Today I made an interesting discovery. While playing around with trailing stops, I noticed that the Panic and Retracement strategy yielded ridiculous profit if a large trailing stop was put on. It appears that the strong retracement picked up by the strategy marks the start of a long trend, and having a rather large stop loss prevents the trade being wiped out early. The trailing stop nature of allows the trade to be closed when the trend finally reverses.
Putting a 300 pip trailing stop on the existing P&R strategy yielded a profit of $18,000 over the same period. Out of 13 trades, 8 were profitable. Average profit being $2500 while average loss only $440…. That’s crazy numbers… I’ll give it a go and see what happens.