Elastic & Re-Entry Orders

Overview

Elastic Orders are self-adjusting orders that dynamically modify their parameters in response to changing market conditions. While standard orders are static, Elastic Orders breathe with the market — tightening when volatility contracts and widening when it expands.

Elastic Orders

How They Work

An Elastic Order monitors one or more market variables and adjusts its parameters in real-time:

• Elastic Stops — Stop-loss distance expands and contracts with ATR (Average True Range)
• Elastic Limits — Limit price adjusts based on bid-ask spread dynamics
• Elastic Sizing — Position size scales inversely with volatility
• Elastic Targets — Take-profit levels adjust based on momentum strength

The key insight is that static parameters are often wrong — a stop that's appropriate in low volatility gets hit by noise in high volatility, and a target that's reasonable in a trending market is too ambitious in a range.

Configuration

• Anchor variable — What the order adjusts to (ATR, spread, volume, volatility)
• Elasticity — How responsive the adjustment is (1x = linear, 2x = double sensitivity)
• Bounds — Minimum and maximum values for the adjustable parameter
• Update frequency — How often parameters recalculate

Re-Entry Orders

How They Work

Re-Entry Orders automatically re-establish a position after it's been stopped out, if conditions still warrant the trade. This prevents the common frustration of getting stopped out by a wick only to watch the market continue in your direction.

Re-Entry Logic

A Re-Entry Order activates when:

1. The original position was stopped out
2. The market returns to a favorable re-entry zone
3. The original thesis (regime, signals) remains intact
4. Risk limits still allow the position

Configuration

• Max re-entries — How many times the order can re-enter (prevents infinite loops)
• Cooldown period — Minimum time between stop-out and re-entry
• Re-entry zone — Price range where re-entry is acceptable
• Thesis validation — Conditions that must still be true for re-entry
• Size adjustment — Whether re-entry size is the same or reduced

Agent Integration

Koda uses Elastic Orders by default for many strategy executions, ensuring that position parameters stay appropriate even as volatility shifts. Riven can specify elastic parameters when designing strategies, and Brix monitors elastic adjustments to ensure they stay within risk limits.