So I'm trying to figure out this metric that I saw in one of the webinars from futures io.
At minute 25:30 he starts going into detail about the BSO metric and I took notes, but still can't seem to understand the equation. Can anyone help me with a calculation for this metric. I can't seem to find anything on the forum, stage 5's website, or google.
So far my interpretation, which I think is wrong and significantly skewed is this:
A. Tells how were doing in trade placement to mitigate risk.
B. Need minimum of 2 contracts to scale out.
C. BSO only occurs when a trade moves in your direction
1. Average entry price
2. How far did market move in your favor before you were able to lock in the best exit?
3. Calculate each trades max scale out (in profit $) and divided by # of trades to get BSO #
4. Find BSO % by (mean divided by highest number) * 100
5. Ideally, you want to be about 60% BSO. If above 60% you want to squeeze more out.
I don't think I'm doing it right. So is it only calculated if my profit target was hit? So if my profit target gets hit then my scale out gets hit every time then I should be looking to set a higher scale out target? How do I calculate that?
This metric sounds like a good one to use, I just need help learning it if anyone knows!