Modular Trend Pullback Strategy

#pinescripts #pinescriptsai #tradingview

This strategy focuses on trading pullbacks within established trends. Instead of entering immediately when a trend forms, it waits for a temporary retracement and then looks for confirmation before placing a trade. The goal is to improve entry timing while keeping risk controlled.

Core Idea

Markets often move in waves. During a strong trend, price tends to retrace toward a short-term average before continuing in the dominant direction. This script attempts to participate in those continuation moves.

How It Works

1. Trend Identification

Two exponential moving averages (EMAs) define direction.

Fast EMA above Slow EMA → bullish environment
Fast EMA below Slow EMA → bearish environment

2. Pullback Condition

In an uptrend, price must retrace below the fast EMA.
In a downtrend, price must retrace above the fast EMA. This avoids chasing extended moves.

3. Break Confirmation

After a pullback, the strategy waits for price to break the previous candle’s high (for longs) or low (for shorts).
This acts as confirmation that momentum is returning in the direction of the trend.

4. Risk Management

Stop-loss and take-profit levels are based on ATR (Average True Range), allowing exits to adapt to current volatility.
A configurable risk-reward ratio defines profit targets.

Key Features

Non-repainting logic
Entries only when flat (no stacking positions)
ATR-based dynamic stop and target levels
Commission and slippage included for more realistic backtests
Structured, modular logic for easier testing and adjustment

Suitable Market Conditions

This type of approach generally performs best in:
Trending environments
Instruments with sustained directional movement
Timeframes where pullbacks are clearly visible It may underperform in sideways or low-volatility markets.

Notes

This script is intended for research and testing purposes. Results will vary depending on symbol, timeframe, and market regime. Always evaluate performance across multiple market conditions before considering live execution.

`//@version=6
strategy(
    "Modular Trend Pullback Strategy",
    overlay=true,
    initial_capital=100000,
    default_qty_type=strategy.percent_of_equity,
    default_qty_value=5,
    commission_type=strategy.commission.percent,
    commission_value=0.05,
    slippage=1
)

// ───────── INPUTS ─────────
fastLen = input.int(20, "Fast EMA")
slowLen = input.int(50, "Slow EMA")
atrLen  = input.int(14, "ATR Length")
atrMult = input.float(1.5, "Stop ATR Mult")
rr      = input.float(2.0, "Risk Reward")

// ───────── INDICATORS ─────────
emaFast = ta.ema(close, fastLen)
emaSlow = ta.ema(close, slowLen)
atrVal  = ta.atr(atrLen)

// ───────── TREND ─────────
trendUp   = emaFast > emaSlow
trendDown = emaFast < emaSlow

// ───────── GLOBAL TRIGGERS (ALWAYS EXECUTE) ─────────
breakHigh = ta.crossover(close, high[1])
breakLow  = ta.crossunder(close, low[1])

// ───────── PULLBACK LOGIC ─────────
pullbackLong  = trendUp and close < emaFast
pullbackShort = trendDown and close > emaFast

longTrigger  = pullbackLong and breakHigh
shortTrigger = pullbackShort and breakLow

// ───────── ENTRIES ─────────
if longTrigger and strategy.position_size == 0
    strategy.entry("Long", strategy.long)

if shortTrigger and strategy.position_size == 0
    strategy.entry("Short", strategy.short)

// ───────── RISK MANAGEMENT ─────────
longSL  = strategy.position_avg_price - atrVal * atrMult
longTP  = strategy.position_avg_price + atrVal * atrMult * rr

shortSL = strategy.position_avg_price + atrVal * atrMult
shortTP = strategy.position_avg_price - atrVal * atrMult * rr

strategy.exit("Long Exit", from_entry="Long", stop=longSL, limit=longTP)
strategy.exit("Short Exit", from_entry="Short", stop=shortSL, limit=shortTP)

// ───────── VISUALS ─────────
plot(emaFast, color=color.orange)
plot(emaSlow, color=color.blue)`

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