The Holy Grail

Holy Grail – Trend Pullback Framework

The Holy Grail indicator is inspired by the pullback method described by Larry Connors and Linda Raschke in the book Street Smarts.

The indicator is designed to identify structured pullbacks inside an established trend.

It combines three common elements used in trend-following approaches:

• Trend definition with moving averages
  
• Trend strength with ADX
  
• Pullback confirmation using price action
  

The objective is not to predict turning points. The indicator highlights moments where price retraces inside a dominant trend.

Trend structure

The trend is defined using two exponential moving averages:

• EMA 20 – short-term pullback reference
  
• EMA 50 – structural trend reference
  

When EMA 20 is above EMA 50 the environment is considered bullish.

When EMA 20 is below EMA 50 the environment is considered bearish.

A visual cloud between the two averages helps identify the dominant regime.

Trend strength filter (ADX)

An optional ADX filter can be enabled.

When active, signals are considered valid only if ADX is above the selected threshold. This helps avoid signals during weak or sideways conditions.

The chart background highlights periods where the ADX condition is satisfied.

Pullback detection

A setup appears when price retraces toward the fast average.

Bullish setup

• EMA 20 above EMA 50
  
• Price retraces toward EMA 20
  
• Price remains above EMA 50
  

Bearish setup

• EMA 20 below EMA 50
  
• Price retraces toward EMA 20
  
• Price remains below EMA 50
  

These conditions are marked with small circular markers.

Circles indicate a setup candle. The setup represents the pullback bar that meets the method conditions.

Triangles indicate the trigger candle, meaning price has broken the high or the low of the setup candle.

Entry trigger

The entry occurs on the next candle if price breaks the high or low of the setup candle.

• Bullish entry: price breaks the previous candle high
  
• Bearish entry: price breaks the previous candle low
  

Triangles mark the trigger signals.

Williams Fractals

Optional Williams fractals highlight recent swing highs and lows.

These levels can help identify:

• Potential stop locations
  
• Recent structural pivots
  
• Nearby breakout levels
  

Important notes

This indicator highlights structural market conditions, not guaranteed outcomes.

Trend strategies work best during directional markets. Sideways periods can produce noise and false signals.

The tool is designed to provide a consistent framework for identifying pullbacks inside trends.

Users should combine the signals with their own risk management and execution rules.