Don’t cut your winners - add to them. They're hard enough to find in the first place. Even though they are trades, look to hold them for as long as possible.
Everyone sees the same moving averages, breakouts, and pullbacks. Everyone is looking at the same contracts and stocks.
So how do you make the monster gains?
You can be lucky, you can bet big, OR you can have a winning trade and decide to stick with it and add to your winners.
If you are using ATR to measure your risk you can add a new risk unit every .5 ATR away from the previous entry. Base your new entry on the previous fill, not the system generated price.
For example, if you got long at $60 and the ATR is $2, then the next entry will be at $61.
This is discussed in detail in Way of the Turtle by Curtis Faith.
The Turtle Trading Rules generate very erratic returns. In today’s environment, the results are too volatile to garner allocations from global macro hedge funds. You will be measured on your daily vol. Back in the 70s and 80s, traders were evaluated on creating large gains. That’s not the case today.
IF you consider trading these rules for yourself - beware. The drawdowns are large and can range from 30 to 60%. You will still have to modify them.
You can vary the size of your second entry and add a smaller size to your existing trade.
The Turtles added the same size risk unit at each entry point. That means they’d enter the market at 60, 61, 62, and 63 - using the example above - all with the same size.
With the market vol being where it is today, you could likely go home long 3 risk units at 60, 61, and 62 and the name would pull back to 62 and you’d be at break-even with 3 risk units on.
In order to avoid that, you should consider adding smaller risk units to your initial trades. If your first risk unit has 4 contracts, consider adding 1s or 2s to the existing position. In the event of a pullback, it won't hurt as much. Of course, you need to test these ideas to get a feel for how such trades will behave and see if you are compatible.
Another method is to add to your winners above the next level of resistance.
In order to win big, you need to know yourself more than any other part of your trading.