To Chase or Not to Chase...

Certain strategies are more sensitive to missing trades than others.

For example, a fast-moving stock generates a signal, and even with full automation, you miss the trade.

Depending on the nature of your strategy, this could be a minor annoyance or a Big Deal.

One way to determine how important these are to your strategy is to omit a small percentage of the winners from your backtest and then see how the equity curve looks without them.

You won't be able to get 100% of the trades, but analyze what it would look like to get only 90% of the winners but 100% of the losers.

You should learn how important missing a big winner is to your strategy.

Then you can determine how hard you should "chase."

That is, your order wasn't aggressive enough to get a fill for your entry, so you retry at a more aggressive price some time later.

This can be very important to your strategy.

The right way to approach this is to start conservatively and measure results, then slowly get more aggressive over time.

Here's what this looks like in the MabeKit Trade Client:

This advanced setting tells the Trade Client to use a limit order at the bid - 0.05, but only after the original entry order times out unfilled.

You can also use an expression for the chase limit price to make sure it hasn't gone too far from the original signal price.

You shouldn't chase at all costs, so figure out how important it is and chase with precision.

-Dave

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