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> As you said, with AB we can only use stop loss feature.
A stop loss is one example of a way to control losses, perhaps the
most fundamental .... there are others.
> However, Can we trade -off between loss and profit???
> ex: if we invest into A (it's price may go up 80% and may go down
>20%,
> otherwise, if we invest into B (it's price may go up 30% and may go
> down 70%) Should we should choose A, ect
Yes.... there is always a trade off between risk and reward.
This is called the payoff ratio == ave win/ave loss (aW/aL).
As I mentioned, it is also necessary to consider the number of
wins/number of losses == Wins/Losses (W/L)
Mathematically combining the quantity and quality of our wins
produces a useful metric that summarises the relative performance of
our system (the series of trades we have made using a set trading
rules).
ProfitFactor == W/L * aW/aL
IF you look in AB >> AutomaticAnalysis >> report you can see the
Profit Factor for your latest backtest.
There are a lot of other metrics there that can be used to compare
the relative merits of your trading system.
>(Can AB helps us to follow
> this kind of matters???)
Yes, AB is a specialist program for testing and comparing trading
systems .... since a system is based on a trading concept it follows
that it also tests the concept.
If you are new to trading you will need to combine some reading and
thinking to come up with trading ideas and then test your ideas in AB
to see if they would have performed will in the past.
There is quite a bit of reasonable free material on the net and the
forum can also recommend some books as you go along.
brian_z
--- In amibroker@xxxxxxxxxxxxxxx, "lyhungvpsc" <lyhungvpsc@xxx> wrote:
>
> Thanks brian_z,
>
> Thanks for your deep and details answers!
>
> As you said, with AB we can only use stop loss feature.
>
> However, Can we trade -off between loss and profit???
> ex: if we invest into A (it's price may go up 80% and may go down
20%,
> otherwise, if we invest into B (it's price may go up 30% and may go
> down 70%) Should we should choose A, ect (Can AB helps us to follow
> this kind of matters???)
>
> I'am newbie so my thinking may be silly :D but it may help others.
>
> (I'm not nature English speaker also :D So my writing maybe
difficult
> to understand)
>
> Thanks again
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@> wrote:
> >
> > Hello lyhung,
> >
> > Well that is a very deep philosophical question ... are you a
> > philosopher by nature ... if not a complete answer would be
wasted?
> >
> > In trading, everything that can cause financial loss is a risk to
be
> > considered:
> >
> > - data delay or errors
> > - broker slippage
> > - insider manipulation
> > - events (earnings change, company news etc)
> > - computer/internet 'error'
> > - incorrect strategy
> > - anlytical error
> > - correlation
> > - psychological error
> > - portfolio diversification
> > - and many more
> >
> > All need to be considered and emlinated or contained.
> >
> > Your capacity to identify and control risk is a measure of your
> > trading stature.
> >
> > Much of that has to be done outside of AB.
> >
> > However you probably would like a simple definition.
> >
> > It is your ave loss per trade (based on your stop loss) * the
> > probability of losing per trade i.e. if you have a guaranteed
stop
> > loss of 2% then that is your risk per trade AND the risk to your
> > portfolio is based on the probality that you will experience a
run of
> > losses.
> >
> > brian_z
> >
> >
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "lyhungvpsc" <lyhungvpsc@>
wrote:
> > >
> > > How should we use AB to consider the risk??? (RISK and DECISION
> > > ANALYSIS @RISK)
> > >
> >
>
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