Wednesday, March 14, 2012

Just Follow The System


I exited my most profitable position today, not because I wanted to, but because the system told me to.

I am now left with 7 open positions, with about -$3,700 in open equity:

2 Big losers
3 Little losers
2 Little winners

Not exactly the way I like to see things - I like to keep the winners, and jettison the losers.  But, the losers haven't reached their stop points, so there is still a chance (ugly word: "hope") that they will recover.

Remember: my position is always to follow the system, until the system shows that it is no longer viable.  So, there are times where I don't like what it is doing, but from experience I know that following the system is best in the long run.


2 comments:

  1. It is times like these that mechanical trading systems became hard to follow. We have heard this too often "Cut your losses and let your profits run". For which, I ask "run until when", forever?

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  2. True, no one tells you the answer. One way is to have a trailing exit. That way, if the trend changes, you will get out before the trade turns too much against you. Some people, though, stay in until a reversal signal hits.

    Like everything else in trading, there is more than one right way.

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