Frank Birch Veteran   Posts: 171 Joined: 3/25/2006 Location: UK  User Profile | Hi Mark & all, Thanks for reaching out. I appreciate your keen observation and your question, which gives me the opportunity to clarify this for everyone. When I mentioned the term "naming" or giving the stop a "proper designation," I was emphasizing the importance of clearly identifying and labeling the specific exit strategy in our trade plan. Let me break it down. In our trade plan, we often use virtual stops, which are essentially algorithmic determinations of where a stop should be, based on parameters like ATRs. For the broker's emergency exit, we usually designate it as a virtual stop set X ATRs away, often referred to as the "Broker stop." However, if you don't distinctly name or label this "Broker stop," the system (or the vote line, as we refer to it) gets confused. Why? Because the vote line tends to pick the unnamed (or ambiguously named) stop over the primary fixed loss stop that we intend to be hit first. This mismatch is where the crux of the problem lies. In essence, any trade plan within your list that possesses an unnamed virtual stop is susceptible to this discrepancy. While it might not pose a significant issue in end-of-day trading scenarios, it certainly does in real-time trading. The end result? Your vote line results don't align with your Back Testing (BT) or Forward Testing (FT) outcomes, and there's a further discrepancy when comparing your broker's results to your vote line. It’s like trying to match two pictures, but one has a filter that slightly changes its appearance – they won’t align perfectly. To sum it up: By not giving a specific name or designation to the virtual broker stop, it's like giving two separate roles in a play the same character name. The director (or our trade plan, in this case) gets confused on which role to call to the stage first, leading to a disrupted performance. Mark, can you please share how you add pictures to the actual post without attaching them at the bottom? Hope that clears things up, Mark. Feel free to reach out with any further queries. Regards, Frank Birch | |
