Pullback

Style:                   Momentum
Trade Type:       Trend continuation



Essence: 

  • Trend integrity:
    • HHHL, clear relative strength
    • Absence of huge countertrend surprises, ugly candles, tails or gaps in recent past
  • Trend leg:
    • Absence of climax/over-extension (too big candles near end, too far KPos)
    • Good momentum (same or better than previous) goes thru upper K-channel
  • Pullback:
    • In proportion to trend leg and prior pullbacks
    • Volatility decreasing
  • HTF:
    • Absence of countertrend (range is ok)

Entry:

xxx


Initial SL:            

xxx


Management: 

xxx


Profit target:    

xxx


Thoughts:          

  • FX and commodities may trend much longer and further than one would believe
  • Require passive mindset, less is more
  • A trend once established is more likely to continue than to reverse or end
  • The HTF trend exerts the most force and corrections occurring in the context of HTF typically will be resolved in the HTF direction