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Moving SL to BE is very wrong/noobish

  • #21
  • Jun 26, 2010 1:25pm Jun 26, 2010 1:25pm
Quoting Brb-Fraudin
You have a system that every 100 trades , it wins 70 and loses 30. So you boldly assume that moving SL to BE will make you lose only 25 and win 70 ?? Why not lose 30 and win 65 ?? How do you know that when price returns to its entry point there is more chance it will hit SL than it will hit TP ??
Well those aren't exactly the numbers. But I've tested this, and it only seems to affect some systems. As people have said before, bringing your SL up anywhere too soon reduces the "wiggle room" and can cause trades to stop out. At BE, it means you stop out w/o a out profit. But that's only true if you do it too soon.

From my research, each pair tends to exhibit an "amount of no return" for each time frame where if price goes too far, it rarely (5% or less) comes back. That human sentiment has a certain elasticity to it per time frame, beyond which price doesn't retrace.

Quoting Brb-Fraudin
If you entered at S/R area or a break of S/R , there is more chance that price will bounce in you favor again , not the opposite.
Last time I looked into this, some 80% of SR entries get retested. And there are, in fact, numerous areas where price does not "bounce in you favor again."

Quoting Brb-Fraudin
A system with high percentage of winning , when price returns to the entry , why do you assume it has more chance to hit SL than TP ??!!
I don't, that isn't the point of money management. MM yields no edge advantage.

Quoting Brb-Fraudin
And saying the signal is false ??
Money management isn't a signal. And even the best laid plans can go awry.

Your argument wasn't that "SL to BE sucks" but rather a very specific subset of that, that SL to BE equates to a new open trade. You aren't supporting that conclusion here.
  • #22
  • Jun 26, 2010 1:39pm Jun 26, 2010 1:39pm
To BE or not to BE - that is the question.
  • #23
  • Jun 26, 2010 4:18pm Jun 26, 2010 4:18pm
I believe moving SL to BE is a good idea if you know when to move your SL to BE.
  • #24
  • Jun 26, 2010 8:54pm Jun 26, 2010 8:54pm
The OPs choice of thread title should provide the OP with an opportunity to contemplate his or her own weaknesses.

On the subject of moving to BE there are some things I could suggest:
- auto system tests tend to prove that it isn't optimal (at best) but they don't take the development of traders and their issues and mindsets into account
- the positive attribute of be+ moves is psychological and reduces pain associated with turning a winner into a loser

IM experience moving to BE+ is a bad idea for almost all trading strategies in terms of profitability. If you want to gain the psychological benefits of be+ then a better approach may well be to take 1/2 off at some portion over 1x the risk to your stop and manage the other half, without pressure, to return whatever the market and your strategy will give you.

But everything needs to be tested - you might have a strategy where the be+ approach is a near optimal strategy. What type of moves are you trying to capture?
  • #25
  • Jun 26, 2010 10:22pm Jun 26, 2010 10:22pm
Quoting eagle4x
To BE or not to BE - that is the question.
LOL, actually read this on a bar room wall (college days),

To do is to BE, Plato

To Be is to do, Socrates

Do be do be do, Sinatra
  • #26
  • Jun 27, 2010 8:01am Jun 27, 2010 8:01am
Speaking of EA.
http://www.forexfactory.com/showpost...1&postcount=64

Thats a post I made 2 months ago , where I found by back-testing that by not moving SL to BE the winning % is higher.

Thats just an example , I am sure there are lots of EAs that can work better by not moving SL to BE.

People work really hard to find the perfect entry setup , while the exit (setup) , not much hard work.

Moving SL to BE is a lazy method for an exit strategy.


I can post a proof using elliot waves that you have less than 20% of chance that your entry can have a long run of pips.
  • #27
  • Jun 27, 2010 8:02am Jun 27, 2010 8:02am
Quoting kiwi_trader
The OPs choice of thread title should provide the OP with an opportunity to contemplate his or her own weaknesses.

On the subject of moving to BE there are some things I could suggest:
- auto system tests tend to prove that it isn't optimal (at best) but they don't take the development of traders and their issues and mindsets into account
- the positive attribute of be+ moves is psychological and reduces pain associated with turning a winner into a loser

IM experience moving to BE+ is a bad idea for almost all trading strategies in terms...
Strong vouchers: posts ratio
  • #28
  • Jun 27, 2010 9:11am Jun 27, 2010 9:11am
Quoting Brb-Fraudin
Speaking of EA.
http://www.forexfactory.com/showpost...1&postcount=64

Thats a post I made 2 months ago , where I found by back-testing that by not moving SL to BE the winning % is higher.
You fail to realise that the main task of a trader is to reduce his drawdown! The winnings don't count, an experienced trader knows it. It is easy extremely easy to find methods to increase them exponentially but in the same time extremely difficult to keep the drawdown small enough.
There are ways to protect your winnings without moving your SL to BE, like taking a part of profits after a certain number of pips. You can anyway argue that this technique will also decrease your winning%.
  • #29
  • Jun 27, 2010 11:19am Jun 27, 2010 11:19am
Quoting Sauron
You fail to realise that the main task of a trader is to reduce his drawdown! The winnings don't count, an experienced trader knows it. It is easy extremely easy to find methods to increase them exponentially but in the same time extremely difficult to keep the drawdown small enough.
There are ways to protect your winnings without moving your SL to BE, like taking a part of profits after a certain number of pips. You can anyway argue that this technique will also decrease your winning%.
When you do a hard work to back test your method with different exit strategies you should find the optimum exit , which is far from moving SL to BE.

You said close parts of profit to control drawdown , but do you close parts of loss when a trade turns negative?? To control drawdown ?? I rarely see someone closes parts of loss when trade goes against him.
  • #30
  • Jun 27, 2010 11:34am Jun 27, 2010 11:34am
Quote
When you do a hard work to back test your method with different exit strategies you should find the optimum exit , which is far from moving SL to BE.
... which is called curve fitting.
If my SL is hit it means that the market went hard against me. My first TP is where I consider that the market can make the first turn against me. So I protect my capital as soon as possible by taking a part of profits from the table.

Quote
You said close parts of profit to control drawdown , but do you close parts of loss when a trade turns negative??
No.
Anyway, I understand what you meant. I take the full loss but I decrease the winning.
After my simulations this approach is not a bad thing, as from a mathematical and psychological point of view I prefer to lose big rarely and to win small and often than the other way around.
  • #31
  • Jun 27, 2010 11:35am Jun 27, 2010 11:35am
Quoting Brb-Fraudin
.. I am very good in math and statistics because of my electrical engineering career....

two lots , with both TP 30 pips. One hit TP , the other you move SL to BE. The 2nd lot hit BE , no problem , you still got your 30 pips , right? WRONG!

Thats what you did : You had +60 pips in your equity for the 2 lots , when you moved SL to BE for 1 lot, it ONLY means you opened a random new trade with -30 SL , when it hits the SL at BE , you lose 30 pips from YOUR money!!
Man what an advantage electrical engineers must have in fx!!
  • #32
  • Jun 27, 2010 11:43am Jun 27, 2010 11:43am
Hi I just finished doing a back test for my own system it uses 1:2 RR risk 1 reward 2 and
And I did two tests one with BE when the trade reached 50% of the target, and the other one without BE. Sl 50 tp 100
Here are my results :

Without BE
Win = 45
Loss = 49
(45 x 2 ) - 49 = + 41

With BE
Win = 37
Loss = 34
Loss à BE = 15
Win à BE = 8
(37 x 2) – 34 = + 40


As you can see there is one less win over the 96 trades when using BE .
These results are not enough to come to any conclusion but I did notice that the DD on the BE strategy was less in comparison to without.
If more people could post up results in a similar fashion we could come to a reasonable conclusion as to whether it is worse or better, from my results I might actually change my strategy to BE as the MAX DD was more controllable
  • #33
  • Jun 27, 2010 12:18pm Jun 27, 2010 12:18pm
Quoting Sim
Man what an advantage electrical engineers must have in fx!!
It doesn't . I said:
Quote
But I am very good in math and statistics because of my electrical engineering career
Being good in statistics will give you a help in FX. Thank you ,try again.
  • #34
  • Jun 27, 2010 12:21pm Jun 27, 2010 12:21pm
Quoting Brb-Fraudin
Being good in statistics will give you a help in FX
here's to hopin, eh
  • #35
  • Jun 27, 2010 12:36pm Jun 27, 2010 12:36pm
The OP's original statement is generalized and broad and without looking at it in context of specific trades is meaningless. You can't just wrap up anything in trading in a neat little box and expect it to be the end all. CindyXXXX said it best:

"there's no one way to trade and sometime BE may be necesary and other times maybe not - but it of course depends on the person, strategy , time of day, market conditions, expectations, imminent news, importance of news etc etc"

He did get one thing right though:

"I am by no mean a pro trader or something."
  • #36
  • Jun 27, 2010 12:40pm Jun 27, 2010 12:40pm
truth right there lonestar
  • #37
  • Jun 27, 2010 12:46pm Jun 27, 2010 12:46pm
Quoting Brb-Fraudin
It doesn't . I said: Being good in statistics will give you a help in FX. Thank you ,try again.

i happen to agree being good in statistics does give you and advantage in fx. understanding out come of probability certinly gives you and advantage.
  • #38
  • Jun 27, 2010 12:50pm Jun 27, 2010 12:50pm
Quoting Dutch_trader
i happen to agree being good in statistics does give you and advantage in fx. understanding out come of probability certinly gives you and advantage.
there's good at statistics i.e. you can conduct anovas and t tests etc etc.. then therre's just simple simple common sense, where people like to cater to their egos by stating they are awesome at stats, lol
  • #39
  • Jun 27, 2010 3:58pm Jun 27, 2010 3:58pm
Quoting Sim
there's good at statistics i.e. you can conduct anovas and t tests etc etc.. then therre's just simple simple common sense, where people like to cater to their egos by stating they are awesome at stats, lol
I would say im good at stats. but in forex i tend to use basic stats a little bit of standard deviation and probabilities thats all.
  • #40
  • Jun 27, 2010 4:09pm Jun 27, 2010 4:09pm
Quoting Dutch_trader
I would say im good at stats. but in forex i tend to use basic stats a little bit of standard deviation and probabilities thats all.
Interesting, well I would then class probabilities in that common sense sorta pile, it's just straightforward number crunching,,just raw material, there's no stat analysis going on etc.. just people love to become overnight staticians lol!

STDEV is where i can understand that actual stats come into it..finding deviation from the mean is handy and not something u can do from glancing at the tables

it's like looking over the stats of a basketball player, so you get a rough field goal % and go BAM i'm doin statistics lol.. if you run equations and locate something like stdev then you are finding that additional info only available by doin stat analysis
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