Catalyst for Pullback (CPB)
A temporary reaction at a zone that causes a pullback within the trend — not a reversal, just a pause before continuation
A catalyst for pullback occurs when price reacts at a zone (supply in an uptrend, or demand in a downtrend) causing a temporary counter-direction move, but the overall trend direction resumes. Unlike a reversal which changes the structural direction, a CPB is a reaction that gets absorbed by the dominant trend. When supply gives a reaction in an uptrend, it may cause a brief pullback, but if demand holds below and the front leg structure remains intact (no structural break), the reaction was just a catalyst for pullback. This is important because traders often mistake pullbacks for reversals and either exit winning positions prematurely or take counter-trend trades that fail. The key distinction: if the front leg structure is intact after the reaction, it was a pullback — not a reversal.
✓How to Recognize
- •Price reacts at a zone (supply in uptrend, demand in downtrend) but overall structure holds
- •Front leg direction remains intact — no break of structural highs/lows that would signal reversal
- •Use CPBs as opportunities to enter continuations: wait for mid-TF realignment after the pullback
- •Often caused by old back leg zones that give a reaction but lack the strength to reverse the trend
⚡How to Avoid
- →Mistaking every reaction for a reversal and exiting winning positions
- →Taking counter-trend trades at CPB zones without checking front leg structure
- →Marking every supply/demand zone as a CPB — focus on the ones that actually cause visible reactions
- →Overcomplicating analysis by mapping every possible CPB from old structure