Trend Surge with Pullback Filter

Trend Surge with Pullback Filter

Overview
Trend Surge with Pullback Filter is a price action-based strategy designed to enter strong trends not at the breakout, but at the first controlled pullback after a surge. It filters out noise by requiring momentum confirmation and low volatility conditions, aiming for better entry prices and reduced risk exposure.

How It Works

A strong upward trend is identified when the Rate of Change (ROC) exceeds a defined percentage (e.g., 2%).

Instead of jumping into the trend immediately, the strategy waits for a pullback: the price must drop at least 1% below its recent high (over the past 3 candles).

A low volatility environment is also required for entry — measured using ATR being below its 20-period average multiplied by a safety factor.

If all three conditions are met (trend + pullback + quiet volatility), the system enters a long position.

The trade is managed using a dynamic ATR-based stop-loss and a take-profit at 2x ATR.

An automatic exit occurs after 30 bars if neither SL nor TP is hit.

Key Features
- Momentum-triggered trend detection via ROC
- Smart pullback filter avoids overbought entries
- Volatility-based filter to eliminate noise and choppy conditions
- Dynamic risk-reward ratio with ATR-driven exit logic
- Time-limited exposure using bar-based exit

Parameter Explanation

ROC Length (10): Looks for short-term price surges

ROC Threshold (2.0%): Trend is considered valid if price increased more than 2%

Pullback Lookback (3): Checks last 3 candles for price retracement

Minimum Pullback % (1.0%): Entry only if price pulled back at least 1%

ATR Length (14): Measures current volatility

Low Volatility Multiplier (1.2): ATR must be below this multiple of its 20-period average

Risk-Reward (2.0): Target is set at 2x the stop-loss distance

Max Bars (30): Trade is closed automatically after 30 bars

Originality Statement
This strategy doesn’t enter at the trend start, unlike many momentum bots. Instead, it waits for the first market hesitation — a minor pullback under low volatility — before entering. This logic mimics how real traders often wait for a better entry after a breakout, avoiding emotional overbought buys. The combined use of ROC, dynamic pullback detection, and ATR-based environment filters makes it both practical and original for real-world trading.

Disclaimer
This strategy is intended for educational and research purposes. Backtest thoroughly and understand the logic before using with real capital.