Best Practice for Trading systems

• 12/23/2020 at 10:41 AM #154958
  Monobrow

  Hi

  I’ve been auto trading a few months and working on a few systems…. I feel like i’m almost there with my strategy now, but it occurred to me that I didnt have any sort of protection for significant, sharp market movements in my system so today introduced a QUIT on consecutive losses (I went with 6).

  This got me to thinking… what other best practices / tricks / tips are there, that in your opinion should always be included? id love to hear your thoughts and will point out some of my simple ones below:

  1. Stop Losses and Take Profits (self explanatory hopefully!)
  2. Culmative Positions off (for most traditional systems anway, to avoid opening multiple positions with spagetti code)
  3. Protection against concurrent losses (I went for 6 in a row – either somehting bad is happening or your system is likely not as good as you thought it was)
  4. Preloading Bars to avoid issues with calculations early on. I believe default is 1k, but I went for the max 10k – just … why not? 🙂 (side question, any negatives to this?)

  I think those are my main ones, anyone else have any to add? (with re-usable code examples would get bonus points!)

   

  Thanks all and I hope you all had a succesful 2020 in this crazy world.

  

  Monobrow

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  12/23/2020 at 11:37 AM #154963
  robertogozzi

  I never use QUIT, but it can be effective, occasionally.

  I also don’t like much stopping trading after N consecutive wins  nor after N consecutive losses. In my opinion they don’t do any good, since you are altering the logic of your code because of some unexpected market behaviour. If you think the market is under pressure and can turn out to be unpredictable, just stop your strategy from autotrading and restart it at a later time when you think it’s fine to trade.

  I always use Stop Loss, Target Profit and Breakeven/Trailing Stop. I mainly use fixed values, but it’s your personal choice to tie them to, say, SuperTrend or ATR, ….

  As to accumulating positions…there’s no rule. If your strategy is not built on that feature, don’t use it randomly, but if you indeeed want to accumulate positions (especially now that long-awaited partial closures are supported) you can certainly do that, provided you account for a larger equity and margin needed.

   

  2 users thanked author for this post.

  GraHal, Monobrow

  

  robertogozzi

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