slipshod wrote:glabbeek wrote:Recently you added the trailpercent exit. This method of exit already locked in many profits for us and is a good addition to the strategy.
I'm wondering why you opted for using the basket method. I never understood the use of using baskets and nobody has ever been able to show me the advantage of using baskets.
You only should manage your account, that is your basket!
If I would say to you: "The AUDCAD is up 5%, so buy GBPCHF, NZDUSD and EURJPY", would you think is logical? probably not. So why would you accept this on the exit side?
I hope you don't mind my jumping in - I'm a little confused by what you're asking. You say the trailpercent is a good addition and has locked in profits, but then question why its been added & can't see the advantage? Isn't that a little contradictory? Also the example you provide is relating to entries, but the EA only basket-manages trades that are already running, with entries judged on individual pairs alone.
Let's say you have a basket that is performing good. It has 5 pairs in the basket and 4 are each up 4 percent and rising. (so 16 percent total) One stock is going down 5 percent. What would you like to happen? Close the whole basket, or just the one losing pair?
In a case like you describe here, the falling trade could potentially drop the overall profit and hit the trailing percentage, which would indeed close the whole basket. It would depend on how sharply that one trade's falling compared to the four others are rising, how tight the trailingpercent stop is, and where the individual losing trade's stop-loss is - if it stopped out the problem would be solved.
Truth is no-one knows what the market will do next. That trade could turn around and run into profit while the others stall and reverse. At some point you have to make a decision to take money off the table and await new entries, and the advantage of the trailpercent is that you know for sure that a proportion of profit gained is going to be kept - not lost because the trader lacks judgement & lets winners turn to losers (or is asleep while the market moves overnight).
You are right about the function of the trailing stop. That is why I brought up the idea in the first place. What I want to point out (and I see that I wasn't very clear) is that you should not approach your exit as an basket.
Give me 1 good reason why closing a basket would amount to bigger profits, or smaller losses, than individual exits.
Why, if the USDCHF is dropping, would that mean you also need to exit the GBPCAD? there is no correlation.
Only if the EURUSD and the USDCAD are loosing than you could expect the EURCAD to be rising. In this last case there is a correlation and you could use this in a basket.
I start with saying that the trailpercent has locked in some gains and therefore it is working, but I think it is a blunt object and would be far more effective if it was used per pair in stead of in a basket.
"Cut your losses and let your profits run"
