Module 7, Lesson 2
TradeStation Walkthrough
Tomas: Okay, so this is code version 1.1, so for both the original code and the two
zones code, you have version 1.1, and the only difference is that here we
have a new switch, which is called stop-loss type. And if it's 0, as it was until
now, SetStopPosition for its position, and if it's set to 1, then we have
SetStopContract, so then we will have stop-loss individually for each contract.
So, here the whole difference is this one line at the very end. If stop-loss type
is 0, then SetStopPosition as SetStopContract. And if we said 1, and we have
SetStopContract, then we actually have... all of a sudden, we have $1,500
stop-loss for each contract, so with two contracts, now we're risking $3,000,
and with three contracts, we're risking $4,500, whereas if we keep SetStop-
Position, we have, still, this, stop-loss times stop-loss, distributed among two
or three contracts. So it's real lowering for each position, which we can afford
to do with the dynamic position sizing, as I explained, because we have differ-
ent maximum adverse excursions among different circumstances.
So if we have a very favorable dynamic position sizing circumstance, we prob-
ably have lower maximum adverse excursion, and that's why we still can
keep the same stop-loss, even for two contracts combined, because now we
have lower maximum adverse excursion, which supports us with half the
stop-losses. And again, if you are a more advanced trader, and you like exper-
imenting, feel free to really scope maximum adverse excursion within each
level of each dynamic position sizing technique individually, and just adjust
your stop-loss accordingly. That's on our to-do list for the hedge fund as well.
We will get to it. I don't know when, exactly, but definitely within the follow-
ing months.
So this is the second code. Again, same thing. New stop-loss type, and here
we have the extra line. Okay, so I hope it explained. I hope it is clear, now.
Again, thank you very much, Oliver, for bringing this up, and if more ques-
tions, or more hesitations, or anything else will arise, of course I will cover it
in another separate module. But I believe that now we are complete with the
course, and now nothing has been left, and everything has been clarified, and
fully described, and covered. So thank you very much, and happy trading.
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