Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

Drawdown vs. Loss What's the difference? Is it possible to know the difference before your stop is hit? If you can tell the difference, how do you do it? When do you decide that it's really a loss, and not drawdown? Is it better not to worry about whether it's drawdown or a loss? Should you just set your stop loss, and that is all you need to do?

Share this post


Link to post
Share on other sites
A loss is the result of a single trade. Drawdown is the difference between a high and a low in the cumulative results of a series of trades.

 

UrmaBlume

 

I just looked this up for drawdown:

 

Drawdown Definition

 

Ok, I guess I didn't know the official definition of drawdown. I viewed drawdown as the amount of money that the trade would have lost if the trade had been exited at a loss, when it could have rebounded for a profit. So for example, if the trade was entered at 100, then dropped to 95, then rebounded to 110, I thought the "drawdown" was 5. You see what I'm saying?

 

So what would you call what I just described above? Because I've obviously been misusing the term "drawdown".

Share this post


Link to post
Share on other sites

It is practically impossible to enter a trade without it initially going to a loss. The only way to enter a trade without it going to a loss, would be if the order filled from the bid/ask shifting without the price actually moving. That situation can occur, but don't count on it.

 

So, my point is this: An initial loss on your order is almost impossible to avoid. So it is something that needs to be accepted, and dealt with. It's all about the never ending situation in trading about where to cut your losses.

Share this post


Link to post
Share on other sites

google- maximum adverse excursion - it will give you another measure to look at. :)

 

plus just because your stop is at a level it does not mean that you have to wait for it to be hit.

Share this post


Link to post
Share on other sites

One website states that Maximum Adverse Excursion only happens when the trade has a loss. Another site defines it in a different way. Then there is Maximum Favorable Excursion. I'm really not looking for either one of those. Those are statistic provided from backtesting. I'm looking for some kind of indication of whether the trade is going to go in your favor, after the entry, and some loss.

Share this post


Link to post
Share on other sites
I'm looking for some kind of indication of whether the trade is going to go in your favor, after the entry, and some loss.

 

the holy grail???

Some people apply a time limit, others a few bars, others just get out if it does not go in their direction right from the get go.... you choose.

Share this post


Link to post
Share on other sites
the holy grail???

Some people apply a time limit, others a few bars, others just get out if it does not go in their direction right from the get go.... you choose.

 

Those are all good conditions to have for a confirmation. Here are my confirmations:

 

  • First bar going in the direction of my order needs to show some strength. Needs to be a higher high for a long, needs to be a lower low for a short, or needs to be a bigger than average price move in my direction.

  • Hard price move against my order is a reason to exit.

  • If no sign of strength in the direction of my order within two or three bars, exit.

  • A strong price move in the direction of my order that turns and closes in the opposite direction on the same bar, is a reason to get out.

 

These are the kind of specific conditions that I'm looking for to make decisions. Being able to define my rules, will hopefully make the decision making easier. If the rule works, and the conditions are met, then act.

 

I should state that I'm using Traders Laboratory as a way to work through ideas, solidify my thinking and bring my trading rules to the front of my consciousness. Typing it out and posting them probably helps to set those thoughts more solidly and acts as a way to train those brain cells.

 

So if someone reading this wants to post their rules for a stop loss, then it may help you to recognize those conditions and make the trading decision easier.

Share this post


Link to post
Share on other sites

Long term trading success is not about instinct, divine inspiration or spontaneous intellectual combustion. It is about intelligent data processing and sound method.

 

If you are adept at handling, exporting and normalizing data there are a wide range of tools that can provide precise answers to questions such as those posed here - these are the tools the big boys use.

 

The right tools for the right job can make a lot of difference. There are many tools that can intelligently process huge amounts of data to discover precise rules, correlations and feasibilities in minutes that would take a manual processor decades to uncover.

 

In this case the most appropriate tool might be a rules generator, a decision tree or a Bayesian network. By the same token, given data and sample space, a genetically optimized neural network might produce a more effective, more granular output.

 

The practical application of such tools is discussed here, here and here. Those posts provide the names and sources of specific tools that may be of use and a discussion of how they are usually applied.

 

In the markets as in many games

 

Information = Equity

 

and in the markets the guy with the best information is the guy who makes the most money and he is also the guy who knows how to best process raw data into useful information.

 

If you are not processing at this level then you are not really competing at any level. It's not so much a question of whether you are using these exact same tools it is a question of whether your processing includes this depth of design.

 

cheers

 

UrmaBlume

Share this post


Link to post
Share on other sites
Long term trading success is not about instinct, divine inspiration or spontaneous intellectual combustion. It is about intelligent data processing and sound method.

UrmaBlume

 

I agree. I know nothing about MARS® (Multivariate Adaptive Regression Splines) or Neural Networks. It's interesting, and I have no doubt that it is very valuable. I have programed predictive curves using the Least Squares Method based on price. I haven't tried doing that with a combination of other inputs. But now you have got my brain cells vibrating a little bit here.

 

I doubt that I will ever use MARS® (Multivariate Adaptive Regression Splines) or Neural Networks. I guess I should never say never, but I'd need to look at the cost/benefit of getting that deep into the analytics. I'd be very interested to see performance comparisons of some big system compared to a similar methods and calculations in a good retail platform.

 

The data processing has to be based on something. A theory, conditions, a strategy, or observations. I'm not necessarily looking for a backtested condition that's been proven to a certain standard deviation. I'm all for that, and I hope to prove my system by that means eventually. But I'm just looking for the ideas that work in trading.

Share this post


Link to post
Share on other sites

If you are not processing at this level then you are not really competing at any level.

 

I now know that you are deep into cutting edge scientific methods of data analysis, so I'm assuming that you have references and data sources to back that statement up. ;) Sorry, man. I just couldn't resist the temptation. I hope you take it in the light hearted way that I mean it.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.