Stops and Targets

[theftproof]

hi. got a quick question.

i backtested the last month and now wanna start forwardtesting in a demo account.

i am using the atm strategy panel. but when i create an atm strategy i am a little confused what value to put for SL and target to get the targets and SL my strategy requires.

i am using sell and buy market to enter the market no matter what

my strategy says that my SL is always 13 pips away from the bidprice at entrytime. and my target would be 10 pips away in the other direction from the bidprice at the entrytime. meaning if the bidprices makes a plus of 10 pips, i should take my profit and if the bidprices makes a minus of 13 pips, i should be stoped out.

so my outcome should be either -13-spread(1pip) = -14pips(stoplossoutcome
) or 10-spread(1pip) = 9 pips(targetoutcome)

what values do i need to put in to make sure that this would be the case

i am asking because i am a little confused about how the askprice affects this.

i guess there are only the following options if the spread is 1 pip

Target/stoploss
a) 11/-12
b) 10/-13
c) 9/-14

obviously all this numbers need to multiplied by 10, when i create the strategy.

am i right that its the same for either long or short?


hope someone can help.

[NinjaTrader_PatrickH]

Hello theftproof,

Thank you for your post and welcome to the NinjaTrader Support Forum!

Backtesting is always going to be done on the close of the bar which is the last traded price for the bar, there is no designation between Bid or Ask. For information on the Strategy Analyzer please visit the following link: http://www.ninjatrader.com/support/h...y_analyzer.htm

Your ATM Strategy should simply be 13 for the Stop Loss and 10 for the Profit Target. For information on ATM Strategies please visit the following link: http://www.ninjatrader.com/support/h...gement_atm.htm

Please let me know if I may be of further assistance.

[theftproof]

just to make things clear.

if i am long i will either get stopped out or hit target when the askprice hits one of the before

and if i am short this will occur when the bidprice hits either the target or the stoploss.

right?

[NinjaTrader_PatrickH]

Hello theftproof,

Thank you for your response.

You sell to the bid and buy from the ask. So if you are long your Profit Target and Stop Loss are sell orders, meaning they will sell to the bid. If you are short your Profit Target and Stop Loss are buy orders, so they will buy from the ask.

Please let me know if I may be of further assistance.

[theftproof]

are you sure it sould be 10 and -13?


szenario:

bidprice(the price shown at the chart) ist 1.000 when i wanna enter the market. so in accordance with the strategy my target would be 1.010 and my stoploss would be 987.

that would make a profit of 9 pips. (spread included) and a loss of 14 pips( spread included)

now i wanna go long, so i'd ve to pay the askprice wich would be 1.001 at the moment(1 pip spread)

NT7 places my entryline now at 1.001. with an 10 pip target my targetline would be at 1.011 now, since NT7 measures from the entryline. and my stoplossline would be at 988

i assume that the target/stoploss will only trigger if the bidprice hits target/SL.
since the bidprice is at the moment 1.000 it have to make a 11pip move to hit target to gain a profit of 10 pips(spread included). and it have to make a 12 pip move to trigger the SL for a loss of 13 pips(spread included).

is that right?

if the assumptions are right, that would be the wrong results according to my strategy.


thats why i came to the conclusion i ve to put in a target of 9 pips and a SL of 14 pips to end up with the right amout of winnings/losses.

since the askprice and the entryline is 1 pip above the current bidprice, a 9 pip target would result a 10 pip move of the bidprice with an outcome of 9 pips(spread included)

the otherway round the bidprice would result a 13 pip move with a loss of 14 pips(spread incluced)

is there anything wrong with this thoughts?


if i'd go short, the entry line would be placed at 1000(bidprice) but because we would wait for the askprice to trigger our target, the bidprice again would make a 11 pip move with a target of 10 set. again 1 pip too much according to the strategy.

right?

in in both cases a target of 9(0) and a SL of 14(0) would be correct.

wrong chain of thought?

[NinjaTrader_PatrickH]

Hello theftproof,

Thank you for your post.

are you sure it sould be 10 and -13?

i assume that the target/stoploss will only trigger if the bidprice hits target/SL.
since the bidprice is at the moment 1.000 it have to make a 11pip move to hit target to gain a profit of 10 pips(spread included). and it have to make a 12 pip move to trigger the SL for a loss of 13 pips(spread included).

is that right?

When creating ATM Strategies you will want to set the Stop Loss and Profit Target values to the desired number of pips away from the entry price. So if you want the Sotp Loss 13 pips away from the entry price then set the value to 13 and if you want the Profit Target 10 pips away from the entry price then set the value to 10.

If you only want a 12 pip loss set the Stop Loss to 12 and set Profit Target to 9 for a 9 pip profit.

since the askprice and the entryline is 1 pip above the current bidprice, a 9 pip target would result a 10 pip move of the bidprice with an outcome of 9 pips(spread included)

the otherway round the bidprice would result a 13 pip move with a loss of 14 pips(spread incluced)

is there anything wrong with this thoughts?

When entering long you buy from the ask, when selling you sell to the bid. The Profit Target and Stop Loss values work in absolute values, so if I enter at 1 and have a 10 tick Profit Target then my Profit Target would sit at 11.

if i'd go short, the entry line would be placed at 1000(bidprice) but because we would wait for the askprice to trigger our target, the bidprice again would make a 11 pip move with a target of 10 set. again 1 pip too much according to the strategy.

right?

If this is the case then set it to 9.

in in both cases a target of 9(0) and a SL of 14(0) would be correct.

wrong chain of thought?

Seems you have this correct for your ATM Strategy.

Please let me know if I may be of further assistance.

[theftproof]

so what you are sayin is:

a target of 10 pips will generate an absolut profit to my account of 10 pips(if it triggers), weather the spread is 1 or 7.5 at the moment.

same for the SL.

right?



if yes:


thanks for the help, now i know what to do ; )

[NinjaTrader_PatrickH]

Hello theftproof,

Thank you for your response.

a target of 10 pips will generate an absolut profit to my account of 10 pips(if it triggers), weather the spread is 1 or 7.5 at the moment.

That is correct.

Please let me know if I may be of further assistance.