I am trying to understand how the parabolic stop works, but do not fully understand how to set it up.
I have looked here:
NinjaTrader 8
But still do not understand it.
SetParabolicStop(string fromEntrySignal, CalculationMode mode, double value, bool isSimulatedStop, double acceleration, double accelerationMax, double accelerationStep)
EntrySignal is clear: I have a name (to match the entry) or I leave it blank.
CalculationMode is clear: I use ticks.
Value: is it where the stop is initially placed (from the entry signal)? Say 20.
Acceleration: is it how fast it moves towards the current market price? Say 1. Does this mean that the stop moves by 1 tick each time the price moves 1 tick towards the profit?
AccelerationMax: is it how fast it can move towards the current market price? Say 5.
AccelerationStep: is it how fast it increases the speed? Say 1.
What should happen in practice?
The stop is initially 20 ticks below the entry. As the price moves towards the profit, the stop moves towards the price 1 tick at a time? 1 tick per tick, or more? When does it start accelerating? How does it do it? Does it mean that it then moves 2 ticks for each tick of movement of the price towards the profit? Up to 5 ticks per 1 tick of movement of the price towards the profit? Is this how it is supposed to work? Does it increase by 1 tick (AccelerationStep) each tick of movement towards the profit until it gets to the AccelerationMax?
Thanks
David
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