|
PureBytes Links
Trading Reference Links
|
"After a trade hits a certain profitability milestone,
be quicker to exit."
I'm sure it's an old old idea. However when I poked
into my little collection of books, I couldn't find
any mention of it before 1990. Kaufman 2nd edition
(1987) doesn't appear to mention it, nor does
Schwager's Complete Guide (1984), nor does
Jesse Livermore's "How to Trade in Stocks" (1940),
nor Dickson Watts's "Speculation as a Fine Art" (1885).
Probably I'm mistaken and probably someone having a
better talent for Library Science will correct me
with a reference to the idea dating back to 1843.
But the earliest mention *I* can find, is in Bruce
Babcock's product "Gann Pivot", dated 1990. Although
Bruce is dead, his company (Reality Based Trading)
continues to sell Gann Pivot.
Lots of other vendor systems include the idea too.
Chuck LeBeau's "25 X 25" (1999) is one example.
Long Term Trading's "Ready Set Go" is another.
Peter Waite's "Andromeda" uses the idea, and
so do quite a few more.
on the Omega List, I wrote:
One generic approach that seems to work well
is the following.
1. Add two new parameters to your system,
"Thresh" and "tighter".
2. Add a rule that when a trade moves in
you favor by "Thresh" amount, you'll
move your stop tighter (protecting more
of your profits) by an amount "tighter".
You can make "Thresh" be ..blah blah blah...
You can make "tighter" be ..blah blah..
|