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Hi Yuki
Thanks for the clarifications. I will be examining different exit
strategies after reading your posts. I assume that when you mention
being taken out of a trade by a signal, you mean maybe a signal from the
system that got you in or maybe a signal from another short-only system
(I hope this distinction makes sense - the whole reason I am looking at
these stops is that I have systems that are not designed to be always in
- that is, they are designed to trigger trades in one direction only).
While typing this, I just realized that I have not examined the concept
of a signal that says "Close your longs but that doesn't necessarily
mean go short". I have seen reference to these kinds of signals and
maybe they are a bigger part of winning systems than I have realized.
I have a lot to learn, obviously.
You said
I think you'll find most people here will report that performance of
their best systems degrade with the use of *any* stops.
Ok - I am trying to understand this. So do you mean that exits are
discretionary? Hmmm... I doubt that's what you mean, but maybe....Or
maybe you mean that they are always in so they are stop and reverse,
thus obviating the need for a 'stop'.
Anyway, I have some sense of direction now, so...once again to all who
have helped me out, thank you.
Nikku
Yuki Taga wrote:
> 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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