Open-to-Open Directional Entries with a Trailing Stop

Summary

This simple rule takes a long position when the current bar opens above the previous bar's open and a short position when it opens below it. The script uses a trailing exit and configures orders at a percentage of equity, with commission included in its stated backtest setup. The author describes using it on a daily BTCUSDT chart and claims an unusually large historical return, but the document gives no detailed report to support or explain that result.

The discussion itself raises a material implementation concern: commenters report that the trailing stop behaves unexpectedly, and the author acknowledges the built-in trail may fail and may need to be programmed differently. The stated trailing distance is in pips, which may also be unsuitable or ambiguous across instruments. The reported return should not be treated as evidence of a viable strategy without checking order behavior, costs, instrument settings, and out-of-sample results.

Key ideas

• The strategy goes long or short according to whether the current open is above or below the prior open.
• A trailing stop is intended to close positions.
• The setup uses a percentage-of-equity order size and includes commission in the stated configuration.
• Commenters and the author identify concerns about the trailing-stop behavior.
• The claimed backtest return is not accompanied by enough evidence to validate it.

Tags

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