PaperTrade Hub

Pullback to a rising average

Trend following · Difficulty: Beginner

Education only. Delayed data. Past results do not predict future results. Not financial advice, and no strategy here promises a profit. Every strategy can lose money, and a rule that worked on past charts may stop working. Practise with virtual money first.

Try it on the desk →

The idea

In an established uptrend, price often dips back toward a rising average before continuing. Rather than chase a high, wait for the dip and enter when the move resumes.

Indicators and settings

EMA 50 as the trend line, SMA 20 for the dip level, RSI 14 and ATR 14 for confirmation and stop distance.

Entry rule

Trend filter: the 50 EMA is rising and price has been above it. Wait for price to dip to or near the 20 SMA, then consider entering when a candle closes above the previous candle's high. RSI turning up from below 50 adds confirmation.

Exit rule

Target the previous swing high, or about 2 times your risk. Exit early if price closes clearly below the 50 EMA.

Stop-loss and risk rule

Stop below the pullback low, at least 1 × ATR away from entry. Risk 1% or less of the account.

Best conditions

Steady trends with shallow, orderly dips.

Pitfalls

Try it on the desk → Position-size calculator All strategies

Illustration only; ignores slippage, tax and most costs. Not financial advice.