Trend Entries and Profit Targets Based on Price Retracements

Summary

This document presents a long-only trend-following approach that looks for a percentage decline from a recent high, then exits at a percentage gain from entry. The prose describes finding the highest high over 90 bars, entering after a 3% pullback, and taking profit at 6% above entry. It says the approach aims to avoid some noisy entries by waiting for a retracement, but it uses no stop loss.

There is a material mismatch between that description and the supplied strategy logic: the code uses the take-profit percentage in its entry threshold rather than the retracement parameter, and the stated stop behavior is not demonstrated by the shown exit rule. The document offers no reported performance results; the backtest settings identify BTC/USDT futures and a historical test window but give no outcome data. It warns that retracement settings affect trade opportunities, that missing stop protection can expose a position to large losses, and that parameter tuning can overfit.

Key ideas

• The prose describes entering long after price retreats a set percentage from a recent high.
• The stated example uses a 90-bar high, a 3% retracement, and a 6% profit target.
• The strategy description specifies no stop loss, leaving positions exposed to adverse reversals.
• The supplied entry logic appears to use the take-profit parameter instead of the retracement parameter.
• No backtest performance results are reported, so the proposed method's effectiveness is not established.

Tags

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