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Mechanical stops should be in place to protect trading capital, in
case suitable trade exits fail.
Trailing stops should be viewed as a safety net when system exits
fail, and not used as (unsuitable) trade exits.
In my experience, if trailing stops are being hit more than 20~30% of
the time, then exits are either insufficient, unsuitable or non-
existing.
Replacing suitable exits (to cater for market conditions) with plain
stops or trailing stops, guarantees that trades are exited during the
worst period, when prices are moving fast against the trader, and
slippage increases.
jose '-)
--- In equismetastock@xxxxxxxxxxxxxxx, "rvalue1" <rvalue1@xxxx> wrote:
>
>
> In the past I have done backtesting with various stops as a % of the
> price. Most all the time, I have found that unless you have a wide
> stop like 10% or more, mechanical trading systems reap less profit
> with a stop, as you get stopped out too often, versus letting the
> signals stop you out with a market open trade next day.. I have not
> backtested with trailing stops as a perecentage. People - would you
> care to comment on your experience and use of stops in real trading
> vs testing?
>
> Thanks,
>
> --- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx
> wrote:
>
> Read the reference to the money management article I posted. Apply
> the money management code to any chart as an indicator. Read the
> number of shares off of it when you are ready to make an entry and
> it calculates the number of shares you should purchase based on your
> risk profile and the ATR of the stock.
>
> Once you have the number of shares to buy, determine how much
> downside risk you're willing to take on the trade. Divide the
> shares into the total amount you're willing to lose and that's your
> stop price.
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, "Martin Blain" <martin@xxxx>
> wrote:
> S
> Thank you once again for some great code.
> My token of appreciation. Not sure how to play it but will have a
> go.
>
> ((Security("X.NASD-A",MACD()))>1)
>
> I lay this an indictor over the x.nasd-a or US stocks (not CDN
> stocks as out holidays are different)
> Take new long positions when up.
> I play this in combination to your SPY code
>
> Martin Blain
> Burlington Ontario
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