STM Smart Pullback Engine

STM Smart Pullback Engine

STM Smart Pullback Engine is a trend-continuation pullback indicator designed to identify high-probability retracement entries within a clearly defined market structure.
Built on Smart Trade Mastery (STM) principles, this indicator focuses on discipline, clarity, and structure-based trading — not breakout chasing.

Core Concept

This indicator waits for:

A clearly aligned trend

A controlled pullback

A price-action confirmation

Only when all conditions align does a trade signal appear.

Trend Filter (EMA Alignment)

Trades are allowed only when EMAs are properly aligned:

Uptrend
EMA 8 > EMA 50 > EMA 200

Downtrend
EMA 8 < EMA 50 < EMA 200

If EMAs are not aligned, the indicator stays inactive and no trades are generated.
This helps avoid sideways and choppy market conditions.

Pullback-Based Entry Logic

Buy Conditions
• Price remains above EMA 200
• Pullback occurs by:
– Price touching EMA 50, or
– Engulfing candle opening below EMA 8
• Candle must not break EMA 200
• A bullish engulfing candle forms

Sell Conditions (Reverse Logic)
• Price remains below EMA 200
• Pullback occurs by:
– Price touching EMA 50, or
– Engulfing candle opening above EMA 8
• Candle must not break EMA 200
• A bearish engulfing candle forms

This ensures trades are taken only during healthy pullbacks within an existing trend.

Engulfing Confirmation Options

Strong Engulfing (Optional)
When enabled:
• Buy → candle closes above the previous candle’s high
• Sell → candle closes below the previous candle’s low

This reduces signal frequency and improves confirmation quality.

Engulfing with Low Volume (Optional)

When enabled, an engulfing candle is valid only if it forms with lower volume than the previous candle.

This helps identify pullbacks caused by reduced market participation, which are commonly seen before trend continuation moves.

When disabled, engulfing candles are evaluated without any volume condition.

RSI as an Event (Not a Continuous Filter)

RSI is used as an event, not as a constant filter.

A valid setup requires:
• An RSI cross
• An engulfing candle

Both events must occur within a user-defined number of bars (default: 2).
The order does not matter — RSI may occur before or after the engulfing candle.

This prevents RSI from remaining always true during strong trends and reduces false signals.

Opposite Wick Filter (Optional)

To filter weak rejection candles:
• Buy setups evaluate the upper wick
• Sell setups evaluate the lower wick

The wick size can be measured as:
• A percentage of the full candle range, or
• A percentage of the candle body

Candles with excessive opposite wick size are automatically rejected.

Visual Guidance

• Blue candles → Uptrend
• Orange candles → Downtrend
• Grey candles → No-trade zone

Buy and Sell labels appear only on candle close (non-repainting).
RSI cross arrows are shown for additional confirmation.

Best Use Cases

• Trend continuation strategies
• Pullback / retracement trading
• Forex, Gold, Indices, Crypto
• Recommended timeframes: M5 to H1

Disclaimer

This indicator is for educational purposes only.
Always use proper risk management and confirm trades with your own analysis.

Powered by Smart Trade Mastery (STM)