Historical-High Pullback Strategy with Percentage Entry and Exit Levels

Summary

This trend-following approach tracks an asset’s highest price and sets entry and exit thresholds as percentages of that peak. It describes buying when the close falls below 80% of the tracked high and closing the position when the close rises above 99%. The document also identifies 90% and 70% reference levels, though these are not used in the shown entry and exit rules.

The discussion presents the method as a way to enter after a pullback within a longer-term uptrend, and suggests adding fundamental filters, market context, or alternative stop methods. It provides no performance results or empirical evidence for the claimed risk-reward benefits. The accompanying code initializes the running high from the available chart history; despite mentioning a six-year lookback parameter, it does not use that parameter to limit the calculation. The strategy can therefore buy during a continuing decline, and its rules do not establish that the 99% threshold functions as a conventional stop loss.

Key ideas

• The strategy tracks the highest price and derives percentage-based levels from it.
• A long entry is triggered below 80% of the tracked high, and a close is triggered above 99%.
• The 90% and 70% levels are plotted but are not part of the displayed trade conditions.
• The document gives no backtest performance evidence for its claims about risk and returns.
• The described rules can enter during a decline and do not include fundamental or broader market filters.

Tags

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