Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
first of all, thank you for all the valuable information in this forum.
I have recently stumbled upon some automated trading systems on YouTube. Some of the algos used traded until they hit a fixed profit target. When aiming for a specific profit target it is easy to adjust the parameters of the trading system to create a nice steady equity curve for the day - when showing the results after the markets have closed...
I wonder if profit targets are used by other traders with automated trading systems as well? I mean, if you have found a correlation between the occurrence of a specific pattern and the market direction/reaction, then why stop trading if you have your target hit? Of course, you need to evaluate when your trading system has the least drawdown and therefore e.g. only trade the high volume sessions during the trading day or find other ways to protect the algo from overtrading. But is a profit target a good choice to do so?
Thanks in advance!
Can you help answer these questions from other members on NexusFi?
1. "fixed profit target" is not quite correct rather thinking of profit target to deploy an automated trading-session is correlated to RISK factor as an example the target is 1000 with a stop of -300;
2. "overtrading" perhaps should be protecting the automated trading-session from placing too many orders with an insignificant result [cost of trading becomes a burden]
As a solvency and for influence [see #AHR123] I was just looking at Exponential growth [see link bellow] to monitor the PNL and trigger a change in a robot behavior/mechanism in that an opportunity and its pair the recipe are not adequate for such market. https://en.wikipedia.org/wiki/Exponential_growth
Concluding that even a robot should quit if his libraries/abilities do not work on certain market-conditions. Backtesting most likely will show a good ratio if such robot stops and wait for another day-session.
AHR: If one doesnt see an opportunity ahead (PHI/PLO), one cannot find a recipe, while the signal is the middleman just a robot.
See attached pdf.
AHR20200721
Oh, forgot to address the “why stop trading” there are many “moving parts” and the said profit target can be override by “Stay There” one example is in this chart [here] that a good-short doesn’t even touch the MA-line.
Attached is a collection of 7 NonLinear Moving Averages and their functions for easy use in backtesting. Every indicator also contains an option to color the line to signal up and downtrends, and the user can specify these colors.
This pack include the …
I use fixed targets for profits and stops in every algorithm I run. As a rule of thumb, both my stop losses and profit targets are usually the same, for example allow for 2% movement in either direction. This rigidity keeps me sane when running more than 10 algorithms and it still brings in profits, as long as my win rate is above 50%.
