Two-legged pullback

1. What is two-legged pullback indicator?

   The Two-Legged Pullback Indicator is a tool that detects pullback trade setups, specifically two-legged pullbacks, with high accuracy. This setup is based on temporary market corrections within an ongoing trend, offering a strategic entry point after a two-step correction. It leverages price action to validate pullbacks against the prevailing trend and uses moving averages to determine the trend direction, aiming to provide precise entry and exit points. This approach is designed to reduce risk and increase the reliability of trades by capitalizing on the trend's continuation after a correction​.

Here are some key points about the Two-Legged Pullback Indicator:

• Two-Legged Pullback: It focuses on pullbacks that unfold in a two-leg manner. The first leg represents a price retracement, followed by an internal pullback that does not erase the first leg, then the second leg is another retracement in the same direction with the first leg.
• Retracement Level: The indicator allows customization of the retracement level for the second leg. This means you can specify the maximum difference between the retracement levels of the first leg and the second leg to trigger an alert.

2. Indicator settings: 

• First Leg Consecutive Candles Count: the number of consecutive candles moving in the same direction that constitute the first leg of a pullback in a two-legged pullback setup.
• First Pullback Consecutive Candles Count: a specific parameter that defines how many consecutive candles in the opposite direction of the main trend are considered to make up the first pullback.
• Second Leg Consecutive Candles Count: the parameter used to identify the number of consecutive candles that define the second leg of a pullback in a two-legged pullback trading setup. 
• Max Difference in Percents Between Legs: the parameter designed to control the allowable percentage difference in the size or length of the two pullback legs. 
• The trend filter's fast MA period: a specific value that determines the responsiveness of the fast-moving average component of the trend filter. 
• The trend filter's fast MA method: specifies the algorithm used to calculate the fast-moving average, which helps in identifying the current trend direction more effectively. 
• Trend Filter's Fast MA Price: the price input used for calculating the fast-moving average in the trend filter.
• Trend Filter's Slow MA Period: the timeframe over which the slow-moving average is calculated.
• Trend Filter's Slow MA Method: the computational approach used to calculate the slow-moving average. 
• Trend Filter's Slow MA Price: specifies the price component (e.g., close, open, high, low) used to calculate the slow-moving average.

SL & TP

• ATR period for SL shift: the timeframe used to calculate the Average True Range for adjusting stop loss levels.
• SL shift coefficient: a multiplier used with the ATR value to adjust stop loss levels according to market volatility.
• TP coefficient (from SL): a multiplier determining the Take Profit level relative to the Stop Loss distance.

STYLING

• Bullish pattern color: Choose a color for bullish pattern
• Bearish pattern color: Choose a color for bearish pattern
• Bullish arrow color: Choose a color for the bullish arrow 
• Bearish arrow color: Choose a color for the bearish arrow
• Up/Down Arrow Size: Adjust the size of the arrows on the chart for better visibility.
• Display TP/SL on Chart: Toggles the visibility of the suggested take profit and stop loss levels directly on the chart.
• TP Color: Sets the color for the take profit level line.
• SL Color: Sets the color for the stop loss level line.
• Max Bars to Calculate: Set the maximum number of bars the indicator should use for its calculations.

3. How can I set up alerts? 

To stay updated on potential trading opportunities, you can set up alerts within the two-legged pullback.

Step 1: From the indicator settings, customize your alerts by defining your desired parameters. The selected configurations will be used for notifications in Step 2

Step 2: To receive notifications through the app, pop-ups, alert emails, Webhook URL, sound alerts, or email-to-SMS, enable these features by clicking on TradingView's “Alert” icon.

Step 3: Select the two-legged pullback from the “Condition” dropdown list:

Step 4: A pop-up will appear as follows. You click on “Notifications”.

Step 5: You choose the types of notifications you'd like to receive and click the “Create” button.