Ignoring active stops and limits until

Posted By black Monday, January 03, 2011
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black
 Posted Monday, January 03, 2011
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In well over half of the trades my Strategies make, both testing and live, if I allow my trades to run until the end of the period when a Stop or Limit signals a close, my profits are better.

What this means is, imagine that you had an open trade:
Buy OpenRate = 1.3000
Stop = 50
Limit = 25

In the middle of the period sometime, the trade reaches 1.3025 where the Limit should close it for a profit. If I allow the trade to run until the end of the period and then close it, the profit is often more than it would have been if I closed it right at the time it reached the Limit. Often the losses are larger as well, if I don't close the trade right when the Stop is reached.

But, in the long run my profits are greater doing it this way rather than closing the trades right when the Stop or Limit are reached.

Smile
Monday, January 03, 2011 by black
eMoe
 Posted Wednesday, January 05, 2011
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Hi, Black!

I think that the risk is higher than size of the profit. That's my opinion. If you combine manual and auto trading your idea is absolutely right, but what about only autotrading mode? For example, when I start the strategy and go to work, I can get a huge lose if I don't preset Stop (Trailing Stop is better) and even Limit. Am I right?


Best regards!
black
 Posted Wednesday, January 05, 2011
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eMoe (1/5/2011)
Hi, Black!

I think that the risk is higher than size of the profit. That's my opinion. If you combine manual and auto trading your idea is absolutely right, but what about only autotrading mode? For example, when I start the strategy and go to work, I can get a huge lose if I don't preset Stop (Trailing Stop is better) and even Limit. Am I right?


It all depends on the Strategy and the settings.

Often, when you have a Stop set at 20, the price will will go past the Stop and reverse itself for a profit at the end of the period. The same holds true for the Limit. If you have a Limit of 20, the price will often close well beyond the 20 for a bigger Profit. However, it does work the other way as well. It all depends on the kind of Strategy, the settings, and Market conditions.

If a Trader doesn't have the money to test live, and he doesn't trust a Demo or the Tester, he can still test Live without money. How? Make a test Strategy that is exactly the same as the one that will run Live. The only difference is to replace the "Create Orders" commands and the "Create Entry Orders" commands and the "Close Trades" commands with "Log Info" commands that will show what the Strategy would have done if it had been actually placing and closing orders. Then run it. Run it just the same way it would be run if it were running Live. The result is Log entries, rather than actual trades... log entries that show what would have happened Live.

Remember that, because of split second activities on the Market, if you run 2 Live Strategies that are exactly the same, and that are running exactly at the same time, you will often get slightly different Profits or Losses. No 2 Live Strategies will produce exactly the same results all the time. In the same way, no Strategy test will ever produce exactly the same results as a Live run.

Smile
eMoe
 Posted Monday, January 10, 2011
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You are right, Black.

I've noticed that 2 similar strategies give different results not because they are running differently. It happens because one strategy operates with all orders and positions opened by both strategies, according to its logic. So we will never get the same results.


Best regards!

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