I came here from google actually looking for variations on entry signals. Here is a decent basics for trend following: http://www.followingthetrend.com/the-trading-system/trading-system-rules/ It only lists ATR stops, but you can have other stops, such as consolidation support levels, macd, 50 day (really whatever moving average has acted as support during it's run up) or trendlines (those will get broken often, so you'll be in and out more) As someone else had said, 7% is too low. You likely sold too soon, not too late.
Hi Benj: breakout trading position trading stocks is a good way, if not the best, for breaking into trading. As suggested the exits are important. Before that, making a satisfactory Universe for trading is very helpful for making money. When you go beyond Turtle type trading, you will get into having good Universe selection. To solve your current problem do a couple of things: Use the information of the BO to draw a channel. Hold through the formation of the points 1, 2, and 3 of the channel. Use adjacent daily bars to form the sub trend trendline going from point 3 upward with a positive sentiment. Connect the HL's, in other words. Connect a parallel line to the highest volatility bar of the two you used at and after point 3. This sub channel will be used to form the exit. Since you use the lagging orientation of the Turtles the signal fro your exit will be the BO of the RTL of this sub channel after the point 3 of your Turtle trading. Caution if you get a post like one from Bashanontrader, ignore it. He has learned there is no system of exits. My solution above prevents you from the early exit. It keeps you in the trader through the tend retrace. then it takes you along the third move of a common trend up to the point where the trend ends and a little further. where all trends end is that point where the traverse of the channel fails. (on increasing daily volume.). It is too early in your cerreeer to show you how to do more sophisitcated trading. However, one way to exit a position held is to notice you have a better trading entry. As you become more skilled at picking your trading Universe of stocks, you wil begin to have stocks that, if they break out again, will be worth the ride.
The one and only jack hershey, it is an honour! Yes since i first posted and started this thread i have been making up excel spreadsheets , of historical data from certain stocks, calculating the true range, then calculating the ATR over "X" time frame , and multiplying the ATR x 1.5, to allow for swings on either side of the volatility, and using these results for my stops. Your thoughts?
thanks for replying. Very good job. you can use the excel to rank your growing list in case more than one is going off at the same time. Also you are setting selection standards that are appropriate. Probaly another good thing to do is keep trak of the length of these break outs and the time between break outs. Both periodicities are helpful for anticipating the future. I usually stretch out the turtle viewing to include six months. Also I regard the rep rate of the cycles of trading to be important. I like to see 5 opporutunites in six months. the team I am trading with now is looking at foreign exchanges. we do not need to bring profits home to the US, but we would like to know where to dump profits to help solve local problems. I am so glad our 12 meter guys can secognize who knows how to sail best. we sure did learn how to get the hulls out of the water from your expertise.