Dailyfx , which is my one of favorite forex related web site, has started to publish series of articles about designing trading systems. In this series the writer mentioned about an important point of trading systems: Maximum adverse execution. Maximum Adverse Excursion is the maximum loss of a trade after entry. If you are long then it is the lowest low after your entry bar. If you are short then it is the highest high after your entry bar.
Setting your stop losses using this data, is very crucial for your systems. I am using this tecnique in my systems but I've never heard of this term before. Sounds cool :)
Here are the links for the read:
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Friday, February 13, 2009
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