Trendline, Pullbacks, ADX/DMI Strategy

Learn a trend following strategy using trendlines and pullbacks with ADX/DMI confirmation for entry. Applicable across all timeframes and markets.

Published · Updated · Methodology: Technical Indicators

Part of: ADX / Trend Strength

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Every time frame
  • Markets: Not specified (implied for stocks, mutual funds, IRA)

Indicators used

  • Trendline
  • ADX/DMI
  • Price Channel
  • Pivots

Source video

Decoded from: Stocks & Commodities V. 27:2 (60-62): Entering Trades At Pullbacks by Candy Schaap by fidelity.com — watch the original

Strategy overview

Entering at pullbacks means waiting for an established trend to pause and taking the retracement rather than chasing the move that created it. What distinguishes this entry is its source and the toolkit assembled around that idea: a Stocks & Commodities piece — V. 27:2, pages 60-62, credited to Candy Schaap — redistributed through Fidelity's learning library, combining trendlines drawn off pivot points, a price channel framing the swing from support to resistance and back, and ADX/DMI carried alongside as corroborating evidence rather than as the trigger.

The medium shapes the method. This is prose from a print magazine, not a chart walkthrough or a script, and the geometry it describes is drawn by hand: a trendline needs at least two pivot points, and which two you connect is precisely where two traders reading the same page end up with different lines. The channel inherits that subjectivity, since it is built parallel to a line someone already chose to draw. That is why this family of approaches travels well as writing and awkwardly as code — the discretion sits in the construction, before any entry condition is ever evaluated.

The supporting role given to ADX/DMI is the interesting part, because pullback entries have a built-in awkwardness: you are acting while price moves against the trend, exactly when a smoothed directional reading is least flattering. The article's stated concern is avoiding 'feints' — distinguishing a pause from a genuine turn — which is a job for a measure of trend strength independent of the current bar. The source also presents the approach as time-frame agnostic, a claim characteristic of hand-drawn chart craft and one that leaves the verification work with the reader. No machine-readable rule set has been extracted for this entry, so this page covers the concept and its provenance rather than a mechanical breakdown.

Topics

pine script · trading strategy · tradingview strategy · trendline strategy · adx dmi strategy · pullback trading · technical indicators · price action · swing trading · day trading strategy · multi timeframe strategy · stocks trading strategy · futures trading strategy

Frequently asked questions

What is a pullback entry in a trend-following strategy?

A pullback entry waits for an existing trend to retrace part of its move and enters in the trend's direction during that pause, instead of entering on the initial breakout. The appeal is a better entry price and a nearby reference level for risk; the difficulty is telling a temporary pause apart from the start of a reversal.

Why combine trendlines and pivots with ADX/DMI?

They answer different questions. Trendlines and pivots are geometry — they mark where a trend has held and where a retracement might end. ADX/DMI is arithmetic: DMI compares upward and downward directional movement, while ADX measures how strong the directional movement is regardless of side. Used together, the drawn levels propose an entry and the indicator supplies independent evidence that the trend behind it is still intact.

Where does this strategy come from?

It comes from an article in Technical Analysis of Stocks & Commodities, volume 27 issue 2, pages 60-62, credited to Candy Schaap, made available through fidelity.com. It is written source material rather than a video tutorial, which is why the description centers on the concept and its construction.

Does a trendline pullback method really work on any time frame?

The source frames it as applicable across time frames, which is common for hand-drawn chart methods because the geometry can be constructed at any scale. Whether the edge survives at a given scale is an empirical question the reader has to settle. Strategy Decoder catalogs strategies like this one alongside their original sources so you can locate the material and test the concept yourself on TradingView.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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