Dollar-Based Stops and Targets from Position Size and Contract Value

Summary

This strategy converts dollar-denominated stop-loss and take-profit inputs into price distances using position size, contract point value, and minimum tick size. It enters long when a 14-period simple moving average crosses above a 28-period average, and short on the reverse cross, then applies the calculated distances to exits. Plotted levels show the resulting stop and target for debugging.

The document explains that dollar-based settings make intended trade risk easier to express, while the resulting price distance depends on the instrument and position size. Its example illustrates the conversion for a stated position and tick value. It also cautions that wide stops can leave trades exposed to reversals, tight targets may be difficult to reach, and high-value contracts can translate a dollar stop into a very narrow price buffer. No performance results are reported; the brief backtest configuration alone does not establish profitability.

Key ideas

• Dollar inputs are converted into tick distances using position size and contract point value.
• The strategy uses a 14/28 simple moving average crossover to choose long or short entries.
• Exit levels are plotted alongside the average entry price for visual inspection.
• Stop and target distances need to account for instrument tick value and market volatility.
• The document provides no backtest performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.