The next specific strategy is placing orders for both purchase and sale at once. This technique is mentioned in the book by Linda Raschke.
Some morning openings on the Moscow Exchange are accompanied by sharp price hikes either up or down in the first minutes of the opening, which allows you to work out the entire trading day for a few minutes at the beginning of the opening of the trading session. The implementation of the strategy in TRANSAQ software can be implemented as follows:
1. Buy 1 lot of the desired instrument at the current price so that we are in the deal, otherwise the stop loss orders will be reset.
2. We set a stop loss order for the purchase of the required number of lots slightly above the current price (usually by 1%) and a stop loss for sale slightly below the current price.
3. Waiting for one of them to trigger at the opening, we immediately set a stop loss to close the position under / above the order and move the stop for the price manually.
4. After closing the transaction, we remove all previously placed stops.
Let’s show examples.
Figure 238 shows price jumps at the opening of the USDRUB_TOM pair. Figure 239 shows the morning explosive jumps in the price of Gazprom JSC shares.
Fig.238. USDRUB_TOM, hourly chart. The blue highlight shows the opening of trading sessions in the first hour of trading.
Fig.239. Gazprom JSC action. The blue highlight shows the opening of trading sessions in the first hour of trading.
The main task in the described strategy is to act very quickly, because price throws can also unexpectedly change their direction.