In our example from last week and this week we are looking at the same date...10.15.12..so as to clarify that the signals do align with considerable precision. Last Friday morning's signal of a new XLF/TLT position caught the bull break in TLT and ..frankly...ran further than I had expected. Based on the TradeStation Report, the average duration of the TLT side of the trade is 5 days and I'll be looking to exit on or before that time.
It's often said that anyone can enter a trade...it's how you exit that defines you as a trader.
One of my favorite prop shops, Bright Trading....out of Las Vegas, routinely use a 1/3 ATR8 (8 period average trading range) to exit positions with great documented success. Of course Bright only daytrades so that must be considered in any attempt to mimic their safety net..
Next Monday we'll conclude the XLF/TLT setup with a simplified version compliments of ETF Prophet.
If there's sufficient interest I'll post the daily status of the XLF/TLT trades in conjunction with the upcoming revised Situations format, which will be based on a revised T2 model with new money management tactics.