Make your first million - page 164
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Just think about what I wrote about. I didn't come to these conclusions right away. :)
My thoughts are as follows.
1. It is indeed reasonable to link the stop to volatility. However, if trading on the daily, it makes no sense. Average daily volatility changes very slowly.
2-3. Well this is where we seem to have the difference. We should not fix the loss when the trend changes, but when it becomes clear that the entry was wrong. Even if the trend does not change - a stop should be triggered anyway, because no one knows whether the trend will change or not. So, in your example you say "and the price went down after that". What if it hadn't gone down? What if it had continued to move up? Don't we have any stops? Are you suggesting that we wait for the price to go down? Last year on the forums they were shouting "it's about to go up" all last half year. But the price did not make a U-turn. Those who had no stops - long ago dumped their deposits. If people had a stop-loss, they fix their losses and then compensate for them.
As far as I understand you are proposing an "intermediate" variant - without stops, but with control of drawdown at a calm market. In my opinion, this option is not better, but not worse than fixed stops. Because in the case of reversal - it reduces losses, and in the case of movement - increases them. Fixed stops - on the contrary, in case of movement - decrease losses, in case of reversal - increase them.
In this case, in my opinion, it was perfectly correct to close the stops on both sellers and buyers who were trading at hours or less. If their TS were not designed to handle such volatile spikes - then the stoploss is perfectly correct and natural. It is just unnatural to wait for price to move into three daily ranges to close a half-deposit loss. Sellers and buyers trading the daily ranges - didn't even notice this mouse fiddling you called "stop hunting".
My SL didn't even notice the spike either. On the daily timeframe - all very calm. Yesterday the Yew got close to the SL. But it didn't beat it. Just because it was above the strong trendline. If the SL had been broken through, even if the price would have turned around, the stop-loss should have worked anyway, because after the breakdown of the trendline there is a high probability of further moves in the direction of the breakdown. The evening is not over yet, the EUR might continue growing, and the SL will be knocked out, and even if it will start falling down, the SL will be knocked out correctly, because my TS is not designed for a trend breakout. My deposit will not be affected. Only the drawdown will increase, but the next trades will compensate it, because I am winning only one deal out of three or four.
So, the only thing I agree with is that SLs should be "tied" to volatility. Your variant also works, but whether it is better than "stops in pips" can only be said after testing.
You could have added some specifics. :)
From the screen little is clear, except that you have accumulated a large profit.
Deposit 5000.
Balance 7,845.
Equity 7798
Myfbook doesn't show it right. In 15 working days the profit is 56%. On average, 3.7% per day (of the deposit).
Trades number 2203 (all scanned ?) . Trade on 9 pairs.
Getting ready)) Need to get to the bottom of this. This is no laughing matter)) Kolyan and Puppet do not like joking around.)
so has the kolyan come to visit?
or how many millions are left?
I get the impression that TC has decided to make a million in posts...
Fixed stops, in my opinion, have a significant psychological downside.
....
Do you understand the difference? One focuses on the point of loss taking and the other on the point of entry into the position!!!
I agree with all the statements. But you see that these are purely psychological moments! In my opinion, there should not be any psychology in trading. What happens when psychology gets involved is very well shown by Daniel. So, it seems to me that posing the question of "what a trader focuses on" is fundamentally wrong.
In my opinion, a trader should not concentrate on anything except fulfilling of TS rules which were selected in advance. If he cannot do that - he should use experts. Which is what I do. Last year I traded manually, and all these "psychological aspects" interfered enormously, all attempts to "help the TS" only resulted in missing half of the profit. Now my principle - hands off the terminal! I trade using only Expert Advisors. And this year it became much easier. I've stopped thinking about where to open a position and where to put the SL.
And in this case - we have two fixation techniques. The first one - a fixed level of SL, the second one - exiting a position with a loss. Like I said, I cannot tell at a glance which of these techniques is better or worse. At a glance - each of these techniques has advantages and disadvantages. Therefore the decision about their use should be based on the results of tests on history. To my mind, none of them will directly lead to "losing a deposit". Only their incorrect use.
That's another thing. More than 3% a day isn't bad either, considering the number of trades. :)
No need to scan everything.
What strategy is used in trading? Is multicurrency analysis used or does one robot with different parameters work on each pair separately?
While you're trying to measure your virtual millions, I'll show you the real ones. Two managers with $3.8 million and $2.5 million in investments.
There is a good method of checking if fixed stops are set correctly - flip the position with targets equal to the previous stop size.
If the stop was set correctly, then after the rollover, the take should trigger and compensate for the previous loss. If the stop point was not set correctly, the stop will trigger again.
I don't quite understand what is to be compared.
One variant - we set fixed SL-TP. The second option - instead of SL, we set a rollover with the same SL-TP (only in the opposite direction)? Did I get it right ? I'm not sure this is the correct check, short and long trades are significantly different, especially in stock trading. In currency pairs, of course, the difference is less, but in my opinion it is there too... So this check does not seem quite right to me.
While you're trying to measure your virtual millions, I'll show you the real ones. Two managers with $3.8 million and $2.5 million in investments.
So you are sort of just trying to get even. It's just one trade, which is not part of the strategy. It is just a check to see if the stop is set correctly. After this trade is worked out, further trading continues according to the strategy. If most of the test trades get triggered stops, then the criterion for setting a stop in the main strategy needs to be refined.
Yes, I agree. The check is quite reasonable.