Trend Following System I come from Malaysia. I am new to this forum and some of you must be wondering what happen to this stock trader all the way from this small country doing here. My main objective is to know and talk to more traders and also by posting my Complete Trading System here I hope that some guru trader here will point out for me what is right and wrong regarding my trading system. I should say that I am no good in technical analysis and not even a super trader. I learn my trading knowledge by reading book and also from some articles I downloaded from Internet. I have tried many trading system but either it was because I cannot fully understand them or maybe because of they just do not perform as promised by the system vendor. I still don't know the main reason. After trading the market for quite a long time I came to realize that a lot of the common knowledge or logic in stock market were in fact a setup for trader to loss money. The simple logic such as Buy Low Sale High in fact is asking a trader to buy on the downtrend and sale on the uptrend which I now know is the sure way to loss money in the stock market. But I have heard this term again and again in TV in financial newspaper. I eventually came to realize the meaning of The Trend is Your Friend. You must respect the market. You need a trend to trade for profit. You buy on uptrending trend and you sell on downtrending trend. Based on this simple logic I then come out with this complete trading system which I can trade with 100% confidence. It is a very simple trend following system. I use trendline to identify the price trend. I know there is no rule in this world saying that on trendline breakout the price cannot come back down so I know I need a good money management plan. And not to against the market trend I know I cannot do averaging down business. If the price reversed back down End of the Story. I never do such thing as cost averaging down and buy on dip or buy on cheap. So this is what I do. On the direction of the trendline breakout, I enter my trade position using the following method. 1st entry: 10% of the risk capital on P price 2nd entry: 10% of the risk capital on P x 1.05 (here we know the price is on uptrend and we have enough profit buffer to get out from our position once the trend ended here) 3rd entry: 10% of the capital on P x 1.05 x 1.05 (more profit buffer at this point) 4th entry: also the same Using this method I keep on adding my winning position and I never set a price target because I just follow the trend and along the way I buildup enough profit buffer to move on to my next trading position because the price is doing higher high. To calculate my Exit and Stop price I use Trailing Stop. Either the price pull back says 3% from the highest high or the price at the cut loss point of 2% of my risk capital. Please comment on my trading system! Or if you cannot understand what I am saying I will explain more to you. TQ

g_stockman, thank you for your reply. I have done a costing simulation as follow using the above stock as example. All of you please comment on this method. The main idea using this method is that instead of putting 100% of your risk capital at one go and set your cut loss point at 2% of the capital, I use a scaling method to add to the winning position and on each level still stick to the 2% rule. To make thing simple I didn't inculde the trailing stop here and didn't stick to the 10% rule on capital allocation. All the best to you all. Have a nice trading day. Capital 10000 Stop 200 Price Unit Cost Acc Unit Total Avg Cost Stop Stop Price P1 11.00 300 3300.00 300 3300.00 11.00 0.67 10.33 P2 11.55 250 2887.50 550 6187.50 11.25 0.36 11.19 P3 12.13 200 2425.50 750 8613.00 11.48 0.27 11.86 P4 12.73 100 1273.39 850 9886.39 11.63 0.24 12.50 Profit 937.41 ROI 9.37% In case the above table is not clear. use the following image instead