I cannot seem to figure out how Multicharts calculates the percent trailing stop. Please help me understand where I'm going wrong.
When I set the % trailing stop to 40%, it has been executing at anywhere from 47-66%. I can't seem to figure out how/when it decides to execute the stop.
The Stop will be activated after you achieve a profit of 5 per contract. After this any drop of 30% from the maxcontractprofit will result in a % TrailingStop being triggered.
The acutal executions are 7-26% away from the desired setting.
Using a 30% trailing stop with a profit trigger of 5 (as above):
5 * 0.3 (or the MaxContractprofit*30% drop}= 1.5
15-1.5 (or the (Entryprice+ Maxcontractprofit)- (30% drop in profit))= 13.5
It stands to reason that a price drop below 13.5 would trigger the stoploss. However I find that Multicharts always executes the stop lower than this by several points.
Any ideas why? Am I calculating this wrong? Are the trailing stops bugged?
Percent Trailing Stop Problem
Questions about MultiCharts and user contributed studies.
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