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Cs Badge

Close Strategy

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Why is Close Strategy (“Cs” element) investable?

• “Cs” is a what-if analysis on the relative performance of alternative exits

• What would have happened if trades had been closed earlier? (- 50% of actual trade duration, - 40%, etc.)

• What if trades had been closed later? (+10% of trade duration, etc.)

• Cs (Performance vs. alternative closings) is a valuable indicator, particularly in combination with Pf (strategy performance):

• Strategies with good Cs and good performance are solid• Be careful with strategies with good Pf but a Cs below magenta

level… this could be an indication of LUCK (or an entry strategy so good that the trader can afford to not pay attention to closings; checking that strategy’s Os is recommended!)

• Worsening Cs is a good early indicator that a strategy is in trouble – so stay tuned for trends in Cs, as well as overall level

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INDEX

1. UNDERSTANDING CS

2. IMPROVING ON CS

3. QUESTIONS?

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Understanding Cs – Cs Badge

Your Cs level is displayed under Trader -> Challenge

• Color indicates achievement level in TS Elements

• Colors increase in difficulty from left to right• Yellow -> worst Cs grade• Magenta -> best Cs grade

• Indicates progression within Cs• Across all colors• You can also check the percentile of

all traders

• Click on to see a detailed description of the level you are in

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Cs – Diagnoses trade closing strategy

What if a strategy closed trades a bit earlier, or later?Would performance change?

Trade iTime

Trade duration (T)

-50%T Close time +50%TOpen time

P&L

Actual Trade P&L

Time

Return (-50%T) Return (+50%T)

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How does Cs work?

• Cs runs a competition by your chosen exits against 10 virtual “Challengers”

• What would your return have been if you had kept every trade duration 10% longer?

• Similarly, what if you’d kept 50%, 40% shorter, and hanging in for 10% / 20% etc.

• The Cs Chart tracks the cumulative profit gap achieved by your strategy against each of the alternatives:

• If your close strategy comes out on top = you time your closings well!

• If your close strategy comes out at the bottom = time to review…

• The chart tracks both the rank and the gap – where the horizontal line tracks average results for traders with your same trade duration.

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Cs – Understanding the Cs Chart

Bad zone!

Good Zone!

Bad

Strategy worse off than in case of closing trades earlier / later

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Cs – Understanding the Cs Chart

Bad zone!

Good Zone!

Strategy worse off than in case of closing trades earlier / later

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Good Cs – Cumulative lead through good closings

Strategy better off than in case of closing trades earlier / later

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Bad Cs – Cumulative lag through bad closings

Strategy worse off than in case of closing trades earlier / later

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INDEX

1. UNDERSTANDING CS

2. IMPROVING ON CS

3. QUESTIONS?

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Cs – What’s the point?

Cs can diagnose strategies as working, fading, and random (i.e. non strategies)NB: Cs works for independent trading decisions – it doesn’t for trades hedging other trades

If a strategy works, actual Closing outperform alternative closings1

3 When strategies stop working, Cs can anticipate performance breakdowns before they happen

If a strategy is on to a pattern, Cs helps to maximize performance by fine-tuning exits

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Cs when a STRATEGY works

High Cs is powerful indication that a strategy worksWhen a system works, traders pick the best close (because they can)

• If a strategy is on to a pattern• Good entries anticipate a

winning close over a target horizon

• Winning closings outperform most alternative exits over that horizon

• In this case, life is good!• Good entries• Low stress trades• Systematic profits

Haven’t watched “The Incredibles”? Do it now! http://www.imdb.com/title/tt0317705/

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Cs decays once a STRATEGY stops working

Worsening Cs is the first sign of trouble when patterns break downBecause NO strategy works for ever

• When you’re first to discover a pattern• It’s great - for a while• But if your pattern really is a

pattern, others WILL notice it

• Once others notice more liquidity crowds your strategy

• Entries are less obvious• Noisy signals appear• The choice of closing isn’t as

clear cut• Actual closing lag alternative

closings

• Time to move on? Your Cs and your Os badge will be of help!

Haven’t watched “The Incredibles”? Do it now! http://www.imdb.com/title/tt0317705/

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INDEX

1. UNDERSTANDING CS

2. IMPROVING ON CS

3. QUESTIONS?

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Questions?

Trading is hard – no wonder there are unanswered questions!(Why not, together, build a Knowledge Base that answers them all?)

• The Knowledge Base contains TS Mentors’ answers to all your questions!

• Mentors are Traders like you who enjoy helping out, and are voted very good at it, AND

• Trading educators hand-picked for quality and broker independence, who pitch their materials

• Want to contribute? Great!• Post an article / Post• Ask or answer questions• Rate fellow traders’

contributions

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Can you do better?

• This article is a “stub” (an unfinished entry that MUST be improved)• We need your questions & feedback to improve it!• Feel free to post your questions to the TS Knowledge Base

• Have suggestions?• theowl@tradeslide.com can’t wait to hear them• We’d love to credit you for improving our content

• Contributing to this section will boost your mentor score if others like what you post – helping out will reflect on your community standing, which means

• More traders will visit the URL on your profile• When they visit, they’ll request your mentoring!