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Thanks brian_z,
You openned my mind!!!
Best regards & good trade
--- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@xxx> wrote:
>
> > 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@> 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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