TurtleTrader comment Trend following rule 7 violation Prediction talk is just plain wrong
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I never doubted that he gave me his honest and best opinion.
I transmitted this information to George and we decided that if nothing happened by the end of the week, we would liquidate our positions and take our profits.
TurtleTrader comment: Trend following rule #8 violation. Profit targets are a huge mistake. He had no pre-defined plan for exit.
That's exactly what we did. This was in late October 1979. So why was this my worst trade when in fact it was the biggest profit I had ever made up to that time? Because, within 30 days after we got out of our position, the Hunt silver corner took hold. Silver went crazy, going up the permissible limit day after day. It did not stop going higher until it hit $50.00 an ounce in January 1980. George and I had been long silver for nearly two years, and had we stayed with our position for just another 30 days, we would have been forced to take a huge profit. We both vowed never to calculate how many millions we left on the table.
TurtleTrader comment: Trend followers such as Bill Dunn, Rich Dennis and Ed Seykota did not make these mistakes. Please don't write us and say, that was 20 years ago. The lessons of proper trading are timeless. We used this example since Melamed presented such a clear story of the wrong way.
Red Paragraphs from Leo Melamed's book Escape to the Futures.
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