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Why You Should Be Careful With Too Small Stop-Loss In the past, I met several traders, that experienced live results completely different from their backtest results. The cause was a seeming triviality - too small stop-loss. Let me explain to you today, why this can be a problem, what to be aware of and how to avoid this danger. The following topic is just about those breakout strategies that are using STOP order to open a position and, at the same time, they are using too small stop-loss (this article is not about strategies using market order). What is too small stop-loss? Well, it depends on the market and the timeframe. But in general, it is a stop-loss smaller than the size of an average bar of our main timeframe. Let me give you an example - if we are using a 30-minute chart with an average bar value 250 USD, and our strategy is working with an 80 USD stop-loss, we are heading into a serious trouble. The live trading results might (and in most cases almost probably will) be totally different from those that we have from the backtest. Let's take a look at the reason why. This problem occurs when the stop-loss is so small, that some of the trades have entry order and stop-loss on the same bar. Let's say we have an entry STOP order on the price 100 and also a stop-loss on the price 99. Now, imagine that the bar opens on 98.7, it goes to 100.1 and we open the long position - and the stop-loss is set up to 99. And all of this happens within the same bar - i.e. within this one bar, the entry order is activated, the position is opened and the stop-loss is set up. Now it is important to understand why this can be potentially a dangerous problem. It is quite simple. There are several backtesting platforms which are not able to recognize, with the wrong setup or when the data resolution is not fine enough if the stop-loss was or wasn't hit on an entry bar. In other words, there are certain situations when, in reality, the stop-loss was hit right after the position was opened, because right after the activation of the entry order, the market starts heading south. However, our backtesting platform evaluates the trade as a profitable one (from now on I will write about TradeStation as it is a platform that I primarily use). How is it possible? Let's continue with the demonstration of the situation described above. In this situation we can see the rising bar, i.e. the one that has a close price above open price and, at the same time, the close is close to its high.There is an assumption that the bar was raising the whole time and TradeStation assumes that the "inner" move of the bar, i.e. the way the bar was generated, was constantly rising, a straight line. TradeStation is simply following the logic that when the bar closed close to its high, the process of generating this bar was rising. In such situation, TradeStation assumes that the bar opened on 98.7 and the price was continuously rising to 100.4. And during this time, it also activated our buy order on the price 100. Nevertheless, this is very inaccurate and dangerous assumption. What if the bar was first rising, activated our purchase order, but then it reversed and went back down, below our stop-loss, and then started rising again to close to its high? This is a totally realistic scenario that is happening every single day and that would result in a clear loss (right after we open the position) - and yet, TradeStation (and potentially also other software), defines the situation as if there wasn't any correction inside the bar at all. So no stop-loss was hit and trade ended up as a profitable one. This is the root cause to major problems as in the backtest you clearly see a lot of profitable trades that, in reality, would end up as losses - and right after we start trading this strategy live, everything starts falling apart... Protection #1 Luckily the situation isn't so serious as it looks like and the backtesting platforms, in general, take this risk into consideration. The first protection against this threat is simple and, to a certain level, highly efficient. TradeStation calls it LIBB (Look-Inside-Bar-Backtesting), others call it different names, like Bar Magnifier. The point is that when you turn on this feature, the program looks inside the bar to the level of the finest available data resolution (in most cases it is 1 minute), if there wasn't any inside correction after the entry order was activated, or if there was a correction on the same bar when we entered and the stop-loss was hit. Despite that it sounds like a great solution (which is today a standard part of most platforms), it doesn't have to be sufficient when it comes to small stop-losses. Why? Imagine a situation when your stop-loss is 80 USD, but the average bar of your finest LIBB resolution (i.e. mostly 1 minute) is 150 USD big. In this case you are experiencing the same problem as described above, when the platform is not able to determine whether the stop-loss inside the bar was hit or not and it makes, again, just an inaccurate approximations that are driven by the above-described logic - if the bar closed closer to its low or closer to its high. In other words, you are again at the beginning and with too small stop-loss, not even LIBB will help you, and the problem still persists. Protection #2 So, we are getting to the point when we need to go a little bit deeper to solve this problem.One of the solutions would be to use even finer data resolution - down to the tick level. But this isn't as easy as it sounds. Firstly the tick data history is not so easily accessible, or just for a very short period. And if these data are available, they are really expensive. But even if you still purchase tick data, you need to solve several technical issues - as the tick data are usually so big, that most of the platforms won't handle so many data, crashes or runs backtests incredibly slow (I can confirm this). Protection #3 So we need to use much simpler solution - and that is the necessity to use reasonably big stop-loss. And what is reasonably big stop-loss? Simply use stop-loss that is at least 1.5-2x bigger than the biggest 1-minute bar on your chart. It is simple and you can avoid several problems. For example, if the biggest 1-minute bar for all your data history was 300 USD, use stop-loss at least 450 USD. Period.It is simpler and safer to get used to higher stop-losses than lying to ourselves and subsequently be surprised why such a nice backtest equity is quite the opposite of results of live trading. Happy trading!

10 Easy Steps to Succeed in Your Online Classes

Congratulations Youve made up our minds to pursue your upper schooling, and doing so online is how to pass if you have an interest in a versatile, studentcentered educating manner. Studying online permits you to pursue different pursuits and attend to different responsibilities whilst nonetheless operating your method towards some extent. However, it will now and again imply that its clean to get distracted. Here are 10 clean steps to verify luck on your online categories.

1. Connect together with your instructors once conceivable. Even in case you are doing smartly within the category, its extraordinarily vital to increase a rapport together with your trainer. When you do that early on, you temporarily understand what the priorities are within the route, what expectancies the professor has of you and youre going to be motivated to prevail, surer of whats forward and higher ready to do smartly with the impending subject material.

Valuable questions to invite your trainer come with the next

How versatile are you with time limits How versatile are you with grownup freshmen What applied sciences do you employ within the route How to be had are you through e mail and different sorts of verbal exchange How do you put up an internet neighborhood and what are the expectancies for participation in it In addition, since instructors are to be had to lend a hand all over the classes, its all the time just right to have had private touch with the trainer early on. This method, when you wish to have lend a hand, its more straightforward to achieve out and get the help you wish to have.

2. Confirm the technical necessities of the route. Online categories can also be very advisable for college kids with busy schedules, however provided that they are able to simply get right of entry to the fabrics. It is vital to obviously perceive what the technical necessities are. So, ahead of the route begins or as quickly thereafter as conceivable, youll want to test that your pc will paintings with the entire online equipment, and that you understand how to navigate them. This will be sure that you dont must spend time all the way through the route attempting to determine the generation.

three. Create a time table and stick with it. Quality online instructors create classes which might be clean to navigate and feature transparent expectancies. Having that roughly easytodealwith framework in position will make learning and succeeding that a lot more straightforward. However, although the framework and necessities of your category arent as transparent, youll create a time table and construction, which is able to very much fortify your probabilities of luck within the route. Using equipment equivalent to Google Calendar is a good way to start out. Knowing how your weeks and months glance and scheduling blocks of analysis time for each and every activity or module will will let you stick with a time table.

four. Ask questionsall the time. When you dont perceive, ask questions. When you do perceive, ask additional questions. Instructors recognize scholars who take part, and if theres a participation or dialogue part a part of the grade, then asking high quality questions is helping guarantee your grade on this space. Even if there isnt a participation part, its all the time helpful to invite inquiries to remember to perceive the fabric and are transparent on what is needed of you.

five. Be arrangedand keep arranged. Students whore taking conventional, campusbased classes most often have a constant time table to observe each and every week, through which study room instruction is adopted through assignments out of doors the category. However, for online classes, scholars will have to search out their very own techniques to stick on most sensible in their paintings. It is crucial that you just be arranged from the start of the semester with the intention to achieve success in an internet route. For instance mark task due dates on your calendar, discover a submitting machine for each online subject material and bodily subject material that is helping you stay monitor of the whole lot simply, and shed light on find out about schedules that duvet sections of the route one by one so youve got an arranged tactic to protecting the semesters subject material as you pass alongside.

6. Have a blank, quiet, and constant workspace. One factor online and inclass classes have in not unusual is that scholars all the time want a spot to review or whole assignments this is blank, quiet, and constant. You can select the place that is for youwhether or not its at a espresso store, a college library, a devoted place of business, or at house. Wherever you select to review and whole assignments, you must make it a constant location that doesnt have out of doors distractions. It is basically key that where is quiet and lets you focal point in your paintings with out distractions.
7. Do no longer procrastinate. Successful distance freshmen hardly procrastinate. They dont do away with assignments or wait till the final second to write down their papers. Successful online scholars experience freedoms that come with operating at their very own tempo and the facility to finish their paintings in as a lot time because it takes them. On the opposite hand, they know that finishing their assignments is best performed early and on time cramming merely doesnt paintings, and it doesnt will let you retain knowledge longterm. Get began early on getting a success.

eight. Work in your studying comprehension. Successful distance freshmen generally tend to have just right studying comprehension abilities. Most conventional, campusbased scholars concentrate to lectures and take notes, and a few online classes additionally require this. However, the vast majority of distance freshmen are anticipated to grasp subject material thru a large amount of studying. Although far finding out classes be offering video recordings and audio clips, maximum systems require scholars to hide and grasp a considerable amount of written knowledge. If it is a problem for you, it could be very useful to first sign up in a studying comprehension route there are lots of assets online that will help you do that. This ability by myself could make a huge distinction on your luck.

nine. Establish and admire routines that be just right for you. If, for instance, youre employed best within the morning or in brief bursts, then set find out about routines that can help you find out about within the prelunch hours when your mind is contemporary. If, then again, you do best through learning at evening or at the weekends when youll devote nightowl hours or longer blocks in your learning, then make it some degree to take action. Consider how and whilst you paintings best, and enforce a find out about plan that respects the routines that be just right for you.

10. Connect together with your friends. Establishing sturdy connections with friends and professors is a very powerful facet of tutorial luck, in addition to skilled development. One of essentially the most rewarding reports in schooling is finding out thru collaboration. Forming significant relationships together with your friends and professors can can help you be told extra, keep motivated, and feature an outlet to specific your personal working out of subject material. So, keep attached thru message forums, chat rooms, e mail, and different digital assets. And take note lots of the other people you meet in faculty shall be conceivable process assets down the road so determine connections and keep in contact

Florida National University gives a wealth of tutorial and professional online classes. Check out the entire choicesyour long run is ready

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