Question

What is filter rule? What is the conventional wisdom of using a filter rule?

What is filter rule? What is the conventional wisdom of using a filter rule?

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Answer #1

Filter rule is rule of trading in which a trader will be deciding various range bounding percentages and filtering it for his trading and decision making so that his risk is completely managed.

it is a risk management strategies by various traders who knows there risk tolerance capabilities and they are always setting a filter in order of certain percentage for certain range so that they will be always executing their orders in those percentage ranges and maximizing the overall rate of return.

The wisdom of using a filter rule is that the losses are always minimised and there is always a range which are predefined at support and resistance so that the trader would be either booking his profit or taking out his losses so that the risk is properly managed.

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