From trading ideas to implementation – another sample strategy using limit and stop orders

Let’s consider a practical application of the limit and stop orders that we have just implemented. I like using this example because it illustrates the importance of having a trading idea before writing the code and shows that trading ideas do not have to be complex. In practice, the simpler the trading idea, the greater the chance that it will work in production.

As you may remember from Chapter 3, FX Market Overview from a Developer’s Standpoint, most FX markets undergo a bank settlement procedure, which happens at 5 p.m. New York time. The price at the settlement is very important because it’s used to evaluate many other financial instruments and is used for settlement in all cash trades between any parties. So, comparing an intraday price to the last settlement price may give us an idea about the overall sentiment in this market: if it’s greater than...