Forum

I noticed you had this little snippet in the code:

   ' find the starting high water mark for the given ticker
   public Function GetDefaultStopMark ( ticker )
      dMark = ticker.GetProperty("Avg. Basis")
      ' if there are no current holdings or the current price is higher, then set the high water mark from the current price
      dTickerPrice = ticker.GetProperty("Price")
      If (dMark = 0 Or dTickerPrice > dMark) Then
         dMark = dTickerPrice
      End If


I understand that the Avg. Basis is only available if there is an open transaction on the ticker, but what is the significance of using the avg. basis to set the DefaultStopMark?

Here is how I see the code:
if dmark = 0 (if the avg, basis is zero, then we have not entered a transaction on it) OR tickerPrice > dmark (the price is higher on the ticker than the avg. basis so set the dmark to the tickerPrice)
otherwise, we will keep the dmark set to the value of the avg. basis.

The confusion I guess is that I cannot understand why we would want to keep the avg. basis value if it is higher than the ticker price. My guess is that we are already in trouble on the ticker if the price is below this value.
 

Larry E. Hayes
Investors Haven

> The confusion I guess is that I cannot understand why we would want to keep the avg. basis value if it is higher than the ticker price. My guess is that we are already in trouble on the ticker if the price is below this value.

Yeah, pretty much. I figured that if the goal of the stop is to mimize your losses, you should base it on the higher of the average basis and current price, rather than just the current price. Of course this is also one of the reasons I posted the code; if you want to change how it calculates the initial high water mark, it's easy.
      
Anatoly Ivasyuk
DTLink Software

No the code is fine, i am more interested in your insights on it. Is the avg. Basis a good method of determining a level for a stop loss?
      
Larry E. Hayes
Investors Haven

I think so, but that's just my opinion.
      
Anatoly Ivasyuk
DTLink Software