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Wednesday, June 3, 2009

Tight Stop

I think you have to know my idea behind using 60 pips stoploss, what a huge stoploss for scalper system. I aggree with tight stop, but actually there is a danger behind using tight stop on my system. The 20 period of CK_Speed Indicators is a lag indicator. And color changing in this indicator is very depending on current market Volatility. The color changing is not coming from a fixed value.
Therefore if You use tight stop may be you will find the expert keep going opening trade just after your stop was hit, because the indicator is still allowing to trade.
I use 60 pip stoploss because backtest showing that this value is enough to protect EA to make continues trade and finding suitable price before doing cutloss.
Right know Only VS_EURGB that has ability to protect itself doing continues trade. I just suggest that You should have a plan about this condition. Market volatility can change in any time. I think you should test your stop in high volatility period. You can test it during August-December 2008, because during this period most pairs record it's higher volatility since they traded. And surprisingly, this period is the most profitable period for all scalper system that work during Asian Session only, even with wide spread.

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