Matt, a seasoned trader at Trade View, recently marked his 6th anniversary with the company.
During a reflective moment, he took a stroll down memory lane and revisited his early trading models, which he had saved in X Builder. In discussing the development of one of his earliest models, Matt explained the reasons behind its creation and the key techniques he had learned since then.
This particular model, a simple pull-back system, has stood the test of time and continues to perform well even today.
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Automated entry after the pullback occurs to follow the trend
Automated Pullback Trading Strategy
Pullback trading strategy is a popular approach among traders, especially those who deal with stocks, futures, and forex. It is a simple but effective trading strategy that involves buying a security after it has pulled back from its recent high. In this blog post, we will discuss pullback trading strategy in detail, including its definition, benefits, and how to implement it.
What is Pullback Trading Strategy?
Pullback trading strategy is a type of trend following strategy that involves buying a security after it has pulled back from its recent high. In other words, traders wait for the price to dip before entering a long position. The rationale behind this strategy is that the price will continue its upward trend after a brief dip.
Benefits of Pullback Trading Strategy:
One of the main benefits of pullback trading strategy is that it allows traders to enter a trade at a relatively low price. This can increase the profit potential of the trade, as the trader can hold the position as the price continues to rise. Another benefit is that it allows traders to avoid buying at the top of a trend, which can lead to significant losses.
Implementing Pullback Trading Strategy:
To implement pullback trading strategy, traders must identify a security that is in an uptrend. They can do this by using technical analysis tools such as moving averages, trendlines, and chart patterns. Once they have identified a security in an uptrend, they should wait for a pullback to occur. The pullback should be at least 10% of the recent high. Traders should then enter a long position, using stop-loss orders to limit their potential losses.
If you would like to learn more about creating automated trading strategies check out the Trading Talk series which has a new episode each week with different topics and concepts on popular automated trading strategies.
Why wait? Get started today. Sign up for an account today with our Forex broker www.tradeview.tech and start creating your own automation.
