"Loop order"

[nico3725]

Hello

Has anybody the exact complete definition of a "Loop order".


Many thanks for your help.

[nico3725]

Loop Order

A Loop Order is a perpetual or repeating order placed in anticipation of a cyclical movement in the market. It is a p of matching orders where the first leg is active the second dormant. When the desired price is reached for the active order it is executed the dormant order becomes active a new order (a copy of the one just executed) is created in a dormant state. This process repeats until the order is explicitly cancelled.

Normally both legs of a Loop Order are Limit orders they always are for the same amount.

For example if a trader expects the rate of an instrument to fluctuate between two levels (range trading) a Loop Order placed just inside the limits of the fluctuations will produce repeated good results.

[Rachamim]

Nicholas

This is an interesting concept. It occurred to me some time back although I have not so far had chance to test it out that for a p such as EUR/CHF which travels in a fly straight line the sort of system you mention (if I underst it correctly) could be used.

There is a fly constant range high-low of 10/12 pips it should be possible to keep reversing (on the 5 min chart say) every few bars to obtain after spread 6/7 pips assuming one's trading platform were sufficiently responsive. In a 3/4 hours it looks possible to achieve 70/80 pips per unit.

Is this the sort of thing loop trading envisages?
How would one apply it to other ps where the degree of fluctuation is greater?

Thanks

John

[Rachamim]

Nicolas

Sorry I spelled your name incorrectly in my last post!

John