ZoneTraderPro

Statistics FAQ

5. How are breakeven trades figured?

There are two types of breakeven trades. the first type of breakeven trade is a trade that initially goes in your favor by 4 to 5 ticks and trades into a typical reversal. Because you are prepared for the typical reversal, you may actually exit this trade at a profit, however the trade record will show this as breakeven. The MFE and MAE that was attained IS NOT included in the statistics breakdowns unless specifically noted.

The second type of breakeven trade is the one that goes against you significantly. In the below example the market actually trades 6 ticks higher (which is defined as a winning trade) after the trade is exited at breakeven. However, it would be bad trading practice to have held the position for a profit. The market had shown us that it was weak and in a strong bearish trend. A better trading decision is to protect your capitol and exit the trade. In this example you may choose to immediately enter a short after exiting or waiting for further weakness as the market traded up another 6 ticks, but the trading lesson here was that if you entered the countertrend long trade, the market showed its' hand, and to protect capitol exiting the long position at breakeven is a good decision.

6. How are losses figured?

Losses are figured in two ways. First there is a hard stop at 12 ticks from the entry point.

Second, when there is a significant adverse excursion, as described above, we would ideally like to exit the trade at breakeven. However this is not always possible. In the example below the market had traded against the countertrend short trade and into a strong trend resistance zone area. This is not the market reaction we had expected, so the reasons for the trade are no longer valid. In fact we now want to be long. As the market approached breakeven it never traded there. After trading 4 bars 1 tick above breakeven, the market found support and traded higher. In this example the loss would have been recorded as 1 tick, however in live trading it is your judgment call that determines the actual loss on a trade like this. The loss in this case can only be recorded as the best possible exit, but not the likely possible exit. There is no other way to figure this statistic other than calling it a full loss, which would not be realistic either.

7. On the statistics and index pages you say what the maximum favorable excursion or potential profit was. Does this include any MFE from trades that were breakeven or losses?

No. It was from winning trades only.

8. You say the entry point of a trade is based on the worst entry point possible. Please explain.

The entry point is calculated based from the point closest to the zone. In the example above from the losing countertrend trade, you see the red line start before the zone is reached. ZoneTraderPro will start to paint a blue arrow one tick from the zone, and if that is the closest it gets to the zone, that is the entry point.

If you have a question that was not answered here, please send it in and it will be addressed.

8. Moving the stop after a favorable excursion of 4 or more. All trades after 5-14-07 will have this rule applied. The entry into a trade is mechanical for the ZoneTraderPro rules. The exit however is not. The example is from 5-1-07 at 1318 hours and was recorded as a full loss in the trading record. The entry into the trade is at 1485.00 and the market initially trades down 5 ticks to 1483.75, triggering the rule. This was a test of the previous low at 1483.25, and the market reversed off of this test.. The new rule will place the stop at 1485.00, and not 1488.00. It should also be noted that in live trading the trend sell arrow appeared on the 1318 hour bar as the market traded 1 tick from intermediate resistance. The trend arrow ends up on the 1325 hours bar because the 5 tick retracement did not touch a minor support zone.

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