Hey everyone im all the way in New Zealand, I have recently started trading using the "turtle method" of buying breakouts over a 60 day period (Mentioned in Curtis Faiths book Way Of The Turtle") I scan my charts using a 3month/Daily time frame Im trading equitys on the New Zealand Exchange (i know a very small exchange not even ranked size wise in the worlds top 25 exchanges) I am having alot of success in the short term on paper, but tend to hold on to winners too long and turn a 7% gain into a 2% gain or sell too early during a slight pull back and then it continues to run up. Was just curious to see where some of you trend followers sell? Is it once you have made a certain percentage? Is it once the Price action crosses through a moving average? Is it when the stock closes through a certain moving average? Is it when the stock retraces back to the entry price?? Im just struggling on this side of the trade. What do some of you pro's do? Cheers Benji
Real pros will not disclose proprietary info on an internet forum. Amateurs like myself would suggest checking your average favorable excursion (how far the price moves in your favor before reversing) for all your trades, then put a target or a tiered exit pyramid of limits somewhere around that zone. You can also use a trailing stop based on the same general idea
When the trendline is broken (assuming it's drawn correctly). Once the trader is out, he can then look at both possible shorting ops or re-entry ops.
Here is my latest, sell to early play.... looking back i shouldnt have sold. But hindsights a beeyatch, Where would of some of you guys sold?
If it breaks a previous S/R level I cut my position in half and adjust my stops to my average entry price.
Oh i see , after the run up there is a consolidation period with a new support @ around $3 - $3.05 , then another run up, so if after the next run up and there was a gap down through the $3 support level you would halve your position?
For the most part, I would have played it as you did. It's easy to say "I shouldn't have sold" in hindsight, but, in real time, hesitating to sell can easily mean holding on while a profit turns into a loss. As long as you're willing to re-enter, the amount "lost" while you reassess the situation is relatively trivial.
Yeah its quite hard especially when in the past i have held stocks that i was "up" in and held during a drawdown and eventually ended up in the red. Another break out forming. What do you guys use as "confirmation" in regards to a break out, check out this stock currently breaking out in accordance with the "Donchian 4 Week Rule" - 20 day Break out pattern, which i also use in addition to the 60 day break out rule as applied by the "turtle traders"
Assuming the point is to follow trend and catch big moves, you might want a trailing exit. Are you able to backtest? Finding a sensible exit is much easier by backtesting ideas. Test a second channel as the exit, and vary it from shorter periods to longer ones. You should arrive at something reasonable.