Entries/Exits

Entry signals are given when price tests breakout to the upside or downside for the “Breakout” strategy type, or for the “Cheap” strategy type, when price retraces to the level it brokeout from!.

This means all entries are executed as market orders at the close of a candlestick. However, for discretionary traders, you can certainly utilize limit orders for entries.

In the image above a long position is entered when price breaks out from the identified breakout price point. You can see a “Break Up” label printed and a small green label signaling the execution of a long entry order.

To the right of the chart, a small blue label is printed, indicating that the long position has been closed.

All trade exits for Impulse IQ use stop-loss orders.

Impulse IQ does not implement a predetermined profit target. Instead, Impulse IQ initially uses a fixed stop-loss that is ATR based. If price immediately moves against the position and tests the fixed stop-loss the position will close immediately as a stop-loss order.

If price moves in favor of the position, a trailing stop target is used. This means that when price sufficiently moves in favor of the position, the initial fixed stop will convert to a trailing stop and trail the position. Impulse IQ self-learns and optimizes the fixed stop and trailing stop that it uses, so there’s no need for you to manually change these settings!

A trailing stop is used for Impulse IQ because it operates as a breakout strategy. Ideally, Impulse IQ will enter a price breakout, and they breakout will continue for an extended period! When the trend ends and price moves against the position, Impulse IQ will ideally “stop out” at a great price!

The image above shows a short positions entered and exited using the “Cheap” strategy!

Tip
Impulse IQ uses a fixed stop loss when first entering a position. A price target is then calculated that, when achieved, will activate a trailing stop loss, and remove the initial fixed stop loss. Ideally, during this stage, price will continue to trend for an extended period before testing the trailing stop!