Pullback Trading

Pullback Trading

Enter established trends during temporary retracements for optimal risk/reward.

Identification

Pullback Levels

| Level | Depth | Trend Strength | | --- | --- | --- | | 20/50 EMA | Dynamic | Strong (shallow) | | Fibonacci 38.2% | Shallow | Strong trend | | Fibonacci 50% | Moderate | Normal trend | | Fibonacci 61.8% | Deep | Weak but valid | | Previous S/R flip | Variable | Structure-based |

Entry Confirmation (require before entering)

• Reversal candlestick pattern (hammer, engulfing)
• Momentum indicator turning in trend direction
• Volume decrease during pullback, increase on resumption

Workflow

1. Confirm Trend on Higher Timeframe

get_indicators returns one indicator per call — fetch each separately:

get_candles(symbol=, exchange=, interval=, count=120)
get_indicators(indicator_code="ema_21", symbol=, exchange=, interval=, count=120)
get_indicators(indicator_code="ema_50", symbol=, exchange=, interval=, count=120)

Then verify trend strength via the canonical 5-bar slope of EMA50:

execute python3 -c "ema50=[]; s=(ema50[-1]-ema50[-5])/ema50[-5]*100; print(f'htf_ema50_slope_pct={s:.3f}')"

Active trend requires BOTH:

• slope > +0.5% AND ema_21 > ema_50 AND price above ema_50 (bull), OR
• `slope , exchange=, interval=, count=60)

Uptrend: HH/HL structure, price pulling back toward support (ema_21, ema_50, prior swing low, Fib 38.2/50/61.8). Downtrend: LH/LL structure, price pulling back toward resistance (mirror).

### 3. Check Momentum at Pullback Level

getindicators(indicatorcode="rsi21", symbol=, exchange=, interval=, count=20) getindicators(indicatorcode="macdfast", symbol=, exchange=, interval=, count=20)

Cite RSI / MACD as a **3-5 value progression** (latest value alone is folklore):
- Uptrend pullback: `RSI21 47.8 (62.4 → 55.1 → 49.0 → 47.8)` — pulling back from extreme toward 50, NOT crossing 50 (40-50 is the pullback sweet spot). MACD histogram shrinking toward zero but NOT flipping sign.
- Downtrend pullback: mirror — RSI pulling up from low extreme toward 50, MACD histogram shrinking from negative toward zero but NOT crossing into positive.

### 4. Mark Entry Zone

drawchartanalysis(action="create", drawing={ "type": "demand", "points": [ {"time": , "price": }, {"time": , "price": } ], "options": {"text": "Pullback Entry Zone (38-62%)"} })

### 5. Report to Orchestrator

Trend direction and strength, pullback depth (which Fib level), confirmation signals, entry level, stop below pullback low, target at previous swing high/low.

## Key Rules

- NEVER trade pullbacks without confirmed trend direction (EMA50 5-bar slope >+0.5% bull / 61.8%) need stronger confirmation -- the trend may be reversing
- Stop goes below pullback low (uptrend) or above pullback high (downtrend), with an ATR buffer (0.3× ATR(1H) for BTC/ETH, 0.5× for alts) to avoid stop hunts
- First pullback in a new trend has the highest probability of success — older trends mean less remaining runway
- Compute EMA slope via `execute`; do NOT call ADX / DMI / Supertrend (API-billed, not in the free whitelist)

## Related Skills

- **momentum-trading** -- pullbacks occur within momentum moves
- **breakout-trading** -- first pullback often retests the breakout level

## Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

- **Author:** [SKE-Labs](https://github.com/SKE-Labs)
- **Source:** [SKE-Labs/agent-trading-skills](https://github.com/SKE-Labs/agent-trading-skills)
- **License:** Apache-2.0

Install and usage instructions live in the source repository linked above.