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Hi nikku,
Wednesday, December 8, 2004, 4:41:37 AM, you wrote:
n> As usual... thanks so much - this is what I was looking for! I was
n> trying to figure out how to call my own custom stops but I didn't'
n> realize that I could do it using the Applystops function and then in the
n> third field enter the name of my custom stop. That is a huge help. I
n> will be able to try this after 10:00 pm tonight.
n> Having heard Yuki's take on trailing 'percent of profit' stops and then
n> seeing that there aren't a flood of responses providing different
n> generic code for stops such as these, I am forced to consider the
n> possibility that many people don't use these types of stops in their
n> systems. Which is a bit of a surprise....if not these, then what?
n> Take care and thanks again
n> Nikku
My take is that, in many cases, you'll end up with worse statistics
and performance than you would just exiting. But it's not cast in
stone of course, and there are a *ton* of variables on exactly how
one would set up such a stop. Most people set them way too tight,
IMO, and get stopped out just about at the point they should be
thinking about adding to the position. That need not happen of
course. I think there are 3 stops worth consideration: (briefly)
1) initial stop loss -- has to be wide enough to handle noise, and
position size has to be determined with this and gastrointestinal
capabilities in mind -- it's a 'things did not go well' stop
2) break even stop -- I am generally opposed to any position going
into a profit such that I might actually consider taking, and then
subsequently going into the red
3) 'the run is done' stop -- signal(s) that the move I'm playing is
over, and there is more risk than reward left (basic exit when things
have gone well, and would be based on some technical signal, which
could even be simply time)
Note, I have ignored percentage of profit completely. I think it
makes people feel good in the short run, but often cheats them in the
long run. If I have a winner by the throat, I don't want to be taken
out because I'm scared of giving up profit. If that (giving up
profit) dovetails with a signal, then of course get out. But just
based on protecting profits? No, I want to hold in that case, and
maybe even add.
I think you'll find most people here will report that performance of
their best systems degrade with the use of *any* stops. Not all of
course, but I suspect most. I've seen the comment again and again,
and it's my own experience as well.
Yuki
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