SlopeRules is taking on an increasingly important place in the world of Slope. Indeed, I have again restructured our menu so that this product can have a home (“Develop“) of its own.
An important impetus for this product is to keep it simple. Just now, I took a glance at one of our competitors, and it’s instantly clear from their tutorial that SlopeRules, young as it is, has already outstripped others in terms of straightforwardness. I mean, just look at this:
I am very pleased to announce that we have once again upgraded SlopeRules, this time with by far the most often-requested feature: Profit and Loss rules! Let me show you how this works.
Let’s take a typical result from a SlopeRules test. This one involves Amazon:
We have now added two new conditions for closing a position: the percentage profit and loss on a trade. In other words, you can declare in your rule set that a hypothetical position be closed the moment it reaches a certain percentage profit (% Profit on Trade) or closed the moment it suffers a certain percentage loss (% Loss on Trade).
You can use either of these rules, or both, or neither. The point is that you can create a system in which you protect yourself from runaway losses and dictate how much profit is acceptable to you without getting too greedy.
So let’s add one simple rule to the SlopeRules used to produce the AMZN trades above. This new rule will simply say that, for any given trade, if the price goes 2% or more below our entry, we will close it at once.
Now the overall charge is 9.7%, an improvement of over 3%, because the average losing trade (tinted in magenta) has been reduced. We have easily improved the performance of our rule set merely by limiting losses.
Thus, you have a way to more precisely articulate your own goals and risk comfort level in SlopeRules, making the product more useful and realistic.
