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Dennis Holverstott <dennis@xxxxxxxxxx> wrote:
> personally, i never use ANY of the built-in stops but i'll
> occasionally throw on a money mangement stop or a profit target as
> a quick test before i code my own. those 2 are relatively safe but
> all the trailing stuff is bogus.
Well, not completely. As Rick Saidenberg said in his description,
you're only really in trouble if the exit happens on the same bar
that hits a new high (for a long). Because the backtesting will use
the high of the bar to determine the trailing stop value, but a lower
trailing stop might have been hit inside the bar BEFORE the new high
was set.
And the same thing is true for trailing stops you code yourself. You
can't avoid this problem unless you look "inside" the bar to see the
sequence of price moves.
If the exit happens on a bar AFTER the maximum high/low was hit, then
the internal trailing stops are (as far as I know anyway) safe.
Gary
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