|
PureBytes Links
Trading Reference Links
|
>Hi,
>
>I hope that somebody can enlight me on the following two issues:
>
>1. What is the difference between the 'Close' and 'Settle' price?
> How is 'Close' price actually arrived at?
I'll enjoy answering this one. If you have a system that generates a buy on
close. And that close was the Friday of Super Bowl Sunday and you had a
Bond model that gave you a buy on that close you would have learned what I
have learned about all of this. I knew that I was getting close to a buy on
the bonds that Friday and I did some calculations and I was definitely going
to get a buy on the close of the bonds. So just prior to the close of the
bonds I went in and got long. Sure enough when the bonds closed Friday I
did get a buy arrow that poped up just as predicted. So the other markets
closed and we all went home for the weekend. Weekend over they notice the
power had gone off in the building, they called me, I decided to stay home
that day. They said hey the buy arrow on the bonds is missing on the Ned
Davis system and the TS. I said no way, I still have mine. Now this
wouldn't have been so important but the bonds had crashed and we were in a
world of hurt. So I rolled out of bed and crawled to my trading room and
there I had a multitude of monitors all showing buy arrow still there from
the previous Friday close. With me so far? OK I'm telling them at work
your nuts and your all kidding me, they claim no. So I noticed that the
bonds had settled lower than they had closed buy I think two ticks. I got
to thinking, they told me the power went off so I emulated that by closing
charting in Omega TS and leaving the server running. WELL! to my surprise
no buy arrow appeared any more! It had disappeared just like they had all
told me, I couldn't believe that our other software product had given the
exact same results. So moral is from now on if we get a signal on the
closing bar of the day on a system we wait for the settlement and them close
and reopen to make sure its a valid system signal. If it is on the close of
a Friday we wait for Sunday night trading to place the order. That is the
policy now in place. That lesson cost me about 18% this year on that one
model, if it weren't such a good system I'd been doomed this year from that
one trade. I will also comment you only find these things out when you are
actually using the program to trade and you have money riding on the
software, then and only then does every little detail about the software
matter so much to you. MB
|