Wednesday, 16 May 2012

I got the following from this page :    http://bigpicture.typepad.com/comments/files/turtlerules.pdf

A complete trading system covers each of the decisions required for successful trading

1. markets - what to buy or sell
2. Position size - how much to buy
3. Entries - when to buy or sell
4.Stops - when to get out of a losing position
5.Exits - when to get out of a winning position
6. Tactics - How to buy or sell

Choose your markets and trade them consistently
When you are trading markets that are dollar denominated - make sure you understand what the dollar is doing - strengthening or weakening.

Volatility - 20 day exponential moving average (ATR)
Compute the True Daily Range
True Range = Maximum ( H-L, H-PDC, PDC-L)
H - Current Day High
L - Current Day Low
PDC - Previous Day's Close

N=(19xPDN+TDR)
       ----------------
                20

PDN - Previous Day's N
TR - Current Day's True Range

Dollar Volatility Adjustment

Dollar Volatility = N x Dollars per Point

22 day - trade up if it exceeds the highest point - sell if it exceeds the lowest point.  exit if there isn't a profit after 10 days.  or if it is 2 N down

55 day break out - you skip if the prior trade had been a winner on the same scale

The best traders followed the rules.  Those who didn't were dropped.

Traders

No trade can incur more than a two percent risk.  Place your stops on a percentage risk basis and then move them up accordingly.

Exit - 10 day low for long positions, 10 day high for short positions
Exit 2 - 20 day low for long positions - 20 day high for short positions.

buy strength sell weakness



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