SL TP til Åpen Ordre Pip Distance Kalkulator. SL TP-OE PIP CALC INDY v2 Indicator. Updates 1 Bestill Type Diskriminering 2 SL TP og OE pris 3 Forbedret brukerdefinerte etiketter. Funksjon Beregner pipforskjell mellom Order Execution OE pris og SL TP pris. Steder Tekstetiketter på SL TP-linjer Bestillings type, billettnummer, SL TP-pris, Pipberegning og Pip-etikett. Steder Tekstetiketter på OE-linjer Bestillingstype, billettnummer og OE-pris. Kan brukes med MT4-standard og alle andre passende MT4-applikasjoner. Etiketter kan defineres av brukerne - se skjul alternativer i Input Window. User defined examples. Ikke-siffer-symboler blir standard til pps, uansett om f-pps fraksjonelle pips - poeng 3 5 sifferprissetting er satt til true. Images, Pip-beregning Kontroller tester og nedlasting her. Slik plasserer du stoppfall og tar fortjeneste ved hjelp av en maksimal strategi. Når inngår handel, hvordan velger du poenget med stoppfallet og tar overskudd Klart, denne beslutningen vil ha innvirkning på hvor lønnsomme handlerne dine er. Men visste du at plasseringen av utgangsnivåene dine faktisk kan ha større betydning på lønnsomheten din enn avgjørelsen om hvilken retning å handle. Hvordan velge å stoppe tap og ta overskudd forexop. I det volatile valutamarkedet er det faktisk sant. Gitt hvor viktig denne beslutningen er, er det overraskende hvor lite trodde mange handelsmenn gir til dette komponent av deres handel. I denne artikkelen vil jeg forklare en kvantitativ strategi som vil hjelpe deg med å velge stopp og ta profittnivåer for maksimal profitt. Jeg vil også debunk noen av de vanlige misforståelsene rundt risikobeløpet s etups, og vis hvordan følgende fattige råd kan ødelegge et potensielt godt trading system. Hvis du bare vil prøve stoppet tap ta profitt kalkulator, og er ikke interessert i teorien, vennligst klikk her. Hvorfor Gjøre Stopp Tap og ta fortjeneste er en Plan for mislighold. En handelsposisjon vil normalt gå ut av en av to poeng. Etter at du har inngått handelen, enten. Prisen når TP, og handel slutter i fortjeneste. Prisen når stoppfallet SL, og handelen vindes opp med et tap. Når du bestemmer handelsutganger, er det noen ganger fristende å gi et utdannet gjetning. Noen handelsfolk bruker tekniske funksjoner som kartlys, trender, motstander og støtter. Andre velger ganske enkelt et fast forhold med overskuddsmål for å stoppe tap. Mens dette er veldig Vanligvis er det flere ulemper. Det er feilaktig. Når du antar utgangsnivåene for en handel, er det veldig enkelt å enten overvurdere eller undervurdere prisbevegelser. Det er ikke repeterbart og det gjør det svært vanskelig å analysere eller forbedre e ytelse Når det ikke er logikk eller metodikk bak plasseringer av utgangspunkter, vet du aldri om en feil skyldtes en feilberegnet TP SL-kombinasjon eller fordi strategien din ikke virker. Tradere vil ofte flytte stopper opp eller ned på etterfølgende bransjer basert på prøve og feil å prøve å finne en søt spot. Det er veldig vanskelig å automatisere metoder som stole på tarminstinkt eller andre subjektive beslutninger. Det er ikke noe galt med å bruke teknisk analyse som en veiledning for timing av handelsinngangen, heller ikke for å bedømme hvor langt Prisen kan bevege seg I stedet er metoden jeg beskriver nedenfor brukt sammen med både kartlegging og grunnleggende analyse. Feil ved bruk av SL TP som Proxy Risk-Reward. Forex trading forums er fulle av velmenende, men likevel misvisende råd om risikobesetningsoppsett og hvordan du setter stoppstoppene dine Dessverre mangler mange av disse menneskene å forstå den sanne betydningen av risiko eller belønning. Ideen om at du bare setter stoppet ditt mindre enn du tar fortjeneste, vil oppnå en viss risiko belønning er fullstendig nonsens. Using risikoen belønning å angi handel inngang og utganger gir ingen mening hvis du ikke vet sannsynligheten for utfall i en gitt handel. Ta dette enkle eksempel Anta at det er et lotteri koster 1 å gå inn Prisen er 1m Ved definisjonen av nave trader gir dette. Ved denne definisjonen, dette ser ut til å være et fantastisk spill å spille Imidlertid vet vi at to millioner mennesker går inn i lotteriet Dette gir sjansen for å vinne 1 2.000.000 en i to millioner Nå vi vet oddsene, vi kan regne ut den sanne risikobeløpet. True-belønningsrisikoforholdet 5. Med andre ord, for hver 1 du legger inn i dette lotteriet, forventer du å få 50 cent tilbake. De fleste ville nå være enige om at dette ikke er veldig bra spill Selv om det var en belønning for risikobevisningen på en million, var det en belønning for risikofaktor på en million. Dette eksemplet fremhever feilen om å bruke stopp og ta fortjeneste som et mål på risikobeløpet. I en handel har vi den virkelige risikobelønningen definert av. Risk-Reward Relationshi Den første måten å innse om handelsutgangspunkter er at mengden fortjeneste du vil gjøre på en handel, er direkte proporsjonal med risikoen du må ta for å fange det overskuddet. Dette er ikke en antagelse, men snarere en matematisk faktum. Ta følgende handelsscenario Si for eksempel at en næringsdrivende ser en oppadgående trend på timediagrammet for USD JPY se figur nedenfor Trenden har vært på plass i rundt en dag, slik at næringsdrivende mener det er en god mulighet for fortjeneste. Han bestemmer seg for følgende oppsett. Nå la oss analysere denne handelskonfigurasjonen mer detaljert. Det første du må legge merke til er at næringsdrivende ønsker å fange et overskudd på 70 pips på handelen. Så hva er galt med dette oppsettet. Basert på den siste prisen data for dette valutaparet, kan vi regne ut at USD JPY har en timesvolatilitet på 26 4 pips. Det betyr at prisen i løpet av en time er i gjennomsnitt 26 4 pips. Noen ganger mer, noen ganger mindre, men dette er gjennomsnittet. 1 Eksempel på handel, feil plassering av stopp tar fortjeneste forexop. Dette betyr at næringsdrivende prøver å tjene på 70 pips. I virkeligheten spretter han faktisk mot markedet fordi han stoler på at prisen ikke vil stige mer enn 20 pips fra den åpne prisen i løpet av livets handel Det kan være opptil 30 timer hvis den nåværende trenden fortsetter fra Figur 1.Stop Loss Advisor. Chart Indicator. Choosing riktig stopp-loss plassering er en kritisk avgjørelse, men det er ofte forlatt til tilfeldighet. Dette Metatrader-verktøyet anbefaler hvor du skal plasser stopper og ta fortjeneste på en hvilken som helst rekkefølge. Sett bare ønsket handelstid og vindforhold og indikatoren gjør resten. Giver den timeløse volatiliteten i USD JPY er for tiden over 26 pips. Denne mye stabiliteten i prisen vil være svært usannsynlig. Mens handelen har et svært lavt maksimalt tap på 20 pips, som kan virke som et pluss, er sjansene for at det er ferdig med profitten ekstremt lav. Hvis vi i gjennomsnitt vet at prisen på USD JPY beveger seg opp eller ned med 26 4 pips hver time, hvorfor ville det gjør noe Å være forskjellig for denne spesielle handelen Svaret er at det ikke ville, og handelen ville trolig slå stoppet av den grunnen. Dere til volatiliteten i FX, er dette sant selv om den forutsagte trenden fortsetter. Det grunnleggende problemet med oppsettet var at næringsdrivende prøvde å fange for mye fortjeneste uten å regne for volatilitet. Husk at volatilitet ikke er noe du kan unngå ved omhyggelig handel plukking eller en smart strategi. Det er en absolutt sikkerhet. Derfor er det langt bedre å gjøre volatilitet jobbe for deg i stedet for deg. Spørsmålet er da når du setter opp en handel, hvordan vet du hvor du skal plassere utgangspunkter, annet enn bare å ta en vill gjetning. Følgende vil forklare hvordan du gjør dette. Beregning av stoppfall og fortjeneste Bruke Maximals. Metoden jeg foretrekker å bruke er basert på en teknikk som kalles maksimaler. Dette gir en presis formel for å finne ut om sannsynligheten for at prisen beveger seg en viss avstand fra det åpne i løpet av en gitt tid. Denne modellen gir en fullstendig fordeling av prisbevegelser for en gitt volatilitet Denne metoden fungerer for en hvilken som helst tidsramme, minutter timer eller måneder. Det fungerer også like godt med enten historisk fortid eller underforstått fremtidig volatilitet. Ved å bestemme handelsutgangspunkter er det tre ting å vurdere. Den forventede tidsrammen for handelen relatert til profittmål. Markedsutviklingen. Profitmålene. Ta en titt på hver av disse. Steg 1 Tidsrammen. Type handelsmann du er, vil ha betydning for den tiden din handler trenger å være åpen for å nå din fortjeneste mål. En dag handelsmann eller en scalper ville holde en stilling i timer, minutter eller sekunder. På den andre ekstremen holder en bærehandler posisjoner i uker eller måneder. handelsmann er vanligvis mindre viktig Målet er å holde stillingen åpen så lenge som mulig for å samle interesse. Bare da er fortjeneste og tid knyttet. Så når du angir dine handelsutgangspunkter, er det første trinnet kjent nettopp hvor langt prisen er sannsynlig å bevege seg i en gitt tidsramme Når du vet dette, vil du kunne bestemme et realistisk resultatmål. Ta følgende eksempel Figur 2 nedenfor viser EUR USD over fem minutters intervaller M5 Diagrammet spenner over en 24- time-periode. Figur 2 EUR USD 5 Minutekart M5 24-timers forexop. Den første jeg gjør er å beregne volatiliteten over min valgte periode Fra de åpne lukkede dataene regner jeg med at det er litt over 10 pips per 5 minutters periode. Når jeg vet hvor flyktig markedet er, kan jeg projisere prisen fremover for å utarbeide sannsynligheten for et bestemt trekk x timer definert med 5 minutters intervaller inn i fremtiden. For å gjøre dette må jeg beregne det som er kjent som maksimale kurver se boks for en forklaring Kort fortalt tar volatiliteten som input disse kurvene meg til å si at sannsynligheten for at en maksimumspris enten opp eller ned er nådd. Figur 3 nedenfor viser de maksimale kurver beregnet i 1 time til 24 timer fremover for EUR USD-diagrammet. Figurer 3 maksimale kurver for EUR USD M5 - Pip Movement vs Sannsynlighet forexop. For eksempel ser vi på maksimal kurve i 24 timers topplinje, vet jeg at prisen har en 76 8 sannsynlighet for å flytte 62 pips i løpet av en 24-timers periode. Mens den har en 40 sannsynlighet av å flytte mer enn 141 pips i samme tidsramme. Random Walk. Jeg gir bare en kort beskrivelse av hva som er ganske komplekse beregninger. Den beste markedsmodellen vi har for forex er tilfeldig trinnsprosess eller tilfeldig spasertur. Dette betyr bare at I hvert intervall går markedet med en tilfeldig trinnverdi. Prisen kan skli mot en opptrend eller en nedtrend med en driftparameter. Ved å bruke en diskret enhetlig trinnfunksjon for å modellere disse prisbevegelsene, er sannsynligheten for at prisen når et visst maksimum når som helst kan bli funnet som. Vi forvandler da prisen Z ved hjelp av volatiliteten til en standard enhetsvariabel for sammenligning mot trinnprosessen Fra dette lager vi et sett med kurver for forskjellige tidsrammer. I hovedsak er jo lengre tidsintervallet og gre ater volatiliteten, jo lengre kan prisen gå fra det eksisterende nivået. Fra disse kan vi beregne sannsynligheten for en prisendring over en lengre tid. Medfinansierte og profesjonelle handelsmenn bruker ofte maksimale kurver eller noen variant derav Årsaken til at de er så viktig er at de tillater deg å sette opp handelen nøyaktig når det gjelder tid og fortjeneste. Kurven forteller deg om hvor mye fortjeneste du vil gjøre, er rimelig når det gjelder tidsrom. For eksempel vet jeg om jeg ønsket å fange en 300 pip-bevegelse, vil jeg sannsynligvis vente omtrent ti dager basert på dagens volatilitetsnivå. Dette er fordi fra kurven er det bare 10 sjanser for at prisen flytter 300 pips i en 24-timers periode. Steg 2 Den Market. If markedet er flatt, eller trender i en bestemt retning, vil dette ha et sterkt bidrag til hvor du plasserer stopp og fortjeneste. Med hensyn til modellen betyr det at vi har en asymmetrisk fordeling av prisbevegelser. Det er flere måter å tillate fo Dette er det, men det enkleste og det jeg foretrekker, er å bruke en annen volatilitet for opp - og nedadgående prismodell. Maksimale kurver vises på diagrammet forexop. Den statistiske skjevingen er nyttig her fordi den forteller deg hvordan asymmetrisk volatilitetsfordelingen er og tillater du legger til en oppover nedover drift. Random gå ikke trending Trend opp positiv drift Trend ned negativ drift. With tilfeldig gange, opp og ned pris bevegelser er like sannsynlig Når trending, to forskjellige sett med maksimale kurver er nødvendig, en for opp trekk og en annen for down. Step 3 Profit Target. Having bestemt på en tidsramme og på trending karakteristikker, kan jeg nå velge et passende fortjeneste mål som vil gi min handel en høy gevinst sannsynlighet. Jeg har sjekket diagrammet, og bestemte meg for å kjøp på nåværende markedsnivå, og jeg bestemmer at målet mitt vil være 40 pips og min kutt vil være -100 pips. Tabellen nedenfor gir sannsynligheten for at mine utgangspunkter blir nådd i hver av de tre markedsforholdene. Tak e profit 40 pips. My beste utfallet skjer hvis den kortsiktige trenden reverserer, det vil si hvis markedet stiger og gjør mitt kjøp lønnsomt. Det verste resultatet skjer hvis trenden fortsetter i samme retnings trend. I så fall har jeg en 42 sjanse av handelen slutter i fortjeneste, og en 47 sjanse for at den slutter med et tap. Når jeg setter handelen opp det jeg leter etter er sjansen for at overskuddet blir nådd, for å være minst 1 5x sjansen for å stoppe blir nådd Dette vil gi et vinnforhold på rundt 70 eller høyere. Også husk at hvis du flytter stoppet eller ta fortjeneste mens handelen er åpen, gir du et helt annet sett av resultater. Analysere Trade. For å se hvordan stopp og ta overskuddsnivå skift for ulike trading tidsrammer, kan jeg trene en konvolutt som gir meg et fast vinnerforhold Grafen nedenfor i Figur 4 viser dette plottet ut for mitt eksempel trade. From dette kan jeg se at hvis jeg var handel over en 12-timers periode, kunne jeg velge å sette. Det ville oppnå th samme gevinstforhold Det ville også gi en lavere fortjeneste på bare 26 9 pips. Figure 4 TP SL-konvolutt for fast trade-vinnningsforhold forexop. With min 24-timers tidsramme, kan jeg også se hvordan de mulige resultatene vil endres over tid. diagram under Figur 5 viser sannsynligheten for en gevinst, et tap, eller handelen gjenstår åpen over 24 timer, den forventede levetiden til min handel. Fra diagrammet kan jeg se at den har høyest sjanse til å lukke profitt innen de første 90 minuttene av å bli åpnet Deretter øker sjansene for tap i betydelig grad. Frekvens 5 EUR USD Handelsutfallssannsynlighet over 24-timers periode forexop. Dette er fordi de maksimale kurver blir flattere i lengre perioder. Hvis du ser Figur 3 igjen, vil du se at kurvene for 24 timer og 18 timer er ganske liknende, mens det er stor forskjell mellom kurver på 1 time og 6 timer. Høyeste differensial er i de første intervaller hvor kurvene er bratteste. Money Management. As vist ovenfor, dine stoppavstander må jobbe i form av fortjenestemålet og volatilitetsnivåene. Nye handelsfolk legger ofte stoppstopp for stramt og tenker at de reduserer risikoen. Den vanlige årsaken til dette er at de bruker altfor mye innflytelse og prøver å redusere eksponeringen ved å sette grenser for individuelle handler. Det er bedre å håndtere risiko gjennom eksponering i handelsstørrelsen enn å bruke stopptap som ikke gir mening. Anta at du ser en handelsmulighet, og den potensielle drawdownen må være 300 pips for å fange det overskuddet. Hvis 300 pips ikke er et akseptabelt tap, så er det er bedre å redusere innflytelse og justere din handelsstørrelse nedover for å gi deg mer fleksibilitet. I stedet for å handle en masse, bør du vurdere å handle i en tiendedel av mange enheter eller lavere. Hva er viktigst er at et potensielt tap eller drawdown beløp på en handel bør håndteres i kontoen din Dette bør være en del av en overordnet pengehåndteringsstrategi slik at du vet dine tapsgrenser og tapene, selv etter hvert vil det ikke føre til marginsamtaler eller konkurs count. Remember, over-leverage er 1 morder av nye forex handelsfolk. Stop Loss Calculator. I gir Excel regnearket med alle beregninger her, slik at du kan laste den ned og prøve dette systemet for deg selv. For instruksjoner om hvordan du bruker ark, se her Regnearket har ikke den direkte prisinnmatingen som MT4-indikatoren bruker, men du kan manuelt lime inn historiske prisdata fra MetaTrader for å finne ut optimal fortjeneste og stoppe tap på samme måte som jeg forklarte. MetaTrader indikator, som gjør de samme beregningene i sanntid og inkluderer tilleggsfunksjoner, er også tilgjengelig. Se nedenfor for flere detaljer. Vil du holde deg oppdatert. Bare legg til din e-postadresse nedenfor og få oppdateringer til innboksen din. Hvorfor mest trendlinjestrategier feiler trender handler om timing Tid dem riktig kan du potensielt fange et sterkt trekk i markedet. Dagens volumbrudd Denne strategien fungerer ved å oppdage breakouts i EURUSD til tider når volumet øker kraftig Usua lly. The Engulfing Candlestick Trade Hvor pålitelig er det Du kan ha sett at det finnes utallige artikler på nettet som erklærer å forfølge strategier er en sikker. Keltner Channel Breakout Strategy Den klassiske måten å handle på Keltner-kanalen, er å gå inn i markedet ettersom prisen går over eller under. Momentum Day Trading Strategy Bruke lysemønstre Denne momentumstrategien er veldig enkel Alt du trenger er Bollinger-båndindikatoren og til. Hvorfor bytte markeder er der de virkelige pengene er gjort Alle seriøse penger ledere vet at de smarte pengene er laget ikke når markedet er stabilt, men når. En uke etter Brexit Fokus på valutaer Boe sa også at den var klar til å treffe ytterligere tiltak hvis det var nødvendig. Nedgangen i valutaen er. Hans Steve Great artikkel Kan du gi deg råd om hvordan belønningsrisikoen beregnes jeg er nybegynner og til nå var jeg beregner belønningsrisiko ved bare å dele TP pips SL pips, men lærte at det ikke er riktig etter å ha lest artikkelen din. Jeg kan ikke få matematikken tisk figur vist i Excel-arket for målet-vinn-forholdet jeg valgte. Kan du også snakke med et eksempel på hvor sannsynligheten for handelens vinner og sannsynligheten for handelstap er beregnet. Takk så mye. Hei, jeg liker virkelig artikkelen din jeg lurer på, gjør du har et regneark for å beregne maksimale kurver Som i figur 3 har jeg lastet ned Excel-filen for Stop Loss Calculator, men denne er ikke der, eller i det minste kan jeg ikke se den. Denne grafen er fra et annet regneark. Det kan gå i en av de elektroniske verktøyene på et eller annet tidspunkt. Han Steve Jeg var på utkikk etter en løsning for Stop Loss-plassering og kom over artikkelen din Takk for hva som synes å være en fin løsning Jeg bruker ikke MT4, men har vært i stand til å eksportere den historiske datoen My eneste utfordringen er at jeg ikke kan lime inn dataene i de angitte kolonnene, da cellene er beskyttet. Hvordan kommer jeg rundt dette? Kan jeg få passordet. Et passord er ikke nødvendig Dette skjer når du limer inn for mange rader for rekkevidden Bare klipp klippen ws til maks antall tillatt og det burde være bra. Steve, håper du har det bra. Fantastiske indikatorer. Jeg elsker hvordan alt er matematisk forklart og gir god mening. Jeg har matematisk ingeniørbakgrunn. Har allerede kjøpt noen av indikatorene og leter etter min neste for å kjøpe. For dette stoppforsinkelsesresultatet, er det noen grunn til at 288 perioder ble brukt til å generere utgangene. Jeg finner at de fleste trender på parene jeg handler beveger seg i 20-30 perioders sykluser, så jeg bruker det som prøvetiden, slik at jeg for eksempel kan ta opp et 15 min-diagram og ha en SLTP-verdi som sammenfaller i stedet for å bruke en lengre periode og må konsultere kortere tidsramme for SLTP-verdier. Er det for kort en periode. Hva ville være kult er hvis kortere tidsramme SLTP-verdier kan vises på lengre tidsramme. Hope det jeg skrev, gir fornuftig takk. Det er ingen spesiell grunn for perioden 288 annet enn det er en komplett dag i M5-diagrammet. Det er også innenfor grensene for hvor calcula satser vil fungere Om lag 20 til 1000 intervaller er det optimale. Formelen for å estimere trender er basert på et mål på oppovergående volatilitet I eksemplene over maksimale kurver ble en flat markedsmodell brukt. Dette betyr ikke noe trending, det betyr bare at det er Det er ingen forutsetning om retningen av trenden. Svært takk for denne artikkelen. I følge Wikipedia må den andre delen av faktorialen være nm, ikke mn. Er dette en skrivefeil, eller jeg savner noe takk. Formelen I Ve vist i boksen ovenfor er at for å finne sannsynligheten for at et maksimumpunkt blir nådd i en tilfeldig tur som er et punkt på eller under maksimumet, sjekket jeg dette akkurat nå med Wikipedia-versjonen og faktisk med mindre du er ute fremover er svært liten, de to formlene nm eller nm gir identiske resultater Dette er på grunn av kombinatorisk funksjonens symmetri Men den rette i henhold til reflekteringsprinsippet er nm Det er også spesiell sak å bruke nm 1 hvor paritet er forskjellig i m og n Og på grunn av symmetrien er mn 1 identisk med nm igjen, med mindre n er veldig liten dette vil ikke gjøre stor forskjell for tallene hvis du bruker enten nm eller nm. Takk mye for forklaringen Kan du også Vennligst forklar hvordan m er relatert til 62 pips. Som jeg forstår, er det totalt antall trinn m antall trinn som trengs for å berøre 62 pips. I formelen vet vi hva som er sannsynligheten for at maks vil skje etter m trinn, men hvordan er dette relatert til 62 pips Hvordan vet vi at dette er 62 pips og ikke mindre takk. Pipebevegelsen avhenger av skaleringsfaktoren i tilfeldig prosess. Denne skaleringen styres av to ting. Tidsperioden for hvert trinn for f. eks. hvis det er 5 minutter, 15 minutter, 1 time eller uansett. Og for det andre vil volatiliteten fordi det vil fortelle deg den forventede bevegelsen i tilfeldig prosess for et gitt tidspunkt. Fra det kan du trene den forventede avstanden og konvertere til pips eller prosent. Hun Steve skje du å vite økonomien l teori som skjer for å ha en nær tilknytning til stop-loss-ordningen, veldig fin artikkel. Den underliggende teorien er mest alltid basert på stokastiske sannsynlighetsmodeller. Dette brukes til å karakterisere prisvolatilitet og risiko. I grunnleggende teori er det funnet en karakterisering av volatilitet og dette brukes da som en måte å modellere prisutviklingen Det er i form av en sannsynlighetsfordeling som tillater noen form for fremspørsel. Men det er mange andre som dekker mer uklare områder. Det er også forvrengningsrisikomodeller som prøver å modellere lange halehendelser For eksempel hindrer prosessen med stop-tap forvrengning av prisene som visse nivåer blir rammet eller av høyeffektive lavt sandsynlighetshendelser som faller utover konvensjonelle modeller. Finansiell risikostyring og VAR-teori er et godt utgangspunkt. Jeg, kanskje, planlegger du mt5-versjonen av dette indikator Jeg har allerede mt4 versjon, men mt4 er mye tregere i backtesting Ha en fin dag. De sa at mt5 er raskere Kan ikke si har sett en forskjell i t i min backtesting, men jeg antar det avhenger av hva du gjør. Det er ikke en MT5-versjon for øyeblikket, kanskje senere hvis det er mer etterspørsel etter det. En veldig interessant artikkel. 23. februar 2015 ga du ligningene for p vinner, p mister p åpen i et svar på BYO2000 Mesteparten av det er fornuftig for meg, men kan du forklare hvordan du kommer til ligningene for p-vinn først og p-lose først. Dette er en betinget sannsynlighet ved bruk av standard teori. Hvis prisen berørte både stoppet tap og ta fortjeneste i en tidsramme, så er det to forskjellige sannsynligheter med det settet. Enten det berørte SL først, eller det berørte TP først i den perioden. Derfor de to forskjellige tilfellene å telle for dette. God jobb, men jeg personlig ikke stoler på så mye random walk-teorien. Det står at fremtidige prinser normalt distribueres, og sannsynligheten for å ta hver verdi avhenger av volatiliteten i standardavviket i dette tilfellet. Basert på det, hvordan kan store prisfluktuasjoner Forklares For eksempel rikelig og tar tilfeldig tur som en absolutt sannhet, ville det være ekstremt bisarrt å se prisendringer over 3 3 ganger volatiliteten siden sannsynligheten er mindre enn 1, men hvis du ser på markedet, har det skjedd ganske mye. Hvis du krevde det spesifikke eksempler fortelle meg at jeg vil vise deg. Jeg vil vite din mening om dette, og hvis det er mulig, ha en ide om hvor effektiv denne strategien er når du bruker den. Jeg kommer helt og fremst der du kommer fra Mange mennesker spesielt Tekniske forhandlere er ikke enige med RWM Det er deres mening jeg kommer ikke til å bruke mye tid på å forsvare den da det er folk der ute som kan gjøre mye bedre jobb enn jeg kan. Selv om det jeg kan si er at mye av kritikken Jeg har sett er uberettiget eller rett og slett feil. Det du sier ovenfor, gjelder bare hvis du antar at volatilitet og drift i modellen aldri endres. Egentlig selv om disse komponentene endres hele tiden. Volatilitetsmåling er per definisjon sakte, slik at du aldri vet hva jeg nstantan volatilitet er Du kan bare anslå det basert på informasjon tilgjengelig på det tidspunktet Så når du sier en 3x flyktighetstrinn, betyr det egentlig 3x hva volatiliteten var i det siste. Ikke hva det er på et gitt øyeblikk. Dette er en begrensning av Måling er ikke modellen Som jeg nevnte i artikkelen kan implisitt volatilitet gi deg et fremovermål, og det kan brukes i stedet. Så langt er RWM den beste og enkleste forklaringen på markedsbevegelser jeg har sett ennå. Hvis noe bedre kommer med, vil jeg være først for å bruke det jeg har sett avanserte simulatorer, og jeg kan fortelle deg at du ikke kan fortelle forskjellen mellom dem og noe annet prisdiagram, alle typer kartmønster er sett og kan reproduseres. Ordet tilfeldig synes bare å være et rødt flagg til en mange mennesker Men RWM har både en deterministisk og ikke-deterministisk del, og det er den deterministiske delen vi prøver å oppdage og handle på. Han kan forklare hvordan du laster opp nye metatrader-data i Excel-spredningsarket, takk din h elp er verdsatt. Jeg ville være takknemlig hvis du kanskje kan gi en mer detaljert forklaring på hvordan du har beregnet maksimalbordet som brukt i Excel-regnearket. Ved første øyekast ser det ut til å være relatert til en eller annen form for kumulativ funksjon av p Yn m sannsynlighet du nevner i forklaringsboksen Tilfeldig Walk, er kanskje en slags kumulativ distribusjonsfunksjon, men det er ikke beskrevet her. Jeg leser det relaterte materialet og koblingene som er gitt om Random Walk, samt andre kilder til informasjon fra forskjellige forfattere , men kan ikke synes å finne noe som vil forklare hvordan du har beregnet maksimalbordet. Maksimumene er en prognose for hvor langt prisen forventes å bevege seg maksimal avstand over en viss tid. Det tas fra den tilfeldige turmodellen med eller uten en driftskomponent Drivingen gir trenden slik at modellen kan prognostisere endringer i forskjellige retninger annet enn et flatt marked. Det finnes standard matematiske prosedyrer for å utføre dette og kreativiteten. ng en diskret tidsbasert sannsynlighetsfordeling fra den. Fra den distribusjonen er det mulig å utarbeide sannsynligheten for en prisbevegelse innenfor et bestemt tidsintervall. Det er noe mer diskusjon om det her Duke Uni har også mye god info om dette emne Ovennevnte papirer gir en oversikt. Det er noe jeg ikke forstår. Sjansene dine for å vinne er høyere, la si 68 3 for å sitere ditt eksempel, men beløpet du vil vinne er lavere 26 9 enn mengden du mister -67 3 Dette fører til en negativ forventet avkastning. Så hvis du kjører denne strategien mange ganger, vil du ende opp med å tape penger, riktig. Du må også regne med sannsynligheten for at handelen fortsatt er åpen. Det er en sannsynlighet for at prisen ikke t nå enten stopp eller ta fortjeneste, og som står for den manglende verdien i forventningen. Så verdien 1-0 683 i formelen din tar ikke hensyn til alle andre utfall som må integreres for å finne den sanne forventningen. Det er alltid en endelig sannsynlighet th i handelen vil være åpen men lenge du venter Hvis du ser på figur 5, for eksempel blir p åpen grafen mindre, men det blir aldri helt null I begge tilfeller er dette en sannhet om beregning det er ikke noe som bare gjelder denne strategien. Faktisk er en forventet lønnsomhet for en handel hvis jeg ikke gjør feil, en integrert del av en asymmetrisk maksimalt kurve. Har du ved en tilfeldighet gjort denne beregningen i testen din, da jeg synes dette er den mest relevante mengden for å optimalisere på. En annen ting er at dette fortsatt er veldig forenklet i den forstand at konstruksjonen av ditt stoppfall og ta fortjeneste er basert på hvordan du bygget signalet. Min forståelse er at signalet du bygget er en forenklet versjon av noe langs denne linjen hvis du føler at markedet er overselling en nedadgående trend du vil kjøpe dermed trend og trend - det var ikke veldig intuitivt ved førstebehandlingen. Da vil du bygge din asymmetriske maksimale kurve, siden du ser på en asymme tric volatilitet hvilken type forteller deg om trenden var fundamentalt stoppende og fremtiden var støy, kan jeg fortsatt forvente at markedet trender lavere med x pips på grunn av underliggende volatilitet. Jeg er ikke sikker på måten du måler på, men det er fornuftig gitt at i Faktisk, det du vil se på er volatiliteten til prisen hvis det ikke var noen trend som skjer, noe som vil gi deg grense som vil bli brutt raskt hvis trenden skulle fortsette og prediksjonen var feil, jeg føler at dette er på en måte en bedre måte å inkludere det potensielle signalet i ditt stoppfall, da stoppet tapet skal da være strammere, men på en forsvarlig notat. Overallet liker jeg ganske godt de ideene du eksponerer her, men jeg føler hovedpoenget som er den forventede avkastningen beregnet fra integrering av maksimal kurve mangler, da dette er det som kan kontrolleres i live trading eller backtest. Det mer interessante spørsmålet til meg er den motsatte hypotesen At det er den høyeste sannsynligheten estimatoren MLE av trenden og volatiliteten gitt en støyende se prisavvikling Fordi uten å vite dette, vil enhver forventet avkastning i alle fall være null når du ikke kan foreta en tidligere antagelse om trendretningen deterministisk og du har et symmetrisk utvalg av sannsynligheter. Løsninger til MLE kan bli funnet, men det betyr at du bruker Monte Carlo simulering eller noe lignende siden det ikke er noen lukkede skjemaer for dette problemet. Dette er noe vi jobber med. Den indikatoren fungerer på noe for f. eks. på CFD eller bare forex. Det skal fungere på de fleste instrumenter, inkludert CFDs Metals, Oil og så videre hvis du har noen problemer, bare opprettholde en support request. i tror at hvis du bruker rrr som dette, kan denne 82 tps sannsynligheten ikke gjøre noen hjelp for våre kontoer, men det kan være slik vi nye handelsmenn vil høre, stort stopp tap og stram ta fortjeneste, det er forlokkende for nybegynnere takk zkan izmir Turkiye. Ingen her er å anbefale en sl eller annen verdi Artikkelen er en analyse av stoppet loss plassering og hvilket resultat som har på din rr og på proba bility winning or losing the trade If you had read further than para one you would understand your remark has no logic but is the view of the amateur. Great article-thanks very much Is the spreadsheet still active so that historical data can be copied, or has it been protected since the last posts I have Excel 2010 but there is no apparent way to paste data in the Input tab. Yes it is still active No, it s not locked But to edit you will need to save a local copy This is because Excel 2010 and later will disable edits for any spreadsheets downloaded from the web If you are still having an issue with this please use the contact form to get in touch and I ll take a look. Thanks, the problem seemed to be with Excel 2010 I tried 2013 and it works fine. Hi, I was wondering how the maximal curves are built using estimated volatility given 5m volatility of 10pips, so volatility for 24hr s5 sqrt 24 60 12 0 01697pips Then for P X TP we can use z x-mu s24 and Pr z TP-mu s24 , for TP 40pips and mu 0, im not getting 82 probability but 100 I m not sure this is the right way to do it Wondering if you could point me to how to build those curves. Please see reply below. Hi, nice article I m trying to understand it I have a question about how sample volatility is used in the calculation of maximal curves. Am i supposed to approximate the binomial dist with std normal using z x-mu s x s if mu 0, s 0 001 then calculate P z c where c is TP So if s5 0 0010 per 5m, we get 24hr volatility as s24 s5 sqrt 24 60 5 0 01697, if target price is 40pips then is P x 0040 or using z, P z 0 0040 s24 but this doesn t give me 82 chance of reaching TP. Further, doing this only gives me the prob of z being above c at the end of the holding period but that s not what we want, we want to find P z c at any intermediate time Would be great if you could explain. It is a cumulative probability of maximal distance traversed in a certain time So by that definition it covers all intermediate times between such as P z c i n your notation I would also calculate the 24 hour volatility directly if that is what you need, rather than trying to scale up from 5M timeframes. Excuse me Steve. is this spreadsheet valid only for the EURUSD pair I tried to use it with AUDUSD values but got thousands pips large TP and SL While with EURUSD values it works perfectly. Yes it is compatible with AUD USD This problem is most likely due mixed data histories Please ensure all of the old data is removed and reset the pip value selector. Alternative you can use the MT4 indicator which is now available and does this for you. This is a very detailed article and confirm to me what I thought when I approached the Forex market after a short period of trading You mentioned at the end of the article that you have also an EA that make the same calculations of the TP SL as your great Excel spreadsheet and I would be very happy to integrate it in my own EA used to trade Is it available for download free Does it work on live data taken direc tly from MT4 without the need to export them Thank you very much for your answer and for your website. Yes it can work with a live price feed It could be made available as an MT indicator in the future but that would depend on the interest as it would need to be recoded. is this spreadsheet valid only for the Pounds pair. It should work with any pair If you re importing data from Metatrader please make sure the sizing is correctly set in the data tab. Hi, I can t paste right, I mean when I copy historical data from MT4, and paste it to input as you said, there are no spaces between the comma, and it is not divided as on your picture In your picture each cell gives one information like date, etc, but when I paste it the information starts in one cell and ends in another I have new excel, what should I do Regards, Micha. If your data is all in one column as it sounds then you need to use the text to column function in Excel to format it into separate cells If you saved it and opened it as a c sv file it would normally do this for you. One of the best articles I ve found on stop and profit targets Thanks for sharing your knowledge with a newbie like me. problem with excel file can you upload it again. You will need Excel 2010 or later otherwise some of the features will not work. Hi, I can t paste the same as you when I use data from MT4 The numbers start in one cell and end in the other I have new excel What should I do. That s a very nice of you Mr Steve According to calculating volatility and RRR, I am wondering that as a day trader with a very short horizon period of investment Ex 5-15 Mins chart This method could be potentially help any trades Why I said so What being said is that If I my trade set up were 2 1 RRR, which I have to set my SL at -200 and TP at 100 In the long run, do you think this kind of statistic will help the trades to win Literally, taking a smaller pips and widening a SL could really boost up a winning percentage which means that once I losses such any s ingle trades I have to try to double up profitability to cover such losses Here come to my question, in this kind of situation that I earlier mentioned, do you have any way to fix it or if the theory you mentioned works, how could you adapt to use with scalping trader and day trader style Thank you very much for your consideration in advance. It s a good point and one I should have expanded on in the article In my opinion it doesn t make a lot of sense to have a fixed ratio of SL to TP for all cases The choice should be dynamic because it depends entirely on the situation you are trading and the market conditions. A breakout trade for example may have a low probability of success but a high payoff As well it is usually clear after a short time whether the breakout is going to happen or not In that case it doesn t make much sense to allow say a 2 1 SL TP which would allow a big drawdown When in fact if the draw happens you already know the setup has failed In other situations the reverse may be true. Great article Can you explain why you calculate volatility on open close data From the open close data, I calculate that to be just over 10 pips per 5-minute period Why don t you use the ATR or high low data I m trading daily charts, so the difference is quite large. You can use ATR You can also use the Bollinger bandwidth as a vol measure Whichever you use you should get roughly the same ratio of TP SL however because the measures are relative to each other and not absolute If you need to calculate a specific probability then in this case some calibration is needed depending on which vol metric is being used. thank you for your good strategy i have question i tried to calculate probability for volatility of 10 pip per 5 min for 1 hour for distance 51 which gave us n 12 and m 6 for box formula but i calculate 5 for probability and from your curves it seems true percentage is 15 can you tell me why my result are different thanks. Your value seems too low Because these are proba bility functions the curves need to be worked out as a cumulative value of the function not the point value over the move distance you are looking at. Probably the best forex article I ever read. Hi, very nice and useful article I was wondering if it was possible to have a numerical example of how to calculate the probability using random walk In your example, are you assuming a drift component 1 Or less Thank you in advance Bye. Where s the EA. You can have the price rising then falling in which case it passes a TP AND SL For eg If you have very close TP SL then these have near 100 chances of being hit If you imagine a space of outcomes you have. p SL only hit P TP only hit P SL and TP hit P Neither TP nor SL hit. ECB EURNZD, EURAUD, EURGBP, EURCAD whipsaw upwards before collapsing The greatest one was the EURGBP this time round. One either widens their SLs 150-200pips for crosses or tightened stops risked a larger loss when it hits the SL Other than staying out completely. Prior to ECB, EURCAD went to low of 1 36945 The whipsaw touched SL of 1 3765 before retracing downwards For a short position, adding a Stop Loss gave away profit of 70 pips Does assigning probability described applies to risk events like ECB. The EURGBP is now back at the same level, though it whipsawed the most. What s your view about contrarian trades that agrees with TA at the time you look at it example would you have longed the EURNZD on Mar 5, would using this probability analysis tell one not to long but short it instead although the charts are long Measuring the strength continuity of reversal moves. Cheryl - Does assigning probability described applies to risk events like ECB. Not unless these events occur frequently within the time sample you are looking at, but even then its unlikely you could ever model them to predict an outcome Major news releases those with very high impact are by their nature unpredictable and can will change the trajectory of the price in ways that are beyond normal statistically analysis. Cheryl - What s your view about contrarian trades that agrees with TA at the time you look at it example would you have longed the EURNZD. Absolutely, contrarian trades can and do work but then there are limits, I would be cautious about trading contrarian against strong fundamentals For eg, I wouldn t long EURNZD simply because of the swap yield of -4 24 on the long side The strong downward trend for the last six years is a reflection of that But then if you re scalping a few pips here and there it can make sense, and sure the Euro is going to turn sooner or later. The maximal curves show the probability of how many pips price will move in either direction right I don t quite get how the curves can be applied to just TP eg if we want to know the probability of TP of 40 pips in 24hrs, yes the curves do give a probability of 82 , but wouldn t it be 40 pips in either direction ie 41 of 40 pips 41 of -40 pips because I m assuming the curves have no drift, a walk in either direction is equall y likely, etc Maybe I m missing something apologies if it s a dumb question Thanks. No only in one direction The maximal curve will give the probability of a maximum point being reached, or equally if you apply the formula on the other side, to a minimal point being reached When symmetric as you say, it is just mirrored. So for eg P Z 40 pips gives an independent probability only of the price moving above the 40 pips level It says nothing about the price falling say 200 pips below, this is why there is a separate case for the SL point. With no drift, yes it would be the same 41 for a move either side. apologies again, I m a bit slow let s see if I got this The SL is a separate case So just considering the TP, what the maximal curve shows is P Z 40pips P Z 40pips 41.Not quite What the maximal curve basically shows is the probability of a high-watermark being reached and that applies for a certain time period only So say you want to know the probability of the price going 40 pips or higher within 24 hours That s P Z 40 pips from the 24-hour curve it s 82 After 1 hour, its 28 thereabouts, I am just looking at chart not in Excel. Thanks for your patience Steve. It was probably my fault, but my previous comment was strangely truncated What I wrote was to ask if the maximal curves show P Z 40pips P Z 40pips 82 If so, doesn t that also imply P Z -40pips 82 , which surely cannot be I m lost here. You are welcome. I have to answer here because its not possible to add a reply any deeper it will be better to continue this in Forum section where there is more room. byo2000 What I wrote was to ask if the maximal curves show P Z 40pips P Z 40pips 82.There is no addition here did you mean P Z 40pips, it gives this as 82 from the curve This tells me only one thing in isolation that the TP has 82 chance of being struck. Very cool idea great article I have some questions In Step 3, can you explain how you got the table for p win , p loss , p open Thanks. Sure It s standard probability theory. Say p wl P price hits SL TP. P wl p TP hit x p SL hit p win first p TP hit x p wl p TP hit p SL hit p lose first p SL hit x p wl p TP hit p SL hit p win p TP hit p lose first p lose p SL hit p win first P open 1-p win - p lose. Thanks Steve I love your articles. Could you commend on reversal moves Trades such as EURAUD on 20 Feb hit a low of 1 4385 and spiked upwards to 1 4583 100-200 pips reversed moves can be pretty tough psychologically to place stops where you don t want them too close, yet when it hits SL it erased off those hard earned gains or puts one in steeper losses. I was in some other trades that reversed off its lows As I read your posts, I know we are going down to really precise levels now That -100 stoploss can take place in a very short span of time and hurt quite a bit if one s position is in several trades at the same time. EUR AUD is quite a volatile pair, with about 50 higher volatility than EUR USD at the moment. That is for a 1 day trade, for the short side I would use a ratio somewhere around TP 56 SL 250 Are you trading the long or short side because it really makes a difference here On the buy side there s very high swap rate -3 13 to take into consideration. Reversal moves are all part of the normal daily volatility in the markets I m of the view that it s better to have a lower leverage so that these events can be withstood because in the scheme of things a 100-200 pip move is pretty insignificant really. Thanks I was thinking through my mistakes, and reading your spreadsheets Essentially the trades I got stopped out was GBPUSD, GBPCAD, EURCAD It is trade timin g SL 250 is tough psychologically I am not going to be able to test 200 plus pips. Actually some profit from the EURAUD, EURNZD I trade several illiquid pairs gbpnzd and also trade short side for some pairs, and hedge sometimes as well. I will look through the win loss ratios, and trades probabilities to examine the trades and see if I can improve on where it went wrong You have got a great resource I was already doing breakouts, grid trading, carry trades for some time, but I still come back because everything was very well written and learn from someone who is strong. Could you write an article on basket trading I have been practicing, don t know if this is something doable on a live account. nice idea thanks steve, i will try this out and see how it works. How to Place Stop Losses and Take Profits Using a Maximal Strategy. When entering a trade, how do you choose the point of the stop loss and take profit Clearly, this decision will have an impact on how profitable your trades are However , did you know that the placement of your exit levels can actually have more of a bearing on your profitability than the decision on which direction to trade. How to choose stop loss and take profit forexop. In the volatile forex market, it is actually true Given how important this decision is, it is surprising how little thought many traders give to this component of their trade. In this article, I want to explain a quantitative strategy that will help you select stops and take profit levels for maximum profit I also want to debunk some of the common misunderstanding around risk-reward setups, and show how following poor advice can ruin a potentially good trading system. If you just want to try the stop loss take profit calculator, and are not interested in the theory, please click here. Why Guessing Stop Losses and Take Profits is a Plan for Failure. A trading position will normally exit at one of two points After entering the trade, either. The price reaches the take profit TP , and the tr ade finishes in profit. The price reaches the stop loss SL , and the trade winds up with a loss. When deciding trade exits, it is sometimes tempting to make an educated guess Some traders use technical features such as chart candles, trends, resistances and supports Others simply choose a fixed ratio of profit target to stop loss. While this is very common, there are several drawbacks. It is error prone When you guess the exit levels for a trade it is very easy to either overestimate or underestimate price movements. It is not repeatable and that makes it very difficult to analyze or improve performance When there is no logic or methodology behind placements of exit points, you never know if a failure was due to a miscalculated TP SL combination or because your strategy is not working. Traders will often move stops up or down on subsequent trades based on trial and error trying to find a sweet spot. It is very difficult to automate methods that rely on gut instinct or other subjective decisio ns. There is nothing wrong with using technical analysis as a guide for timing the trade entry, nor for judging how far the price might move Rather, the method I describe below is used alongside both charting and fundamental analysis. The Fallacy of Using SL TP as Proxy Risk-Reward. Forex trading forums are full of well meaning, yet rather misguided advice about risk-reward setups and how to set your stop losses Unfortunately, many of these people fail to understand the true meaning of risk or reward. The idea that simply setting your stop loss smaller than your take profits will achieve a certain risk reward is complete nonsense. Using risk reward to set your trade entry and exits does not make any sense unless you know the probability of outcomes in a given trade. Take this simple example Suppose there is a lottery costing 1 to enter The prize is 1m By the definition of the nave trader, this gives. By that definition, this would seem a fantastic game to play However, suppose we know that tw o million people enter the lottery This makes the odds of winning 1 2,000,000 one in two million Now we know the odds, we can calculate the true risk reward. True reward risk ratio 0 5.In other words, for every 1 you put into this lottery, you d expect to get 50 cents back Most would now agree this is not a very good game Even though on the nave trader s reckoning, it had a reward to risk ratio of one million. This example highlights the fallacy of using stops and take profits as a measure of your risk reward. In a trade, we have the real risk reward defined by. The Risk-Reward Relationship. The first thing to realize about setting trade exit points is that the amount of profit you want to make on a trade is directly proportional to the risk you will need to take to capture that profit. This is not a supposition, but rather a mathematical fact. Take the following trading scenario Say for example that a trader sees an upward trend on the hourly chart for USD JPY see chart below The trend has b een in place for around one day, so the trader thinks there is a good opportunity for profit. He decides on the following setup. Now let s analyze this trade setup in more detail The first thing to notice is the trader wants to capture a profit of 70 pips on the trade. So what is wrong with this setup. Based on recent price data for this currency pair, we can calculate that USD JPY has an hourly volatility of 26 4 pips That means, on average, the movement of the price over one hour is 26 4 pips Sometimes more, sometimes less but this is the average. Figure 1 Trading example, wrong placement of stops take profits forexop. This means the trader is trying to profit by 70 pips In reality, he is actually betting against the market because he is relying on the fact that the price will not descend more than 20 pips from the open price during the life of the trade That could be up to 30 hours if the current trend continues from Figure 1.Stop Loss Advisor. Chart Indicator. Choosing the right stop loss placement is a critical decision but it s often left to chance This Metatrader tool advises where to place stops and take profits on any order Just set the desired trade time and win ratio and the indicator does the rest. Given the hourly volatility in USD JPY is currently over 26 pips, this much stability in price would be highly unlikely While the trade has a very low maximum loss 20 pips , which might seem like a plus, the chances of it finishing in profit are extremely low. If we know on average that the price of USD JPY moves up or down by 26 4 pips every hour, why would it do anything different for this particular trade The answer is that it would not and the trade would probably strike the stop loss for that reason. Due to the volatility in FX, this is true even if the predicted trend continues. The basic problem with the setup was that trader was trying to capture too much profit without accounting for volatility. Remember that in forex, volatility is not something you can avoid by careful trade picking or a clever strategy It is an absolute certainty. That s why it is far better to make volatility work for you rather than against you. The question then is when setting up a trade, how do you know where to place the exit points other than just taking a wild guess The following will explain how to do this. Calculating Stop Losses and Take Profits Using Maximals. The method I prefer to use is based on a technique known as maximals What this does is give a precise formula to work out the probability of the price moving a certain distance from the open during a given time. This model gives a complete distribution of price moves for a given volatility This method works for any timeframe, minutes hours or even months It also works equally well with either historical past or implied future volatility. In deciding trade exit points, there are three things to consider. The expected timeframe of the trade related to profit target. The market trending behavior. The profit target. Let s take a look at each of these. Step 1 The Time Frame. The type of trader you are will have a bearing on the time that your trades need to stay open to reach your profit target. A day trader or a scalper would hold a position for hours, minutes or even seconds At the other extreme, a carry trader holds positions for weeks, or months For the carry trader, capital gain on the trade is usually less important The goal is to hold the position open for as long as possible to accumulate interest. Clearly then, profit and time are linked So in setting your trade exit points, the first step is know precisely how far the price is likely to move in a given timeframe Once you know this, you will be able to decide a realistic profit target. Take the following example Figure 2 below shows EUR USD over five minute intervals M5 The chart spans a 24-hour period. Figure 2 EUR USD 5 Minute Chart M5 24 hour period forexop. The first thing I do is calculate the volatility over my chosen period From the open close data, I calculate that to be just over 10 pips per 5-minute period. Once I know how volatile the market is, I can project the price forwards to work out the probability of a certain move x hours defined by 5-minute intervals into the future. To do this, I need to calculate what are known as maximal curves see box for an explanation Briefly, taking the volatility as input these curves will tell me the probability of a maximum price either up or down being reached. Figure 3 below shows the maximal curves calculated for 1 hour to 24 hours ahead for the EUR USD chart. Figure 3 Maximal curves for EUR USD M5 - Pip Movement vs Probability forexop. For example, looking at the maximal curve for 24 hours top line , I know the price has a 76 8 probability of moving 62 pips within a 24-hour period Whereas it has a 40 probability of moving more than 141 pips in that same time frame. The Random Walk. I only give a brief description here of what are rather complex calculations The best market model we have for forex is the random step process or random walk. This just means that in every interval, the market moves by a random step value The price can slant towards an uptrend or a downtrend with a drift parameter. Using a discrete unitary step function to model these price moves, the probability that price reaches a certain maximum at any time can be found as. We then transform the price Z using the volatility into a standard unit variable for comparison against the step process From this we create a set of curves for different timeframes. In essence, the longer the time interval and the greater the volatility, the further the price can move from the existing level. From these we can calculate the probability of a price change over any length of time. Hedge funds and professional traders often use maximal curves or some variant thereof The reason they are so important is that they allow you to setup your trade accurately in terms of time and profit capture The curve tells you if the amount of profit you want to make is reasonable in terms of the time span. For example, I know if I wanted to capture a 300-pip movement, I would likely be waiting roughly ten-days based on the current volatility level This is because from the curve, there is only a 10 chance of the price moving 300 pips in any 24-hour period. Step 2 The Market. If the market is flat, or trending in a certain direction this will have a strong bearing on where you place your stops and profits In terms of the model, it means that we have an asymmetric distribution of price movements. There are several ways to allow for this, but the simplest and the one I prefer is to use a different volatility for the upside and downside price model. Maximal curves displayed on chart forexop. The statistical skew is useful here because it tells you how asymmetric the volatility distribution is and allows you to add an upwards downwards drift. Random walk not trending Trend up positive drift Trend down negative drift. With the random walk , up and down price moves are equally likely When trending, two different sets of maximal curves are needed, one for up moves and another for down. Step 3 The Profit Target. Having decided on a timeframe and on the trending characteristics, I can now choose an appropriate profit target that will give my trade a high win probability. Say I ve checked the chart, and decided to buy at the current market level, and I decide my target will be 40 pips and my cut off will be -100 pips. The table below gives the probability of my exit points being reached in each of the three market conditions. Take profit 40 pips. My best outcome happens if the short-term trend reverses, that is if the market rises and makes my buy profitable The worst outcome happens if the trend continues in the same direction trend In that case, I have a 42 chance of the trade ending in profit, and a 47 chance of it ending in a loss. When I set the trade up what I am looking for is the chance of the take profit being reached, to be at least 1 5x the chance of the stop being reached This will give a win ratio of around 70 or higher. Also, remember that if you move the stop loss or take profit while the trade is open that gives you an entirely different set of outcomes. Analyzing the Trade. To see how the stop and take profit levels shift for different trading timeframes, I can work out an envelope, which will give me a fixed win ratio The graph below in Figure 4 shows this plotted out for my example trade. From this, I can see that if I were trading over a 12-hour period, I could choose to set. That would achieve the same win ratio It would also give a lower profit of just 26 9 pips. Figure 4 TP SL envelope for fixed trade win ratio forexop. With my 24-hour timeframe, I can also see how the possible outcomes will change over time. The chart below Figure 5 shows the probability of a win, a loss, or the trade remaining open over 24 hours the expected lifetime of my trade. From the chart, I can see it has the highest chanc e of closing in profit within the first 90 minutes of being opened Thereafter, the chance of a loss rises significantly. Figure 5 EUR USD Trade outcome probability over 24 hour period forexop. This is because the maximal curves become flatter for longer periods If you check Figure 3 again you will see that the curves for 24-hours and 18 hours are quite similar, whereas there is a big difference between the 1 hour and 6-hour curves The highest differential is in the first few intervals where the curves are steepest. Money Management. As shown above, your stop distances have to work in terms of your profit target and the volatility levels. New traders often place stop losses too tight, thinking they are reducing risk The usual reason for this is that they are using far too much leverage and try to reduce exposure by placing limits on individual trades It is better to manage risk through trade size exposure than to use stop losses which don t make sense. Suppose you see a trading opportunity, a nd the potential drawdown needs to be 300 pips to capture that profit If 300 pips is not an acceptable loss, then it is better to reduce leverage and adjust your trade size downwards to give you more flexibility. Instead of trading one lot, consider trading in one tenth of a lot units or lower. What is most important is that a potential loss or drawdown amount on a trade should be manageable within your account This should be part of an overall money management strategy so that you know your loss limits and those losses, even in succession will not cause a margin call or bankrupt your account. Remember, over-leverage is the 1 killer of new forex traders. Stop Loss Calculator. I provide the Excel spreadsheet with all calculations here so that you can download it and try this system out for yourself. For instructions on how to use the sheet, please see here The spreadsheet does not have the live price feed which the MT4 indicator uses, but you can manually paste in historical price data from M etaTrader to work out optimum take profit and stop losses in the same way I ve explained. The MetaTrader indicator, which does the same calculations in real time and includes additional features is also available See below for more details. Want to stay up to date. Just add your email address below and get updates to your inbox. Why Most Trend Line Strategies Fail Trends are all about timing Time them right you can potentially capture a strong move in the market. Day Trading Volume Breakouts This strategy works by detecting breakouts in EURUSD at times when volume is increasing sharply Usually. The Engulfing Candlestick Trade How Reliable Is It You may have seen there are countless articles on the web declaring engulfing strategies are a sure. Keltner Channel Breakout Strategy The classic way to trade the Keltner channel is to enter the market as the price breaks above or below. Momentum Day Trading Strategy Using Candle Patterns This momentum strategy is very straightforward All you need is t he Bollinger bands indicator and to. Why Changing Markets are Where the Real Money is Made All serious money managers know that the smart money is made not when the market is stable but when. A week after Brexit Focus on currencies The BoE also said it was ready to take additional measures if needed The decline of the currency is. Hi Steve Great article Could you please advise how the reward risk is calculated I am newbie and till now I was calculating reward risk by just dividing TP pips SL pips, but learned that it is not right after reading your article I am not able to get the mathematical figure shown in the excel sheet for the target win ratio I selected Could you also please show with an example of how probability trade wins and probability trade losses are calculated Thank you very much. Hello, I really like your article I m wondering, do you have a spreadsheet for calculating maximal curves Like in Figure 3 I ve downloaded the Stop Loss Calculator excel file, but this one is not t here, or at least i cannot see it. That graph is from a different spreadsheet It may go in one of the online tools at some stage. Hi Steve I was looking for a solution for Stop Loss placement and came across your article Thank you for what seems to be a great solution I do not use MT4, but have been able to export the historical dat My only challenge is that I cannot paste the data in the provided columns, as the cells are protected How do I get around this i e Can I get the password. A password isn t needed This happens when you are pasting in too many rows for the range Just clip the rows to the max number allowed and it should be fine. Hi Steve, hope you are doing well Awesome indicators I love how everything is mathematically explained and makes great sense I have a math engineering background Already purchased a few of the indicators and looking for my next one to buy. For this Stop Loss Take Profit indicator, is there any reason that 288 periods were used for generating the outputs. I find that most trends on the pairs I trade move in 20-30 period cycles, so I use that as the sampling period so I can for example bring up a 15 min chart and have an SLTP value that coincides rather than use a longer period and have to consult the shorter timeframe for SLTP values Is that too short a period. What would be cool is if shorter timeframe SLTP values could be displayed on the longer timeframe chart. Hope what I wrote makes sense Thanks. There s no special reason for the period 288 other than it s one complete day in the M5 chart It s also within the limits of where the calculations will work About 20 to 1000 intervals is the optimum. The formula to estimate any trending bias is based on a measure of upward downward volatility In the examples above maximal curves a flat market model was used This doesn t mean no trending it just means there s no prior assumption about direction of the trend. Steve, thank you very much for this article As per wikipedia , the second part of the fac torial should be n-m, not m n Is this a typo, or I do miss something Thanks. The formula I ve shown in the box above is that for finding the probability of a maximum point being reached in a random walk that is any point at or below the maximum I checked this just now with the Wikipedia version and in fact unless n the time you are looking forward is very small the two formulas n m or n-m give identical results This is because of the symmetry of the combinatorial function But the right one according to the reflection principle is n m There s also the special case to use n m 1 where the parity is different in m and n And because of the symmetry m n 1 is identical to n-m Again unless n is very small this won t make much difference to the numbers if you use either n m or n-m. Thanks a lot for the explanation Could you also kindly explain how m is related with the 62 pips As I understand it. n total number of steps m the number of steps needed to touch 62 pips. In the formula we know what is t he probability that the max will happen after m steps, but how is this related with 62 pips How do we know that this is 62 pips and no more less Thanks. The pip movement depends on the scaling factor in the random process That scaling is governed by two things. The time period for each step for e g if it s 5 minutes, 15-minutes, 1 hour or whatever. And secondly the volatility because that will tell you the expected movement in the random process for a given time step. From that you can work out the expected distance and convert to pips or percent. Hi Steve do you happen to know the financial theory that happens to have a close connection with the stop loss order very nice article. The underlying theory is most always based on stochastic probability models This is used to characterize price volatility and risk In the basic theory a characterization of volatility is found and this is then used as way to model the price development That being in terms of a probability distribution that allows s ome kind of forward prediction But there are plenty of others which cover more obscure areas. There s also distortion risk models which try to model long tail events For example the process of stop losses distorting prices as certain levels are hit or of high-impact low probability events that fall beyond conventional models. Financial risk management and VAR theory is a good starting point. Hi, Maybe you are planning mt5 version of this indicator I already have mt4 version, but mt4 is a lot slower in backtesting Have a nice day. They said mt5 is faster Cannot say have seen a difference yet in my backtesting but I guess it depends what you are doing. There isn t an MT5 version at the moment, maybe later on if there s more demand for it. A very interesting article. On Feb 23 2015, you gave the equations for p win , p lose p open in an answer to BYO2000 Most of it makes sense to me, but can you please explain how to arrived at the equations for p win first and p lose first. Sure This is a condit ional probability using standard theory. If the price touched both the stop loss and the take profit during a time frame then there are two distinct probabilities with that set Either it touched the SL first or it touched the TP first during that period Hence the two different cases to count for this. Great job, but I personally don t trust that much the random walk theory It states, that future princes are normally distributed and the probability to take each value depends on the standard deviation volatility in this case. Based on that, how can big price fluctuations be explained For example, taking random walk as an absolute truth, it would be extremely bizarre to see prices fluctuations above 3 3 times the volatility since probability is less than 1 but if you look at the market it has happen quite a lot. If you required the specific examples let me know I will show you. I want to know your opinion about this, and if is possible, have an idea of how efficient is this strategy when you u se it. I completely get where you re coming from A lot of people especially technical traders don t agree with the RWM That s their opinion I am not going to spend a lot time defending it as there are people out there who can do a lot better job than I can Though what I can say is that much of the criticism I ve seen is unjustified or just plain wrong What you say above only holds true if you assume that volatility and drift in the model never changes Actually though these components are changing all the time. Volatility measuring is by definition lagging so you can never know what the instantaneous volatility is You can only estimate it based on information available at the time So when you say a 3x volatility move, what that really means is 3x what the volatility was in the past Not what it is at a given instant This is a limitation of measurement not the model As I mentioned in the article implied volatility can give you a forward measure and that can be used instead. So far RWM is the best and simplest explanation of market moves I have yet seen If something better comes along I ll be the first to use it I ve seen advanced simulators and I can tell you that you can t tell the difference between them and any other price chart every type of chart pattern is seen and is reproducible The word random just seems to be a red flag to a lot of people But the RWM has both a deterministic and non-deterministic part and it s the deterministic part we try to discover and trade on. Hi can you explain how to upload new metatrader data in the excel spread sheet please Thanks your help is appreciated. I would be grateful if you could perhaps give a more detailed explanation as to how you calculated the maximals table as used in your Excel Worksheet. At first glance, it does seem to be related to some form of cumulative function of the p Yn m probability you mention in the Random Walk explanation box maybe some kind of cumulative distribution function, but it is not described here. I re ad the related material and links provided about the Random Walk , as well as other sources of information by different authors, but can t seem to find anything that would explain how you calculated the maximals table. The maximals are a forecast of how far the price is expected to move maximal distance over a certain time That s taken from the random walk model with or without a drift component The drift gives the trend so that allows the model to forecast changes in different directions other than a flat market There are standard mathematical procedures for working this out and creating a discrete time-based probability distribution from it From that distribution it s possible to work out the probability of a price move within a certain time interval. There s some more discussion about it here Duke uni also has a lot of good info on this subject The above papers are giving an overview. There s something I don t understand Your chances of winning are higher let s say 68 3 to cite your ex ample , but the amount you would win is lower 26 9 than the amount you lose -67 3 This leads to a negative expected return. So, if you run this strategy many times you ll end up losing money, right. You also have to account for the probability of the trade still being open There s an 8 probability that the price doesn t reach either the stop or take profit and that accounts for the missing value in the expectation So the value 1-0 683 in your formula doesn t account for all other outcomes which have to be integrated over to find the true expectation There s always a finite probability that the trade will be open however long you wait If you look at figure 5 for example the p open graph gets smaller but it never quite becomes zero In either case this is a truth of computation it s not something that applies just to this strategy. Indeed, the expected profitability of a trade if I am not mistaken should be an integral of an asymmetric capped maximal curve Have you per chance made this compu tation in your testing, as I think this is the most relevant quantity to optimize on. Another thing is that this is still very simplistic in the sense that the construction of your stop loss and take profit are based on how you built your signal My understanding is that the signal you built is a simplistic version of something along this line if you feel that the market is overselling an asset downward trend you will buy hence the trend and trend - that were not very intuitive on the first reading Then wanting to build your asymmetric maximal curve makes sense since you look at an asymmetric volatility which kind of tell you if the trend was fundamentally stopping and the future was noise, I can still expect the market to trend lower by x pips due to underlying volatility I am not sure the way you measure it though makes sense given that in fact, what you want to look at is the volatility of the price if there were no trend going on, which will give you limit that will be breached quickl y if the trend was to continue and the prediction was wrong I feel this is in a sense a better way to include the potential signal into your stop loss, as the stop loss should then be tighter but on a justifiable note. Overall I quite like the ideas you expose here, but I feel the main point which is the expected return computed from the integration of maximal curve is missing, as this is what is verifiable in live trading or backtest. The more interesting question to me is the reverse hypothesis That being the maximum likelihood estimator MLE of the trend and volatility given a noisy sequence of prices Because without knowing this any expected return would in any case be zero when you cannot make any prior assumption on trend direction the deterministic and you have a symmetric range of probabilities Solutions to the MLE can be found but that does mean using Monte Carlo simulation or something similar since there are no closed forms to this problem This is something we are working on. Do es that indicator work on anything for e g on CFD or just forex. It should work on most instruments including CFDs Metals, Oil and so on If you have any problems just raise a support request. i think if you use rrr like this, this 82 tp probability also cant do any help for our accounts, but may be this is what us new traders want to hear, wide stop loss and tight take profit, it is alluring for newbies thanks zkan izmir Turkiye. Nobody here is recommending an sl or any other value The article is an analysis of the stop loss placement and what result that is having on your rr and on probability winning or losing the trade If you had read further than para one you would understand your remark has no logic but is the view of the amateur. Great article-thanks very much Is the spreadsheet still active so that historical data can be copied, or has it been protected since the last posts I have Excel 2010 but there is no apparent way to paste data in the Input tab. Yes it is still active No, it s not locked But to edit you will need to save a local copy This is because Excel 2010 and later will disable edits for any spreadsheets downloaded from the web If you are still having an issue with this please use the contact form to get in touch and I ll take a look. Thanks, the problem seemed to be with Excel 2010 I tried 2013 and it works fine. Hi, I was wondering how the maximal curves are built using estimated volatility given 5m volatility of 10pips, so volatility for 24hr s5 sqrt 24 60 12 0 01697pips Then for P X TP we can use z x-mu s24 and Pr z TP-mu s24 , for TP 40pips and mu 0, im not getting 82 probability but 100 I m not sure this is the right way to do it Wondering if you could point me to how to build those curves. Please see reply below. Hi, nice article I m trying to understand it I have a question about how sample volatility is used in the calculation of maximal curves. Am i supposed to approximate the binomial dist with std normal using z x-mu s x s if mu 0, s 0 001 then c alculate P z c where c is TP So if s5 0 0010 per 5m, we get 24hr volatility as s24 s5 sqrt 24 60 5 0 01697, if target price is 40pips then is P x 0040 or using z, P z 0 0040 s24 but this doesn t give me 82 chance of reaching TP. Further, doing this only gives me the prob of z being above c at the end of the holding period but that s not what we want, we want to find P z c at any intermediate time Would be great if you could explain. It is a cumulative probability of maximal distance traversed in a certain time So by that definition it covers all intermediate times between such as P z c in your notation I would also calculate the 24 hour volatility directly if that is what you need, rather than trying to scale up from 5M timeframes. Excuse me Steve. is this spreadsheet valid only for the EURUSD pair I tried to use it with AUDUSD values but got thousands pips large TP and SL While with EURUSD values it works perfectly. Yes it is compatible with AUD USD This problem is most likely due mixed da ta histories Please ensure all of the old data is removed and reset the pip value selector. Alternative you can use the MT4 indicator which is now available and does this for you. This is a very detailed article and confirm to me what I thought when I approached the Forex market after a short period of trading You mentioned at the end of the article that you have also an EA that make the same calculations of the TP SL as your great Excel spreadsheet and I would be very happy to integrate it in my own EA used to trade Is it available for download free Does it work on live data taken directly from MT4 without the need to export them Thank you very much for your answer and for your website. Yes it can work with a live price feed It could be made available as an MT indicator in the future but that would depend on the interest as it would need to be recoded. is this spreadsheet valid only for the Pounds pair. It should work with any pair If you re importing data from Metatrader please make sure the sizing is correctly set in the data tab. Hi, I can t paste right, I mean when I copy historical data from MT4, and paste it to input as you said, there are no spaces between the comma, and it is not divided as on your picture In your picture each cell gives one information like date, etc, but when I paste it the information starts in one cell and ends in another I have new excel, what should I do Regards, Micha. If your data is all in one column as it sounds then you need to use the text to column function in Excel to format it into separate cells If you saved it and opened it as a csv file it would normally do this for you. One of the best articles I ve found on stop and profit targets Thanks for sharing your knowledge with a newbie like me. problem with excel file can you upload it again. You will need Excel 2010 or later otherwise some of the features will not work. Hi, I can t paste the same as you when I use data from MT4 The numbers start in one cell and end in the other I have new excel What should I do. That s a very nice of you Mr Steve According to calculating volatility and RRR, I am wondering that as a day trader with a very short horizon period of investment Ex 5-15 Mins chart This method could be potentially help any trades Why I said so What being said is that If I my trade set up were 2 1 RRR, which I have to set my SL at -200 and TP at 100 In the long run, do you think this kind of statistic will help the trades to win Literally, taking a smaller pips and widening a SL could really boost up a winning percentage which means that once I losses such any single trades I have to try to double up profitability to cover such losses Here come to my question, in this kind of situation that I earlier mentioned, do you have any way to fix it or if the theory you mentioned works, how could you adapt to use with scalping trader and day trader style Thank you very much for your consideration in advance. It s a good point and one I should have expanded on in the artic le In my opinion it doesn t make a lot of sense to have a fixed ratio of SL to TP for all cases The choice should be dynamic because it depends entirely on the situation you are trading and the market conditions. A breakout trade for example may have a low probability of success but a high payoff As well it is usually clear after a short time whether the breakout is going to happen or not In that case it doesn t make much sense to allow say a 2 1 SL TP which would allow a big drawdown When in fact if the draw happens you already know the setup has failed In other situations the reverse may be true. Great article Can you explain why you calculate volatility on open close data From the open close data, I calculate that to be just over 10 pips per 5-minute period Why don t you use the ATR or high low data I m trading daily charts, so the difference is quite large. You can use ATR You can also use the Bollinger bandwidth as a vol measure Whichever you use you should get roughly the same ratio of TP SL however because the measures are relative to each other and not absolute If you need to calculate a specific probability then in this case some calibration is needed depending on which vol metric is being used. thank you for your good strategy i have question i tried to calculate probability for volatility of 10 pip per 5 min for 1 hour for distance 51 which gave us n 12 and m 6 for box formula but i calculate 5 for probability and from your curves it seems true percentage is 15 can you tell me why my result are different thanks. Your value seems too low Because these are probability functions the curves need to be worked out as a cumulative value of the function not the point value over the move distance you are looking at. Probably the best forex article I ever read. Hi, very nice and useful article I was wondering if it was possible to have a numerical example of how to calculate the probability using random walk In your example, are you assuming a drift component 1 Or less Th ank you in advance Bye. Where s the EA. You can have the price rising then falling in which case it passes a TP AND SL For eg If you have very close TP SL then these have near 100 chances of being hit If you imagine a space of outcomes you have. p SL only hit P TP only hit P SL and TP hit P Neither TP nor SL hit. ECB EURNZD, EURAUD, EURGBP, EURCAD whipsaw upwards before collapsing The greatest one was the EURGBP this time round. One either widens their SLs 150-200pips for crosses or tightened stops risked a larger loss when it hits the SL Other than staying out completely. Prior to ECB, EURCAD went to low of 1 36945 The whipsaw touched SL of 1 3765 before retracing downwards For a short position, adding a Stop Loss gave away profit of 70 pips Does assigning probability described applies to risk events like ECB. The EURGBP is now back at the same level, though it whipsawed the most. What s your view about contrarian trades that agrees with TA at the time you look at it example would you have longed the EURNZD on Mar 5, would using this probability analysis tell one not to long but short it instead although the charts are long Measuring the strength continuity of reversal moves. Cheryl - Does assigning probability described applies to risk events like ECB. Not unless these events occur frequently within the time sample you are looking at, but even then its unlikely you could ever model them to predict an outcome Major news releases those with very high impact are by their nature unpredictable and can will change the trajectory of the price in ways that are beyond normal statistically analysis. Cheryl - What s your view about contrarian trades that agrees with TA at the time you look at it example would you have longed the EURNZD. Absolutely, contrarian trades can and do work but then there are limits, I would be cautious about trading contrarian against strong fundamentals For eg, I wouldn t long EURNZD simply because of the swap yield of -4 24 on the long side The strong downward trend for the last six years is a reflection of that But then if you re scalping a few pips here and there it can make sense, and sure the Euro is going to turn sooner or later. The maximal curves show the probability of how many pips price will move in either direction right I don t quite get how the curves can be applied to just TP eg if we want to know the probability of TP of 40 pips in 24hrs, yes the curves do give a probability of 82 , but wouldn t it be 40 pips in either direction ie 41 of 40 pips 41 of -40 pips because I m assuming the curves have no drift, a walk in either direction is equall y likely, etc Maybe I m missing something apologies if it s a dumb question Thanks. No only in one direction The maximal curve will give the probability of a maximum point being reached, or equally if you apply the formula on the other side, to a minimal point being reached When symmetric as you say, it is just mirrored. So for eg P Z 40 pips gives an independent probability only of the price moving above the 40 pips level It says nothing about the price falling say 200 pips below, this is why there is a separate case for the SL point. With no drift, yes it would be the same 41 for a move either side. apologies again, I m a bit slow let s see if I got this The SL is a separate case So just considering the TP, what the maximal curve shows is P Z 40pips P Z 40pips 41.Not quite What the maximal curve basically shows is the probability of a high-watermark being reached and that applies for a certain time period only So say you want to know the probability of the price going 40 pips or higher within 24 hours That s P Z 40 pips from the 24-hour curve it s 82 After 1 hour, its 28 thereabouts, I am just looking at chart not in Excel. Thanks for your patience Steve. It was probably my fault, but my previous comment was strangely truncated What I wrote was to ask if the maximal curves show P Z 40pips P Z 40pips 82 If so, doesn t that also imply P Z -40pips 82 , which surely cannot be I m lost here. You are welcome. I have to answer here because its not possible to add a reply any deeper it will be better to continue this in Forum section where there is more room. byo2000 What I wrote was to ask if the maximal curves show P Z 40pips P Z 40pips 82.There is no addition here did you mean P Z 40pips, it gives this as 82 from the curve This tells me only one thing in isolation that the TP has 82 chance of being struck. Very cool idea great article I have some questions In Step 3, can you explain how you got the table for p win , p loss , p open Thanks. Sure It s standard probability theory. Say p wl P price hits SL TP. P wl p TP hit x p SL hit p win first p TP hit x p wl p TP hit p SL hit p lose first p SL hit x p wl p TP hit p SL hit p win p TP hit p lose first p lose p SL hit p win first P open 1-p win - p lose. Thanks Steve I love your articles. Could you commend on reversal moves Trades such as EURAUD on 20 Feb hit a low of 1 4385 and spiked upwards to 1 4583 100-200 pips reversed moves can be pretty tough psychologically to place stops where you don t want them too close, yet when it hits SL it erased off those hard earned gains or puts one in steeper losses. I was in some other trades that reversed off its lows As I read your posts, I know we are going down to really precise levels now That -100 stoploss can take place in a very short span of time and hurt quite a bit if one s position is in several trades at the same time. EUR AUD is quite a volatile pair, with about 50 higher volatility than EUR USD at the moment. That is for a 1 day trade, for the short side I would use a ratio somewhere around TP 56 SL 250 Are you trading the long or short side because it really makes a difference here On the buy side there s very high swap rate -3 13 to take into consideration. Reversal moves are all part of the normal daily volatility in the markets I m of the view that it s better to have a lower leverage so that these events can be withstood because in the scheme of things a 100-200 pip move is pretty insignificant really. Thanks I was thinking through my mistakes, and reading your spreadsheets Essentially the trades I got stopped out was GBPUSD, GBPCAD, EURCAD It is trade timin g SL 250 is tough psychologically I am not going to be able to test 200 plus pips. Actually some profit from the EURAUD, EURNZD I trade several illiquid pairs gbpnzd and also trade short side for some pairs, and hedge sometimes as well. I will look through the win loss ratios, and trades probabilities to examine the trades and see if I can improve on where it went wrong You have got a great resource I was already doing breakouts, grid trading, carry trades for some time, but I still come back because everything was very well written and learn from someone who is strong. Could you write an article on basket trading I have been practicing, don t know if this is something doable on a live account. nice idea thanks steve, i will try this out and see how it works.
No comments:
Post a Comment