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Re: Downside to capturing profits? [Re: Sundance] #429408
09/12/13 08:34
09/12/13 08:34
Joined: Jul 2000
Posts: 27,967
Frankfurt
jcl Offline

Chief Engineer
jcl  Offline

Chief Engineer

Joined: Jul 2000
Posts: 27,967
Frankfurt
Manually closing trades is equivalent to changing the strategy exit parameters. So when you do that you're working with unoptimized and untested parameters.

Most strategies have only a slight edge. Therefore it is not enough that a favorable trade makes profit. It must make sufficient profit for overcoming the losses of the other trades. If you close it prematurely, you will reduce the potential profit and in most cases convert a profitable strategy to an unprofitable one.

There is only one exception where it could make sense to prematurely close a trade: if you have an outlier, a trade that is extremely in profit due to a price shock or some similar event. In that case, closing it is still a bad idea, but you could use the "Panic" slider or place a manual stop loss in the trade platform and thus lock the profit.

Re: Downside to capturing profits? [Re: Sundance] #429430
09/12/13 11:40
09/12/13 11:40
Joined: Jun 2013
Posts: 1,609
D
DdlV Offline OP
Serious User
DdlV  Offline OP
Serious User
D

Joined: Jun 2013
Posts: 1,609
Wow! Thanks all, and a special thanks to DMB for such a long, detailed, & informative post!

Hopefully jcl will chime in and at least answer the Zorro questions about closing trades in the broker platform, effects on the Z strategies of manually taking large profits when they appear, etc.

Thanks!

Re: Downside to capturing profits? [Re: DdlV] #429438
09/12/13 12:24
09/12/13 12:24
Joined: Jun 2013
Posts: 1,609
D
DdlV Offline OP
Serious User
DdlV  Offline OP
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D

Joined: Jun 2013
Posts: 1,609
Thanks jcl!

While I digest all of this, a few Zorro-specific questions:

If all trades are closed and Zorro exited and restarted (same strategy), is there any effect on the subsequent execution of the strategy?

If all trades are closed but Zorro is not exited and restarted, is there any effect on the continued execution of the strategy? Does it matter if the trades are closed via the Zorro Stop button vs. the broker platform?

If n trades, 1<n<all, are closed (would have to be via the broker platform for the Z strategies), is there any effect on the continued execution of the strategy?

By "execution of the strategy", I mean the mechanics of what Zorro does, not the theoretical aspects in this thread.

Thanks!

Re: Downside to capturing profits? [Re: DdlV] #429460
09/12/13 17:29
09/12/13 17:29
Joined: Aug 2013
Posts: 124
D
DMB Offline
Member
DMB  Offline
Member
D

Joined: Aug 2013
Posts: 124
JCL makes very correct points. I don't recommend what I do. It just helps me sleep at night (trader psychology issues.) I may be compromising the 'edge' JCL mentions. This is why I say the question in the first paragraph is so important.

Re: Downside to capturing profits? [Re: DMB] #429494
09/13/13 10:36
09/13/13 10:36
Joined: Jul 2000
Posts: 27,967
Frankfurt
jcl Offline

Chief Engineer
jcl  Offline

Chief Engineer

Joined: Jul 2000
Posts: 27,967
Frankfurt
DldV: It makes no sense to exit and restart Zorro just for closing trades. Exit and restart can affect the performance of the whole strategy.

Close them either in the broker platform, or by clicking [Stop] but continuing the trade session. This way you only affect the trades, but not the rest of the strategy.

Re: Downside to capturing profits? [Re: jcl] #429524
09/13/13 15:43
09/13/13 15:43
Joined: Jun 2013
Posts: 1,609
D
DdlV Offline OP
Serious User
DdlV  Offline OP
Serious User
D

Joined: Jun 2013
Posts: 1,609
Thanks jcl & everyone else!

Re: Downside to capturing profits? [Re: DdlV] #429797
09/18/13 19:00
09/18/13 19:00
Joined: May 2013
Posts: 627
Bonn
Sundance Offline
User
Sundance  Offline
User

Joined: May 2013
Posts: 627
Bonn
Wow. My Z12 real account has nice trades on US oil and also USD/CHF. Those are really big spikes and at the moment are giving me a plus of ~12% of the whole account balance. The probability that price is going further is not really high. So i would like to close the trades but boys i know i would kill the strategy :-(

Re: Downside to capturing profits? [Re: Sundance] #429819
09/19/13 07:02
09/19/13 07:02
Joined: May 2013
Posts: 627
Bonn
Sundance Offline
User
Sundance  Offline
User

Joined: May 2013
Posts: 627
Bonn
Just an update. Zorro has suddenly closed the UsOil trade. It did near the maximum price it could achive. I'am totally astonished. Now i have 100% confidence in letting Zorro (Z12) trade on its own and don't take some profits cause i 'know' that there couldn't be more to take. :-)

Re: Downside to capturing profits? [Re: Sundance] #429863
09/19/13 13:07
09/19/13 13:07
Joined: Sep 2013
Posts: 64
Spain
yosoytrader Offline
Junior Member
yosoytrader  Offline
Junior Member

Joined: Sep 2013
Posts: 64
Spain
that was a perfect entry and exit catching a 3$ move!


Happy trading laugh
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