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[Tlahuicole]

Complex Pullback Setups

Pullback and complex pullback setups are associated with a trend (uptrend/downtrend). So as a first requirement a trend must be present in the chart.

Trend

A trend is nothing but a extension in the direction of the strength, a higher swing high, a pullback/retracement forming a higher swing low.

When does a trend reverse ?

lets consider we are in an uptrend, when the price breaks the swing low which leads to the highest swing high of the trend. Failure to break the swing low that leads to the highest high could simply indicate a complex pullback rather than a reversal.

When to expect a complex pullback ?

A failed simple pullback which does not reverse the trend can setup a possible complex pullback opportunity. The very basic form of complex pullback is 1-2-3 reversal pattern, but a much complex form of continuation is also possible.

What happens when a complex pullback fails ?

When complex pullback fails to break the swing high of the uptrend, price goes in to a sideways region where the boundaries are the swing high and the swing low that leads to the swing high of the trend.

Other patterns such as symmetrical, ascending, descending triangle formation also happens when the complex pullback stup fails.

@ Tlahuicole bro, Pardon me for the delayed post. .

Now on 18th Oct nifty fut chart, there was a complex pullback setup present. Can you identify it now ?

Regaards
Taiki

Awesome post Taiki, Thanks for teaching us this method, please check if I have analysed the friday nifty chart correctly for CPB entry, exit and stop loss.

1 - This is the latest low which gets broken down side at point 2, the trend is so far uptrend.
2 - This is the point where previous low bouncing point low is braeched(Pivot low). This is also a pivot low.
3 - This is where we enter where previous pivot high is take out and SAR will be at point 2 if flow trading or SL will be at point 2 for trend trading.

Please correct if my assumptions are wrong bro, I failed to understand entry point alone as per your method. If what I entered as per charts is wrong kindly do correct me. Mostly I would be wrong, slow learner

 

[Taiki]

Awesome post Taiki, Thanks for teaching us this method, please check if I have analysed the friday nifty chart correctly for CPB entry, exit and stop loss.

1 - This is the latest low which gets broken down side at point 2, the trend is so far uptrend.
2 - This is the point where previous low bouncing point low is braeched(Pivot low). This is also a pivot low.
3 - This is where we enter where previous pivot high is take out and SAR will be at point 2 if flow trading or SL will be at point 2 for trend trading.

Please correct if my assumptions are wrong bro, I failed to understand entry point alone as per your method. If what I entered as per charts is wrong kindly do correct me. Mostly I would be wrong, slow learner

Hi TL bro, check the chart. On friday I had entered as per this setup, but from 3 min chart. Here I have marked the same in 5 min chart as the chart you posted was a 5 min chart. Observe the price stall after the swing low E. That will be our entry point. I entered at 6160 with SL below 6150.

lets say you are entering with 2 lots, when the pivot high at 6178 is taken out, one should consider of booking part of the profit and trailing the SL for remaining lot.

Regards
Taiki

So as per this CPB setup, our SL will be below swing low E, and entry should be close to the SL,

 

[Taiki]

Thanks Taiki for the explaination. Is there a way to determine when there will be a Pullback and when there will be a Complex pullback. In your diagram, suppose you had played for a pullback at G with SL just below G. Your SL would have got hit and then the CPB setup would have formed. So at the time of PB, is there some signal which could indicate us to possibly wait for a CPB? I hope I have made my query clear.

Yes brother, I got you.

See, pullback and complex pullback are both associated with an ongoing trend. and both are trend continuation setups. There is no hard and fast rule as when a pullback will occur or when a complex pullback will occur. But we can predict it with our trend analysis.

When a trend is strengthening single leg pullback is a higher probable setup where as during a weakening trend complex pullback gives higher probable trades. We can use the swing momentum comparisons, projection/depth analysis, price acceleration or deceleration to conclude if the trend is strengthening or weakening.

Regards
Taiki

 

[Tlahuicole]

Hi TL bro, check the chart. On friday I had entered as per this setup, but from 3 min chart. Here I have marked the same in 5 min chart as the chart you posted was a 5 min chart. Observe the price stall after the swing low E. That will be our entry point. I entered at 6160 with SL below 6150.

lets say you are entering with 2 lots, when the pivot high at 6178 is taken out, one should consider of booking part of the profit and trailing the SL for remaining lot.

Regards
Taiki

So as per this CPB setup, our SL will be below swing low E, and entry should be close to the SL,

Now understood thanks taiki

 

[arcus]

Hi TL bro, check the chart. On friday I had entered as per this setup, but from 3 min chart. Here I have marked the same in 5 min chart as the chart you posted was a 5 min chart. Observe the price stall after the swing low E. That will be our entry point. I entered at 6160 with SL below 6150.

lets say you are entering with 2 lots, when the pivot high at 6178 is taken out, one should consider of booking part of the profit and trailing the SL for remaining lot.

Regards
Taiki

So as per this CPB setup, our SL will be below swing low E, and entry should be close to the SL,

In classical technical analysis, its called a descending wedge pattern.

 

[akrsrivastava]

Yes brother, I got you.

See, pullback and complex pullback are both associated with an ongoing trend. and both are trend continuation setups. There is no hard and fast rule as when a pullback will occur or when a complex pullback will occur. But we can predict it with our trend analysis.

When a trend is strengthening single leg pullback is a higher probable setup where as during a weakening trend complex pullback gives higher probable trades. We can use the swing momentum comparisons, projection/depth analysis, price acceleration or deceleration to conclude if the trend is strengthening or weakening.

Regards
Taiki

Thanks. Adding to what you said, I also read that if price is retracing after sudden WRB upmoves, then we should expect a CPB.

 

[Taiki]

Thanks. Adding to what you said, I also read that if price is retracing after sudden WRB upmoves, then we should expect a CPB.

correct bro.. :thumb:
When candles are over extended from the EMA it often shows CPB setup, touches ema and then continue in the direction of the trend

Regards
Taiki

 

[_Rajesh_]

Taiki bro,

You seem to be very well organized and clear in your thoughts. Super achievement since you are relatively new to trading as a profession. All the best. I am following your thread and hope to learn a lot from you. :thumb:

 

[Taiki]

Taiki it seems you have been quite busy of late...

But in case you find some time can you please help me with Stop losses.

How do you determine where to place SLs specially early into the trade

(sorry boarders I have been asking this doubt too many times and too many threads though I know ST da always says fixed SL dont work; but please bear with me )

Hello Jain bro,

Previously I was actually facing this issue when I was choosing an entry location and keeping a stop at 8-12 points below the entry level. Most of the time my stop was getting hit and after that market was moving in the desired direction. It was then I realised and asked my self why I am keeping a stop of 12 points ? Why not a stop loss of 25 points. The answer was 25 point stop was way out of my risk taking capability on a single trade. Then the next question was even If i can afford a risk of 25 points stop on a single trade, Is that any guarantee that it wont get hit ??

So the first requirement of stop placing came as it should be chosen as the level, which when hit will invalidate your trade premises. Lets say I am anticipating a breakout pullback setup long setup. So let the bears show what all they have got. And my stop will be below that point and if price will reach the stop level, then It should invalidate my long setup, and no more I will be looking for a breakout pullback long trade.

Therefore now my approach is determine the initial stop level, choose an suitable entry close to stop (minimize the risk), Once entry triggered manage the trade actively rather than choosing an entry first and keeping a stop below 10-15 points below that.

Sometimes after the stop region is defined, I don't find a proper entry level/pattern, and I have to let the price go, as the trade setup does not favour my risk reward ratio. for example yesterday after 1PM i did not find a trade favouring my risk reward ratio, so no trades were done after 1 pm.

Lastly, whenever a stop is getting hit it means either we have an early entry, or our trade premises is an invalid one. So we must look deeper in to our trade analysis method If price is moving in our expected way or not. And stop loss is a risk management exit, and is there to minimize the loss and keep us alive in the game. So it should be welcomed.

Regards
Taiki

 

[Taiki]

Yesterday's Trade

Regards
Taiki