Depth alone is not an entry. Wait for one of these to fire with the signal still valid.
Technical
Candle close
Hammer long lower wick at support.
Engulfing green takes prior red.
Rule wait for the close — not the wick.
Volume
Expansion day
Setup volume dries on the dip.
Trigger ~2× average on the reversal bar.
Edge accumulation becomes visible.
Momentum
RSI divergence
Setup price lower low, RSI higher low.
Entry RSI turns up with price confirmation.
Best in intact uptrends only.
Structure
Break of structure
Setup series of lower highs on the dip.
Trigger reclaim of the last lower high.
Need volume expansion on the break.
Flow
Hidden bids
Tool level 2 / order flow if you have it.
Signal large bids step up at support.
Confirm price rejects, does not slice through.
Relative
Sector leadership
Compare AAPL vs XLK / QQQ.
Signal AAPL holds while indices flat/soft.
Logic quality rotation into leaders.
05 Risk
Position rules
Protect capital with fixed parameters before you click.
Initial size
25–50%
Of intended full position on first print
Stop
1–2%
Below the support that defined the pullback
Add
On confirm
Higher lows or resistance breaks with volume
Take profit
Prior high
Partial there; trail runners for extension
Invalidation: If the pullback violates key support on expanding volume, the pattern is done. Exit — do not average into a breakdown.
06 Mistakes
Common failure modes
01Falling knives — price down is not a setup. Wait for reversal structure.
02Ignoring volume — heavy volume on the dip often means distribution.
03Fighting the major trend — only trade pullbacks with the primary direction.
04Early entry — enter on close confirmation, not mid-wick hope.
05No risk budget — keep single-trade risk small and predefined.
06No exit plan — targets and stop exist before the fill.
Field note
The best pullback entries often feel uncomfortable. When the tape is fearful at support and structure is still intact, that is frequently the window the Algo is built around.