When using a Cut and Reverse approach to trading, generally we want to be able to set a larger number of contracts to remain after the reversal (when the Stop is hit).
For example, on the ES I would set an ATM position with 3 contracts with both the Target and Stop located 3 ticks away. If the Stop is hit, I would like the Reverse position placed with a net number of contracts of 6 (thus the Stop would be 9 contracts before the reversal, netting 6 contracts after the reversal); and the Target set to 6 contracts (as well as the new Stop).
Adding this capability to the ATM will allow traders to effectively trade the Cut and Reverse approach taught in leading Prop shops and help turn a losing trade into a winner.
Can this be added to the ATM? A flexible approach would be to set the number of additional contracts (or multiple) over the current position, so that multiple reversals could be accommodated.
Comment