From TradingView · · 1m 10s
A systematic reversal trade on Shopify stock
A trader shares a rules-based long setup on SHOP using RSI and volatility signals with a 4:1 reward-to-risk ratio.
In brief
A trader shares a rules-based long setup on SHOP using RSI and volatility signals with a 4:1 reward-to-risk ratio. This systematic reversal strategy entered SHOP long at $92.95 with a stop at $66.56 and target at $198.55 after RSI exited oversold and volatility exceeded 80. Originally reported by TradingView.
Rules over discretion
This trader doesn't rely on subjective chart reading. Instead, he built predefined setups into a strategy to make decisions systematic and repeatable.
“I am not a discretionary technical analyst, so I rely on predefined setups rather than subjective chart analysis.”
Two signals triggered the entry
RSI crossed above 30, exiting oversold territory. The NATR volatility oscillator hit 92.04, exceeding the required 80 threshold.
Perfect score met the threshold
Each signal contributed 0.5 points. The combined score of 1.0 matched the exact threshold needed to trigger a long bracket order on SHOP.
“The long setup score met the required threshold. The strategy therefore placed a long bracket order.”
4:1 reward to risk ratio
Entry at $92.95 with a stop at $66.56 (about 4x daily ATR below) and target at $198.55 (about 16x daily ATR above). The stop distance is $26.39.
Trade filled and now active
The setup candle closed on March 11, 2025. Two days later, price reached the trigger level and the long entry filled at $92.95.
“Assume the worst has already happened: the stop loss has been reached.”
The key point
This systematic reversal strategy entered SHOP long at $92.95 with a stop at $66.56 and target at $198.55 after RSI exited oversold and volatility exceeded 80.
