Quote:
Originally Posted by kaalilaatikko
I would say that at least do not do it for both at the same time! A factor of 2 simply does not seem to work alone for VS. I have been considering VSSTOP for exit only, and I have been thinking to do some re-backtesting by using VSSTOP as a trailing stop. It might be interesting to look at the entry as well, but personally I have the gut feeling that it would not be a good idea.
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I'd agree that you wouldn't want to use them both at the same time, but then again Wilder even states you can tweak the constant as you see fit. While he recommends a specific range, there's no reason you *have* to stay with it (although I don't think I'm at a level where I should be making too many mods to his system unless I see something that's not working).
Jay - If you're using VSSTOP as a trailing stop, that would set it to a multiple of ATR. I was thinking that using ATR (or some multiple of ATR between 1.0 and 2.0) might prove beneficial in some of these trades as most losers go for you and then turn south before making it past the 3*ATR minimum in your direction to get you "locked in" by the VS system. My initial backtesting (using C=3) shows that things either go well for you, well against you or stay pretty flat. For you and flat don't hurt, but those moves against you really can put a damper on your profits (and your emotional mindset).
I'll try to do a little bit of backtesting (been using excel, not sure if you have a better way?) and look at using 3.1 for entry and then using the VSSTOP as a trailing stop, or just simplify it to be a flat rate based on ATR (again 1-2) on the day of the trade.
I just checked and you can put two different instances of the VS system on any particular chart. So I'd set one with a 1 (looking for long) and one with a 0 (looking for a short). This will give you the trailing stop you desire, now we just need to do some testing to determine what constant to use.
BTW - Anybody know what it takes to move from "Newbie" to whatever the next level is?