Nizar :-) , with PRC i wonder why you didn`t have a close trailing stop and also why you bought more when it is downtrending.Do you see a resumption of uptrend?
With the PRC top of almost $2.00 and me getting out in the $1.40s, you are asking quite a valid question.
Trailing stop placement is an art form in itself, as you want to give the stock room to move in order to ride the longer term trend, and on the other hand, you don't want to give back too much profit. Unfortunately, giving back open profit is something you have to get used to when you are trading a long term trend following system.
My placement of the trailing stop as used in this system is one that worked best during rigorous backtesting. Over hundreds of trades over hundreds of tickers and over 10 years. What works best most of the time. I tried tighter stops and looser stops and MA stops and ATR stops and everything in between. What I use now is what worked best on average.
In terms of buying more, my pyramiding is based on percent profit, and this too was rigorously tested over hundreds of trades over hundreds of tickers over a long period of time.
I have no opinion of whether or not the stock will resume uptrending. I just do what my system tells me to do.
I started out in trading early 2005 through managed funds.
November 2005 started in stocks through fundamental analysis.
After the 2006 May correction I learnt to use stops!
A few months afterwards I read Michael Covel's book and it was a real eye opener for me into what can be achieved through mechanical systems trading.
In 2009 I started looking seriously at short term automated trading through AmiBroker/IB as this would allow for all the benefits of short term trading (smoother equity curve, faster recovery from drawdowns, etc) without the associated screen time.
4 comments:
Nizar,
In the table of closed trades, u need to provide a sum total of the p/l column so we can see that 'jump' u spoke of.
Cheers,
Jeton
Hi Jeton,
Yes I agree and will fix it accordingly as of next update.
Thanks for the feedback.
Nizar.
Nizar :-) , with PRC i wonder why you didn`t have a close trailing stop and also why you bought more when it is downtrending.Do you see a resumption of uptrend?
Hi Wsiwyg,
Thanks for dropping by.
With the PRC top of almost $2.00 and me getting out in the $1.40s, you are asking quite a valid question.
Trailing stop placement is an art form in itself, as you want to give the stock room to move in order to ride the longer term trend, and on the other hand, you don't want to give back too much profit. Unfortunately, giving back open profit is something you have to get used to when you are trading a long term trend following system.
My placement of the trailing stop as used in this system is one that worked best during rigorous backtesting. Over hundreds of trades over hundreds of tickers and over 10 years. What works best most of the time. I tried tighter stops and looser stops and MA stops and ATR stops and everything in between. What I use now is what worked best on average.
In terms of buying more, my pyramiding is based on percent profit, and this too was rigorously tested over hundreds of trades over hundreds of tickers over a long period of time.
I have no opinion of whether or not the stock will resume uptrending. I just do what my system tells me to do.
Hope that answers your questions.
Nizar.
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