Monday, March 31, 2014

Changes in my exit rules

I've made some changes in my exit rules and updated my trading rules to conform. Read them in Google Docs format at "Private Trader: Rules for Shorter-term Stock & ETF Trades".

The major impact of the changes will be to tighten my stop/losses. This will produce more trading out of positions, adding to the commissions, but will limit losses.

The stop/loss on my current positions will be continued if the price has already moved beyond the new exit-signal levels. Otherwise, I'll apply the new rules immediately.

I've bold-faced the changes, including a section with strike-throughs that I've eliminated.

Here is what has changed:
  • The 10-day price channel is no longer my exit signal.
  • For an exit signal, I'll be using twice the average true range ("2N" in Turtle Trading parlance) as a floating stop/loss adjusted daily based on the close.
  • Exit signals will still require next-day confirmation by the symbol closing beyond the exit-signal level.
  • I've eliminated the "Additions" section, which I'm no longer using.
  • Removal of symbols from the Roll List remain unchanged, based on the 10-day price channel.
  • I've added a section on the Watchlist with removal rules that also use the 10-day price channel.
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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