Very Strong Sell Signal - September 22, 2011

[roberto.giusto]

Billy and Pascal,

congratulations on both robots, they make an almost perfect "blend"!

One question on today's new suggested strong short trade: why is the stop loss level for this one being below the trailed stop level of the "official" one?

I normally see that any new suggested trade, after the official has opened, has a "worse" stop loss level than the trailed one in the case that the trade is being profitable.

I would have expected to see the opposite: maybe it already happened in the past, but this time it jumped to my eye being this trade a strong one.

Just trying to understand the "algo" reasons, I'm perfectly fine with the stops choices.

Thanks again to both of you,


Roberto

[Billy]

Billy and Pascal,

congratulations on both robots, they make an almost perfect "blend"!

One question on today's new suggested strong short trade: why is the stop loss level for this one being below the trailed stop level of the "official" one?

I normally see that any new suggested trade, after the official has opened, has a "worse" stop loss level than the trailed one in the case that the trade is being profitable.

I would have expected to see the opposite: maybe it already happened in the past, but this time it jumped to my eye being this trade a strong one.

Just trying to understand the "algo" reasons, I'm perfectly fine with the stops choices.

Thanks again to both of you,


Roberto

Roberto,

This is a frequent question. The difference comes from the fact that a new trade will have an INITIAL stop rule, while the old position is on a TRAILING stop rule. The robot computes the stop differently in each case, based on optimal backtests.
The fact that an initial stop of a new trade is above or below a trailing stop is also much dependent on 20 EMA ATR and it changes every day.
Billy