Assembling components

So far, we have seen that a trend pullback strategy consists of three components: a trend, a pullback, and a final movement in the direction of the trend. We have also seen that each of the three components can be written with different algorithms. It’s a bit like having building blocks to assemble together, bearing in mind that any component has its specific purpose.

In Table 6.1, you can see nine different combinations regarding the first two main components – trend and pullback:

Algorithms to detect trends	Algorithms to detect pullbacks
	Simple Moving Average (SMA)	Relative Strength Index (RSI)	Stochastic Oscillator
Simple Moving Average (SMA)	SMA trend + pullback below an SMA	SMA + RSI oversold...