I'm reposting my original post. Take special note of "it took some years to find a way to make it work". Here, I'm specifically referring to Rule 1. Rule 1 is not vague at all but actually trying to implement it will be a bitch.
I tried all sorts of combinations starting with time based stops and price action stops. I ultimately settled on a "combination" in conjunction with intermarket analysis. I daytrade stocks so I'm heavily watching the s&p and if I don't like what I see I will try and get out at entry, small loss, or protect a breakeven status. Unfortunately, I can't get much more specific than that.
I will say that there is no "correct" solution for rule 1. You just have to tinker around with different combinations of observations until you settle upon something that works for your setups.
The gist of Rule 1 is to avoid having your initial stop get hit in the first place. In this case, don't wait for the market to go against you or vacillate. GET OUT because you are not being proven right. Mark Fisher talks about this as well when he says that you should be one of the few participants buying at a level. If price stays in an area long enough for the "crowd" to get the same price as you, then you're no better off than the crowd.
To get an idea of what I'm talking about. A typical scenario for me will look like: breakeven, breakeven, small loss, average size winner, breakeven, breakeven, breakeven, breakeven, huge winner"