How to choose the best stocks and live trade by Dr. Hui Liu | Algo Trading Week Day 2

[@mikiallen7733]

Hi sir, thanks for the nice effort , just quick question, how do you set up your PT and SL on stocks or any liquid financial instruments ? Given that these don't have gaussian returns , so in fact using a standard sample statistic like sample SD is actually misleading , so what do use instead to decide on PT or SL or both ? Best regards

[@quantinsti]

If you feel the classic statistical way to calculate take profit and stop loss is misleading, you can run multiple backtests with different PL and SL to explore the best settings.

[@mikiallen7733]

@@quantinsti thanks but have you published any article on what is the best way to go about multiple back testing say using MC ?

[@quantinsti]

@@mikiallen7733 Sure, Miki. Here are some blogs that you might find useful: Theory - blog.quantinsti.com/introduction-monte-carlo-analysis/ Practical - blog.quantinsti.com/monte-carlo-simulation/ Practical - blog.quantinsti.com/portfolio-optimization-maximum-return-risk-ratio-python/ By multiple backtesting, if you mean that you want to check various scenarios that can happen in backtesting through a simulation, the above links are useful. In addition, to the above, you can also check out this article that goes into additional technicalities: towardsdatascience.com/improving-your-algo-trading-by-using-monte-carlo-simulation-and-probability-cones-abacde033adf We hope this helps.