Disambiguate
Here are discussed ambiguous cases arising when building a trading system, i.e. when combining the Tabs.
What ambiguous cases are, is explained first.
Then how to settle them through a graphical user interface is delineated.
Considerations and examples are also provided.
Ambiguous Cases
In some cases, more than one Tab could be true and give contradictory signals.Example
For instance, what if the currently open position is:
Current position: longand there are simultaneously the signals:
Long Stop lossThe
Stop loss Tab is saying to liquidate the current long position because the stop loss has been triggered.
On the other hand, the Long Tab is saying to go long, but you are already long.
Both of the following are legitimate courses of actions:
- Hold the long position
- Liquidate
Ambiguous Cases Window
Disambiguate Button
Trading Conceiver lets you decide what to do in ambiguous cases.
To do that, press the button
Disambiguatein the Composer. A new window will open up.
Ambiguous Cases Window
This window lets you settle all ambiguous cases, i.e. all those cases where the signals from the various Tabs are not strictly coherent and can give rise to multiple legitimate choices.
The window is divided into three parts:
- Left
The leftmost part contains the true/false values of all the Tabs. AnXmeans doesn't care, that is it could be indifferently true or false. The order is the same as the Tabs appear in the GUI. - Middle
The part in the middle lists the current trade, i.e. the currently open position. - Right
The rightmost part is where you select your choice.
The previous example would be the highlighted row.
Arbitrariness
Clearly there is no a 'right' or 'best' choice in absolute terms. Any alternative is reasonable. You could even make different decisions in different situations. Anyway it is apparent that, whatever option you pick, it introduces some arbitrariness in the results.Further Considerations
Stronger 'Bias'
Consider an example similar to the previous one. Suppose the currently open position is:
Current position: longand there are simultaneously the signals:
Long Liquidate long Stop lossThe difference with the previous example is that now we have an additional liquidate long signal. If in the first example you could tend similarly for both of the possibilities, hold or liquidate, now you have an extra liquidate signal that might make you favor for the liquidate. This of course is up to you.
Stop Loss and Take Profit
Not Necessarily Symmetrical
Stop loss and take profit are not necessarily 'symmetrical' with each other. You could deem one of them more 'important' than the other. That's why theAmbiguous Cases window lists all combinations of ambiguous cases,
where there is just the stop loss, just the take profit or both.
Trading Conceiver lets you make fine judgment.
Can Be Both True
The stop loss and take profit can be true simultaneously, because the stop loss can be trailing. For instance, in a long position, it could trail the price until it goes above the take profit, which on the contrary never changes.Referred to the Current Trade
Remember that stop loss and take profit are always referred to the current position.
Let's take another example, similar to the last one but where now you have:
Current position: shortand the same signals as before:
Long Liquidate long Stop lossNow the stop loss refers to the short position, while before it referred to the long. There are no signals saying to hold short, while there is the stop loss saying to liquidate the current short position. There is no doubt the short position must be closed. The doubt is between going long or just liquidate. The 'strength' is different than before though, because only the liquidate long signal now says not to go long, while before there was also the stop loss, referred to the long position.
Matched Cases
The two cases in the picture are basically the same.
They differ only by the current trade, but either you end up with a long position or with no position, and the strength is the same.
That's why you have only one selection available for both; the other is matched automatically.
Peculiar Case
The pictured case is the only one having three possible choices.
Make your own judiciously.
Final Position
When making your decisions, try to see if you are more comfortable to reason in terms of the trade you end up with instead of the trade you must do to reach that. For instance, in the matched case above mentioned, you always end up either with a long position or with no position. The trade to reach that, however, can be liquidate, hold or long.Dual
Duality
Dual quantities are pairs that, given a rule, can be exchange with each other, and basically give the same rule. All dual quantities must be exchanged in the rule.Example
For instance, let's take our very first example again. The situation is:
Current position: long
Signals:
Long
Stop loss
If we consider the following example, we realize that they are basically the same thing, said in another way:
Current position: short
Signals:
Short
Stop loss
Trading Conceiver regards them as the same thing.
That's why there is only one entry for this in the Ambiguous Cases window.
Dual Quantities
Dual quantities are:long <─> short true <─> falseBy exchanging all (!) of them in the table of the
Ambiguous Cases window, we obtain the dual rules.
Dual Button
To watch dual rules press the button:DualAgain, this if for watching purposes only, for convenience. You can not select different choices for the same dual rule. This is a toggle button; each time you press it, the dual view of the current view is shown.
