CL Redux
- Thread starter schizo
- Start date
ND,
"Then analyze the max favorable and adverse price excursion (MFE & MAE) using various trade entry methods,"
I know what you mean here, but you might want to put this in more layman`s terms for the newbies reading this thread trying to learn.
I don`t read trading books, maybe this is Brook`s or Some other Author`s technical wordsmithing, or maybe you invented it but it came from somewhere, damn meme (lol) but just imagine if F@@cking were described in the same euphemistic manner - nobody would ever think F@@cking was fun
"Then analyze the max favorable and adverse price excursion (MFE & MAE) using various trade entry methods,"
I know what you mean here, but you might want to put this in more layman`s terms for the newbies reading this thread trying to learn.
I don`t read trading books, maybe this is Brook`s or Some other Author`s technical wordsmithing, or maybe you invented it but it came from somewhere, damn meme (lol) but just imagine if F@@cking were described in the same euphemistic manner - nobody would ever think F@@cking was fun
Quote from BlueStreek:
ND,
"Then analyze the max favorable and adverse price excursion (MFE & MAE) using various trade entry methods,"
I know what you mean here, but you might want to put this in more layman`s terms for the newbies reading this thread trying to learn.
I don`t read trading books, maybe this is Brook`s or Some other Author`s technical wordsmithing, or maybe you invented it but it came from somewhere, damn meme (lol) but just imagine if F@@cking were described in the same euphemistic manner - nobody would ever think F@@cking was fun
LMAO! I remember reading that MFE and MAE in Matcha's thread and I'd missed the explanation of it and thought to myself "WTF is she talking about, these guys sound like they know what the heck they're doing, I missed class and now I'm screwed..."
For me as a scalper, the max favorable excursion is how far price runs favorably from a defined entry before turning around and making a price swing in the opposite direction; max adverse excursion is how far price runs against a defined entry before turning back in the direction of the trade. This helps define where to place stops and targets.
For those who hold thru retraces in a trending move, these levels might be how far price runs before printing a trend reversal pattern, or taking out a trend line.
I'm all about individual price swings, even in a trending move, I'm in and out like the burger all the way up or down. Uh oh, gotta be careful, Ammo might get all excited by this sort of talk and starting posting boobs, nips, and cleavage.
page 265 - "WHAT TO AVOID"
"There is one kind of exit that is designed to get rid of losses, but it totally goes against the golden rule of trading of cut your losses short and let your profit run. Instead, it produces large losses and small profits. This type of exit is one in which you enter the market with multiple contracts and then scale out with various exits...On a gut level, this sort of trading makes sense because you seem to be "insuring" your profits. But if you step back from this sort of exit and really study it, you'll see how dangerous this type of trading is.
What you are actually doing with this sort of exit is practicing reverse position sizing. You are making sure that you will have multiple positions when you take your largest losses...It's a perfect method for people with a strong bias to be right, but it doesn't optimize profits or even guarantee profits"
--- "Trade Your Way To Financial Freedom" by Van Tharp
Reading between the lines, Tharp is saying that this style of position management will force you to maintain a HIGHER winning pct because your long-term avg win will be LOWER than someone who trades all-in / all-out (due to the larger account beatings you took on the total losers and the trades which could not match the performance of the all-in / all-outer).