New Short Triggered - September 8, 2011

[mingpan.lam]

Hi Billy/Pascal,

Why we will would have a different stop level when we open a new position today when the short entry is the same as the existing opened position at 70.81?

Cheers,

Ellis

Magagement of an existing position
The 20DMF has been in NEUTRAL mode since the close of 9/6/2011.
The robot's current position is a SHORT that took place on 9/7/2011.
The short entry price was 70.81 and the current stop level is 75.06. Last close: 69.55

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Settings for a new position
These are the trade settings for the trading day that follows the 9/8/2011:
The short entry price is 70.81 and the stop level is 74.65

[Pascal]

Hi Billy/Pascal,

Why we will would have a different stop level when we open a new position today when the short entry is the same as the existing opened position at 70.81?

Cheers,

Ellis

Magagement of an existing position
The 20DMF has been in NEUTRAL mode since the close of 9/6/2011.
The robot's current position is a SHORT that took place on 9/7/2011.
The short entry price was 70.81 and the current stop level is 75.06. Last close: 69.55

-------------------------------------------------------------------------------------
Settings for a new position
These are the trade settings for the trading day that follows the 9/8/2011:
The short entry price is 70.81 and the stop level is 74.65

It is because the stop level is calculated as a function of volatility, which changes every day.
Higher volatility implies wider stops.


Pascal

[Billy]

It is because the stop level is calculated as a function of volatility, which changes every day.
Higher volatility implies wider stops.


Pascal

Ellis,

Each trade receives its own optimized risk management plan, depending on volatility, the initial entry price and the evolution of the trade since entering. You can not compare the trailing stop loss on a short entry at 70.81 of two days ago with the initial stop on a potential secondary entry at 70.81 today:
- volatilty has changed,
- trailing and initial stop rules are diferent,
- one trade is already 2 days old, the other is not entered yet.

We are simply using independently the optimal backtested stop loss rules for each trade. But the robot page only tracks daily the risk management for the initial entry.

Billy