The appropriateness of using Take Profit and Stop Loss in automated TS. - page 3
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made a simple experiment, considered three cases
1) without stop-loss, exit by the signal
2) with stop-loss but after the stop loss occurs, a pending stop is placed in the same place as the first one and this happens until there is a signal to stop the order
3) with a stop-loss order and after it triggers, the order expires
if we compare the 1 and 3 variants, in case of using stoploss, profit is twice less, and maximal drawdown - 3 times; there is a tactical gain
If we compare Variant 1 and Variant 3, when using stoploss, the profit is reduced by half, and the maximum drawdown by 3 times, there is a tactical gain
Well, it's true, as I wrote, the use of stops in some cases improves the overall quantitative indices of the system, but what does it tell us? Maybe it indicates imperfections in the algorithm of signal generation?
If you think about it, for example, an ideal system producing 100% perfect signals (like 33 on the history), stops are only a hindrance. So stops are helpful only when the system generates a certain percentage of wrong signals, and the lower the quality of signals, the greater the usefulness of stops. I have not made final conclusions yet, but it is obvious, that the system should be developed without stops, and it is worth implementing them, if at all, in a profitable system.
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I have written and read it - the ravings of a stoner)
That's true, as I wrote, the use of stops in a number of cases improves the quantitative performance of the system as a whole, but what does it tell us? Maybe it indicates an imperfection of the algorithm of signal generation?
If you think about it, for example, an ideal system producing 100% perfect signals (like 33 on the history), stops are only a hindrance. So stops are helpful only when the system generates a certain percentage of wrong signals, and the less qualitative signals, the more profit from stops. I have not made final conclusions yet, but it is obvious, that the system should be developed without stops, and it is worth implementing them, if at all, in a profitable system.
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I wrote and read it, - the ravings of a stoner)
i can't even stop the price if the system gives out perfect signals, and there is no question of setting it or not) compare 1 and 3 charts to 389 trade, they are virtually identical
I agree that the development of the system should be done without stoplosses, but only for an indicator system where they strive for a 100% signal and then put a stop just in case. By the way, I do that but I also develop a nonindicator system and it is all based on the difference between a stop and a takeaway so there are options
..Written, read, - the ramblings of a stoner)...
It's not that bad, it's just a problem that has no one-size-fits-all solution.
I will personally join your vision of an ideal system, but due to lack of availability I am trying a compromise option.
SK., hanging on my wall, once offered a semi-automatic system with minimal intervention by the trader.
The EA works optimized without stops and profits, and the trader manually moves the protective stop and sometimes closes trades instead of the TP, because the EA is late to take profit. I agree, it's not kosher, but it gives the biggest profit so far.
The plan is to get rid of manual trailing of protective stop. I want to put in the EA the function of keeping stop at a small distance from the price, in case of loose connection, the EA will stop to move the stop and the position will stay covered.
This thread is just in line with my research! I've just set my Expert Advisor for optimization to determine optimal trailing, Breakeven, Stop Loss and Profit levels. As soon as the optimization is finished (3500 passes, 10 months, all ticks, TF D1 on 1.6 Mhz CPU with 256 RAM) I will post the best result with and without stops.
That's true, as I wrote, the use of stops in a number of cases improves the quantitative performance of the system as a whole, but what does it tell us? Maybe it indicates an imperfection of the algorithm of signal generation?
If you think about it, for example, an ideal system producing 100% perfect signals (like 33 on the history) stops are only a hindrance.
On the whole, I am also inclined to imperfection. But it is not all so clear and each case should be analyzed.
I have a TS that provides reliable profit without any stops (using the history of 9 years). With help of optimizer I select stops and they either worsen its performance, or slightly improve, but they are half the size of a deposit (ie, you can think that they are kind of absent)... A thoughtful investigation in the visualizer (and it's not a little history over 9 years...) showed that TC often sins by overlapping losses, bugger. :) But because it chooses the right and reasonable strategic direction, I decided to improve it - input-output filters or the signal algorithm should be based on another "element base"...
So, if the stops are interfering, that can also be an indication of non-ideality. In general, you should try to use stoppers - with the proper organization of the process they are like an aptitude test for the TS.
..In general, it's a must to try to screw in the stops - if you organise the process properly, they become like an aptitude test for the TC.
+1
Taste & Cash
In terms of Rosh's thesis of "walking a board over an abyss", a stop is a professional harness, a circus harness, and even a climbing harness is a means of reaching heights.
Professional climbers know how to use bows and belaying harness and they do not think it's shameful to hang from the rope.
Another thing is small dimensions of the tower, which may be destroyed by safety measures (the board may tip over! ))))).
so in thinking about stops, you should not start with the size of the stop for the TC,
what to us a stop, what to us all the subtleties of TC if the depo dies!
(here the size of the stop and its input is pure psychology)
And vice versa, if we have a long and long depo, thanks to it we can apply a mathematically correct stop to our TS.
Conclusion:
there are two sources of stop strategies
1. - The psychological source, mediated by the size of the deposit, i.e. fear and greed.
2. - The mathematical source, conditioned by the tests of the TS, i.e. Bernoulli and Euler.
Which of the stop strategies to apply is a matter of personal taste and personal cachet.
Another thing is the small size of the depo, which can be ruined by safety itself (the board may tip over! ))))
so the thinking about stops should not be based on the size of the stop for the TS at all,
we don't care about the size of the stop, we don't care about the subtleties of TC if the depo dies!
I think this aspect is less relevant, given the possibilities of using mini/micro accounts, lots... What kind of deposit is it if it can't withstand even 0.01 lots of drawdown required by the system, or what kind of system is it that allows such drawdown? So for a pack of cigarettes.... There just needs to be a proper linkage to the MM.
to Figar0
the depot can take it. he has no nerves.