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Herman
I have been where you are now. I have learned so much since then. MA
Crossovers are not the best system.
To move beyond, it is important to develop an entire trading system. "Trade
Your Way to Financial Freedom" is great on this subject. It is by Van or Von
Tharpe.
A complete system includes many facets including:
1) Picking what to trade.
2) Timing.
3) Determining the type of market including up trend, down trend, or trading
range. The market only trends 20% of the time.
4) Multiple Entry Points based on above.
5) Multiple Exit Points based on above.
6) Position sizing.
The parameters will vary depending on what is being traded from the least
volatile to the most volatile. In order these would be: major market
indexes, ETF's, individual stocks with high volatility. The highest profits
are in the last group.
On your question of stops or exit points there are many including entry,
fixed loss stop, trailing loss stop, profit stop, and inactivity exit. Each
of these has variations.
I highly suggest you read VanTharp and the material on ATR. The problem with
% is that it does not take into account the stocks volatility, ATR does.
If the stock is in a trend on a daily basis you may not wish to exit it
based the same stops when the stock is in a trading range.
We have so much to talk about and I am very tired now. Please let me know
if any of this makes sense to you and what specific questions you have.
time for bed, neo
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Herman van den Bergen
Sent: Tuesday, April 17, 2001 9:13 PM
To: metastock@xxxxxxxxxxxxx
Subject: A problem with Stops
I have a problem with stops - any helpful comments would be appreciated.
When testing EOD systems, I want to use stops to simulate stop orders,
i.e., I want the position immediately (not the next day) closed at the stop
price.
Setup (MS Pro 7.0): In the "Stops" window I select Max Loss, Long, Short,
Percent, Exit at Stop Price, and set a loss limit, i.e., 8%. My system is a
modified two moving average system, I use "greater than" and "smaller than"
instead of cross() in an attempt to keep me in the market but it doesn't
work - see below.
When a Stop takes place my position stays closed until they reverse. For
example: I am stopped out of a Long position and even though I would like
to re-start the Long position the next day (thus only limit the losses for
the day) I have to wait for the next Short position to get back in the
market and that could be weeks away.
How can I simulate stops that only limit losses for the day but keep me in
the market by resuming the same position the next day?
Thanks for any help you can give,
Herman.
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