKOUT

ORB · Opening Range Breakout

Define the opening range and evaluate a confirmed breakout with an explicit session, stop and cancellation rule.

Open playbook ↗ICT / POWER OF THREE

AMD · Accumulation, Manipulation, Distribution

ICT’s Power of Three framework: make consolidation, a possible false break and subsequent expansion observable and testable.

Open playbook ↗