There is another old saying: “you can never go broke taking a profit.” The Turtles would not agree with this statement. Getting out of winning positions too early, i.e. “taking a profit” too early, is one of the most common mistakes when trading trend following systems. Prices never go straight up; […]

Trade Exits

here is an expression that, “There are old traders; and there are bold traders; but there are no old bold traders.” Traders that don’t use stops go broke. The Turtles always used stops. For most people, it is far easier to cling to the hope that a losing trade will turn […]

Trade Stops

The typical trader thinks mostly in terms of the entry signals when thinking about a particular trading system. They believe that the entry is the most important aspect of any trading system. They might be very surprised to find that the Turtles used a very simple entry system based on […]

Trade Entries

Position sizing is one of the most important but least understood components of any trading system. The Turtles used a position sizing algorithm that was very advanced for its day, because it normalized the dollar volatility of a position by adjusting the position size based on the dollar volatility of […]

Position Sizing

A Complete Trading System covers each of the decisions required for successful trading: Markets – What to buy or sell Position Sizing – How much to buy or sell Entries – When to buy or sell Stops – When to get out of a losing position Exits – When to […]

The Components of a Complete System

Floor Pivot Points The floor pivot points, presented in the first column of the calculation results table, are the most basic and popular type of pivots used in Forex trading technical analysis. The pivot point is interpreted as the primary support/resistance level — the point at which the main trend will be born. First-third level resistance and support points […]

Pivot Points

Average true range (ATR) is a technical analysis volatility indicator originally developed by J. Welles Wilder, Jr. Wilder designed ATR with commodities and daily prices in mind.  Commodities tend to be more volatile than stocks.  You have days which are subject to gaps and limit moves which occur when a […]

Average True Range (ATR)

Accumulation Swing Index The Accumulation Swing Index (Wilder) is a cumulative total of the Swing Index. Interpretation: The Accumulation Swing Index may be analyzed using technical indicators, line studies, and chart patterns, as an alternative view of price action. Parameters: Limit Move Value Aroon Index and Oscillator The Aroon indicator […]

Common Trading Indicators

Bollinger Bands are lines plotted in and around the price structure to form an “envelope.” It is the action of prices near the edges of the envelope. Bollinger Bands are based upon a simple moving average. This is because a simple moving average is used in the standard deviation calculation […]

Bollinger Band Indicator

Exponential Moving Average reduces the lag by applying more weight to recent prices relative to older prices. The weighting applied to the most recent prices depends on the specified period of the moving average. The important thing is that the exponential moving average puts more weight on recent prices. As […]

Exponential Moving Average Indicator