Is there a hard stop

    Posted by bulf6285 on 10th of Oct 2018 at 10:36 am

    Is there a hard stop on the SPY Pro trade?

    one of you always asks

    Posted by matt on 10th of Oct 2018 at 10:56 am

    one of you always asks this every time the system is in a trade after a draw down like clockwork,  has been covered many countless times before.  Anyway I was going to point you to the FAQ as I thought it was discussed there but I don't see it, so I need to add paragraph section, again I'm sure it was on the old site, must not have gotten ported over. 

    anyway the Breakout Sub system has a tradition hard stop.  The other reversion to mean sub systems do not, they exit bad trades on a bounce.  Testing has always showed that it was better to exit on a bounce than on a sheer hard sell off where you tended to stop out at lows.  

    Otherwise one could use some of the statistical information as a guide for a stop loss.  The Strong Trend Shallow Pullback sub system, which first triggered the system long,  in the first past had a max draw down of -3.3% on the 1st entry.  One could use that as a guide placing a stop wider than that.  The current first entry on the strong trend shallow pullback is down about -2.2% so it's still a ways from the max historical of -3.3%, and if one were to use a stop of say -3.5 to -4% to give it ample room it's quite a ways away.

    Otherwise the max historical trade draw down in the entire system is about 10%, that's across all sub systems. so if one wanted to use that as a guide, that's a long way away. 

    again your choice if you wish to use those are not.  But otherwise the system will exit on a bounce

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