Help to program an idea that worked
- This topic has 42 replies, 4 voices, and was last updated 8 years ago by
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Hi, let’s carry on with our little chat.
Hereinafter, let’s assume always that the exit filter is 0%.
Two pictures are attached. The first (ELE-1) illustrates how exit prices are updated: it’s the lower low not between two consecutive historical maximums (bars 1 and 2), but between the correction bar (b) and the first maximum (bar 1), both included. So, in this example, 8.97, the low of bar b, and not the low of bar a. I think the picture is auto-explanatory of the reason why bar a can’t be used as the exit price. Remember that we’ll only know that bar 2 is a new historical maximum at the close of correction bar b. This is only for your information.
The second picture (ELE-2) is about our pending question. The position is closed at the right exit price, 8,97. Then, some years later (probably by that time we are already two or three times married) a new position is open at 10.41. At that moment the exit price keeps being 8.97. There are two options:
a) The exit price is immediately updated at 4,911, the low of bar c, although the entry bar in not a new historical maximum yet. This seems the right option to me.
b) The exit price is updated (always at 4.911) when the next historical maximum is reached (bar 3).
Which option do you prefer or even use in your real strategy? (Naturally the strategy code as it is right now doesn’t have any money/risk management that could be used to set our initial stop loss/exit price, which would be a third option).
Well, this post seems already half a novel, and in Barbarian for all our sins!
(Claro que peor sería que tuviéramos que expresarnos en la nueva lengua universal: el català :-))
Please, the answer a bit shorter than the question.
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Hi everyone
First of all, quo, I don’t mind the time (true, for various reasons, longer than I expected) I’m dedicating to this topic: it’s good for my coding brain (or half-brain in my case), good for my English and good for my better knowledge of the ins and outs of this platfom, to which I am quite a layman. So don’t feel sorry or guilty at all, happy to help. Just KEEP CALM AND ASK NICOLA.LM. Bad joke, I know, the good ones I keep for paying venues 🙂
Ok then, after opening a position we must update the exit price following the rules of the strategy. We agree so I’ll change the code accordingly.
About the correction thing when we are already in a position, though, or I’m totally lost or no misunderstanding at all. In fact, I’ve raised the issue not as a question but FYI, as I was quite sure you had another idea in mind. Let me rewrite “Remember that we’ll only know that bar 2 is a new historical maximum at the close of correction bar b” as: Remember that we’ll only know that we must trigger the updating of the stop at the close of correction bar b. As you see nothing changes and the issue subsists: we can’t use the low of bar a as the new exit price. Sure, this only happens when the low of bar b is lower than the low of bar a. In other, more frequent, cases, as the two shown in picture Good-Case.png, there’s no difference between calculating the stop going backwards from bar b or from the new historical maximum bar. So, no big issue in here.
This is an automatic strategy. Things do happen when they are coded to, not when is more convenient for us in hindsight: in this case we must wait for the close of the correction bar. We can’t act preventivelly because, for example, the high of bar b could be finally higher than the current maximum and we should not update the exit yet, for a new historical has appeared but no correction has taken place after all.
That’s it for the moment, quo and folks, many or few. Wake up if you are feeling sleepy by now and, please, don’t tell me I’m wrong (at least I am, naturally).
Cheers
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