Simple Entry Question

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Simple Entry Question

Postby gmg733 » Sun Jan 26, 2014 5:36 pm

In the default entry/exit logic, ref[open,1], I suspect the 1 represents the current day. I think I am reading too much into this, but setting a Market order like this is simple buying at the open of the day following your signal. How is that different than specifying a Market order and the logic is simply 'open'?

So if I wanted to buy at 2% below the market open, couldn't the logic be ref[open, 1] * 98 or open * .98? Or when you use close or open with a ref statement it assumes yesterday's close/open in this example.

Thanks.
gmg733
 
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Re: Simple Entry Question

Postby Overload » Sun Jan 26, 2014 7:52 pm

In the default entry/exit logic, ref[open,1], I suspect the 1 represents the current day.

Actually, no. 1 represents the next day. Keep in mind that as a rule, Signals are always run at the end of each trading day, and not each morning before the market opens. Thus, a Market Order at a price of "ref(open, 1)" means enter an order tomorrow at tomorrow's Open Price.

I think I am reading too much into this, but setting a Market order like this is simple buying at the open of the day following your signal.

Correct.

How is that different than specifying a Market order and the logic is simply 'open'?

The use of 'open' is identical to using ref(open, 0). In verbal terms that would be: enter an order tomorrow at today's Open Price.

So if I wanted to buy at 2% below the market open, couldn't the logic be ref[open, 1] * 98 or open * .98?

You would use "ref(open, 1)". However, because it is a Market Order type, you'll enter the position and be given that price regardless of whether it is viable or not. If you want a Limit Order, where you'll only enter the position if it is viable, then you should use a Limit Order and not a Market Order.

Or when you use close or open with a ref statement it assumes yesterday's close/open in this example.

You probably wouldn't want to use "open * .98", since that would be saying: open a position tomorrow if tomorrow's price drops 2% below today's open. That's a logical possibility, but probably not one you would use frequently. But you might more likely use this: "close * .98". That would be saying: open a position tomorrow if tomorrow's price drops 2% below today's close.

Again, always think of it from the reference point of running signals each evening after the market closes. Ref(open, 1) means tomorrow's opening price. Ref(close, 0), or simply 'close', means today's closing price.

Hopefully that all makes sense.

Pete
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Re: Simple Entry Question

Postby gmg733 » Sun Jan 26, 2014 9:19 pm

Got it, thanks.
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Re: Simple Entry Question

Postby gmg733 » Mon Jan 27, 2014 11:03 pm

So if I put in a Limit Order of ref(open, 1)*.95, is the Daily Signal system intelligent to know whether or not the Limit gets filled? I suspect so, but wanted to make sure.

Thanks!
gmg733
 
Posts: 44
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Re: Simple Entry Question

Postby Overload » Tue Jan 28, 2014 10:11 am

Yes, Limit Order Types will only be filled during back tests if the price actually traveled to the specified Limit Price.

There is also a setting in the Setups > Trade Settings, General tab named "Execute Limit Orders Only If Within Spread & Slippage Adjusted Range" that might be helpful as well. Sometimes there is a liquidity question regarding the ability of back tests to simulate live trading. For example, suppose your Limit Price was 14.75, and the Low Price on the trade date was also exactly 14.75. Without checking the box, the Limit Order would still execute, although there is a significant chance the trade would not have fully filled at that price in live trading. But by checking the box, the price would need to go down to 14.70 (or whatever your spread/slippage settings are) before the Limit Order would be filled.

Pete
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