Conservative vs Optimized Window

The conservative window allows you to trade the same stock but allows you to take profits earlier because the profit Target and Stop Loss calculations are less aggressive than the optimized window.

What does the software do to find optimized exits?

Our exits (profit target and stop loss) are based on the Average Daily Range (ADR). The Conservative Profit Target and Stop Loss are simply 2 x ADR for the Profit Target, and 1 x ADR for the Stop Loss. The optimized Profit Target and Stop Loss will vary because they are calculated looking back at the entire year…the software looks for the best profit target and stop loss using the ADR to determine the optimized exits.

Question: The PXO lessons on combining Conservative & Optimized Exits shows how to combine if the Stop Loss is the same for both. What about if they are different?

When we are combining the conservative and optimized targets, we use the OPTIMIZED position size and stop loss, So we don’t combine the stop losses…just use optimized, and the 1/2 of our position will use the conservative profit target and the other half will use the optimized profit target



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