Discipline Manger Fundamental Logic

Common Misunderstandings:

Unrealized Orders: If "Include Unrealized Orders" is enabled, the Discipline Manager® will calculate intra-trade and instantly close positions if rules are breached. If disabled, the Discipline Manager® will wait until your trade has completed then check if a breach has occurred.

Warning: Disabling "Include Unrealized Orders" could result in a larger loss than your setting parameters allow, as it must wait to realize the amount before calculating for a breach.

Trade Counter: When thinking of the trade counter within Discipline Manager®, you must think of the trade as a touch or change on your account. This means when a single trade is filled you instantly have a negative account change due to commissions, thus resulting in a trade count as #1 and included under "Daily Max Losses" since it results in a negative impact to your account. When the order is closed, that will also create an account change (trade #2) and if negative, added to Daily Max Losses.

You must also keep in mind that in the event of a partial fill your first contract's commission generates an account change and will count as trade #1, when the second contract is filled that commission will count as trade #2. When your first target is filled, that will create another hit to your account resulting in trade count #3, and finally your second target account hit will produce trade #4. The Discipline Manager® only records changes to your account and does not know how many contracts you constitute as "your trade", nor can it control partial fills.

Therefore, when establishing a trade count rule, consider "Hits to Your Account. If you prefer not to use this feature maximize this number.

Algo's using Market Orders: In fast moving markets, algorithms creating market orders could generate an order fill before the Discipline Manager® can cancel the order. If an order is filled faster than the Discipline Manager® can cancel the order, the order will be instantly closed resulting in additional commissions.

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