Holy Grail by Linda Bradford Raschke — Strategy by uzair2join

By uzair2join

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Description

Holy Grail - Linda Raschke (v6)Trend-following pullback strategy inspired by Linda Bradford Raschke & Larry Connors' classic "Holy Grail" setup from Street Smarts: High Probability Short-Term Trading Strategies.Captures high-probability continuations in strong trends by entering on low-risk pullbacks to the 20-period EMA after ADX confirms trend strength.Overview:This open-source Pine v6 strategy implements the famous "Holy Grail" setup — ironically named for its elegant simplicity. It uses only two core indicators (14-period ADX + 20-period EMA/SMA) to identify strong trends and enter on the resumption after a pullback. Designed for swing and intraday trading on trending instruments like indices (DAX, Dow, NQ, ES), forex majors, or stocks.The strategy:Filters for strong, rising trends (ADX > 30 and increasing)Waits for price to touch the 20 MA during a retracementPlaces simulated stop-entry orders (buy above high / sell below low of the touch bar)Applies tight initial stops + ATR-based trailing to let winners runIncludes an additional exit when trend momentum fades (ADX threshold (default 30) and rising (ADX > ADX[1]) to confirm a strong trend — avoids choppy/range-bound conditions.Pullback Identification: In uptrends (close > MA), price retraces to touch the 20 MA (low ≤ MA). In downtrends (close < MA), price rallies to touch (high ≥ MA).Entry: Buy-stop above the high of the pullback bar (longs) or sell-stop below the low (shorts) — simulates breakout confirmation of trend resumption.Risk Management: Initial stop at the pullback bar's extreme (low for longs, high for shorts). Trailing stop activates using ATR multiplier.Exits: No fixed targets — trail profits + close position if ADX falls below a "weak" level (default 25), indicating potential trend exhaustion.This implementation adds modern touches: optional EMA vs SMA, ATR trailing, background trend coloring, and setup labels for easy visual confirmation.How to Use:Add to chart (works on any symbol/timeframe; best on trending ones like indices or forex).Look for green background + "HG L" label (long setup) or red background + "HG S" label (short setup).The strategy places orders on the next bar after a valid pullback — review backtest results in the Strategy Tester tab.Adjust inputs for your market/timeframe (e.g., lower ADX threshold on lower timeframes if needed).Important: This is not financial advice. Always backtest thoroughly, forward-test on demo, and use proper risk management (1-2% per trade max).Inputs:ADX Length (default 14)ADX Threshold (default 30) — must exceed and riseADX Exit Weak (default 25) — closes when trend fadesEMA Length (default 20)Use EMA instead of SMA (toggle)Trailing ATR Multiplier (default 2.5)ATR Length for trailing (default 14)Plots & Visuals:Orange 20 MA line"HG L" / "HG S" labels on setup barsGreen/red background tint during strong trend conditionsNotes & Limitations:Simulation Note: Pine Script cannot place persistent broker-style stop orders across bars; entries use limit ≈ stop-entry on the next bar (close approximation — many traders place manual stops in live trading).Prefers first pullback after ADX rise (highest probability); later pullbacks may work but are not filtered here.Performs best in trending, volatile conditions — avoid ranging/choppy markets (ADX filter helps).No pyramiding (one position at a time); no fixed R:R targets (focus on trailing winners).Backtest results vary by symbol/timeframe — optimize cautiously and avoid curve-fitting.Inspired by public domain rules from Street Smarts (1996) — this is an independent adaptation with Pine v6 improvements for clarity and flexibility.If you find this useful, consider liking/favoriting. Feedback welcome — happy to add alerts, fixed targets, or "first pullback only" logic in future updates!Original open-source release — feel free to study/modify.

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