Shock Retrace

$50.00

We have all seen it – some shocking news comes out and the price crashes or soars in a panic response to the news, only to retrace back soon after. MooMooForex’s Shock and Retrace Strategy was created to take advantage of these extreme movements.

Description

We have all seen it – some shocking news comes out and the price crashes or soars in a panic response to the news, only to retrace back soon after.

MooMooForex’s Shock and Retrace Strategy was created to take advantage of these extreme movements. When the instrument price has moved past the configured threshold, for example 5%, a retracement is expected and a trading signal in the reverse direction of the move is generated.

With an extensive set of configuration, the Shock and Retrace Strategy can be configured to run against almost any instrument, and the user can tune it, enable and disable trading, send email alerts and more! Just see the list of available parameters below to understand the functionality available.

The Shock and Retrace Strategy also comes complete with the following special features:
– Price change thresholds can be specified in percentage, pips, or standard deviations.
– Can be configured to wait for one retracement bar to appear before generating a trade signal.
– Enhanced with “Smart Stop” which sets the stop order to be based off the price before the retracement bar instead of the entry price.
– Stops and Limits orders are set on the trades immediately – no hidden logic inside the strategy meaning you can stop the strategy, and doesn’t interfere with other positions.
– Enhanced email notification on signal indicating all trade inputs including calculated stop and limit values if applicable.

* The calculation of price changes is done using MooMooForex’s Price Delta indicator.

Inputs

  • Units – Units to measure the price change in (Percent, Pips, Standard Deviations). Default value is pips.
  • Bars – The number of bars that must be checked to calculate the change in price. Default value is 1.
  • StdDev Range – The range to use to calculate the standard deviation (used when Units is set to Standard Deviations). Default value is 48.
  • Consecutive Bars – Only tally back the bars that are going in the same direction as the most recent bar until an opposite bar is reached. The default value is Yes.
  • Change Threshold – The amount the price has to move by in the specified units. The default value is 120.
  • Wait for Reversal – Should we wait for one bar to close in the reverse direction before executing? The default value is Yes.
  • Timeframe – The timeframe to run the strategy on. The default value is H1.
  • Allow Buy Trades – Allow long trades. The default value is Yes.
  • Allow Sell Trades – Allow short trades. The default value is Yes.
  • Allow Multiple Positions – Allow the opening of multiple positions simultaneously. The default value is No.
  • Limit Type – Specify the limit order should be off, or on and specified in pips, or as a percentage of the change in price, or Risk Reward. Risk Reward Multiplier calculates the limit by multiplying the Stop Order in pips. The default value is Percent.
  • Limit – The limit value in the unit of Limit Type selected. The default value is 50.
  • Stop Type – Should the stop order be off, or on, or Smart Stop (Stop is on and based from the start of the reversal not the entry price). The default value is Smart Stop.
  • Stop in pips – Specify the stop to use in pips. If the Stop Type is set to Smart Stop, the actual stop used may exceed this value. The default value is 50.
  • Trailing stop – Enable or disable the Trailing stop feature. Default value is No.

Buying Logic

  • Buys when the price has dropped by the configured change threshold in the last ‘n’ bars, either consecutively or not consecutively, as specified by the configuration.
  • If Wait For Reversal is on, the strategy will wait for one reversal bar to close before generate a trade signal.
  • The strategy will not open two positions simultaneously if Allow Multiple is not enabled.

Selling Logic

  • Sells when the price has risen by the configured change threshold in the last ‘n’ bars, either consecutively or not consecutively, as specified by the configuration.
  • If Wait For Reversal is on, the strategy will wait for one reversal bar to close before generate a trade signal.
  • The strategy will not open two positions simultaneously if Allow Multiple is not enabled.

Exit Logic

  • Stops: A stop order is set, if configured to do so as per the specified configuration.
  • Limits: A limit order is set, if configured to do so, as per the specified configuration.

Example Use

  • Units: Pips
  • Bars: 1
  • Consecutive Bars: Yes
  • Change Threshold: 120
  • Wait For Reversal: Yes
Shock_Retrace

Shock Retrace Backtesting AUDJPY.H1 Feb 2013. Two big moves, both retraced as expected.

Further Reading

This strategy was developed exclusively by MooMooForex. Additional reading may be found inside the Research blog.