In my not-so-scientific tests, I ran thousands, it does appear that there is an optimal stop points. Doubling the stop width, results in multiple times of CAR (Coonpunded Annual Return) increases. # of wins is not a good measure of successful trading system. Better ones I think are profit factor, CAR/MDD, CAR.
Hi rolling, interesting well researched coments, not! Sorry I couldn't reply earlier but Philly Fed numbers gave some great trades while you were busy... posting Correction:The stats are not on your side. They are on Connor's side and a anyone who trades his style eg never buying below the 200MA and using a 2 period RSI for trades. I don't trade anything like his style so my stats are nothing like his but if you do good luck to you. Have fun on ET as you'll get loads of stats. here
rollingstatic how old are you? with your last posts you just quilified to be moron in my eyes. you think you can establish FACTS based on one sample strategy? are you a f***** idiot? you know yourself you're about 25 or younger with 0% of experience other than your excel and yahoo data. you have no clue what you're talking about and your last few posts proved it. I thought it was a serious argument but you made it clear to me you have no experience and basing this on the most ridiclous of examples. I'm not wasting more time on this. case closed.
Be careful rollingstatic... there's some truth to what you say but I actually am pretty impressed with the OP's original post. (is that OPOP?) Conners develops one specific kind of systems... everything he does is mean reversion and his tests suffer from survivorship bias. Personally, every trade I take has a stop and anyone I train has to know where their stop is for every trade before initiating.
Can someone enlighten me as to what exactly it means to trade without a stop? Perhaps I am just misunderstanding how the term is being applied. I consider any reason to exit a trade with a loss as a "stop." It can be mental or physical and based on fundamentals or technicals (or phases of the moon, if you wish), it doesn't matter. A stop is a defined exit point at which you acknowledge that your trade was wrong. Also, I fail to see how you can properly position size if you have not defined a "stop?" (hence, your risk level). Now someone like Warren Buffett might not use stops in the traditional sense as he invests for the long term and is willing to endure a drawdown as long as his outlook on the market/company is unchanged, but I can't imagine how a "trader" would stay solvent without some form of stop.
yes, of course there is more to it. but tests have proven again and again and again that STOPS HURT PERFORMANCE regardless of style. If you would like, I would be happy to post references upon references.??? connors is but one, but the easiest to understand for the non math minded.
wont well, if you wont listen to facts--- how about this-- MOST traders use stops, and most traders lose lose and lose again. maybe its time to take a look at things from a fresh valid perspective so that you dont keep losing like the rest of them. if you want to win, you need to stop doing the same thing over and over and over and over
I have talked with someone working for a prop house. ALL of them use stops, they are not even allowed to trade without using a emergency stop