Good Trade Gone South

When actual volatility exceeds expected volatility, the trade profile (in red) is typical. In hindsight, it seems kind of ridiculous not to take a percentage of the gains off the table, but doing so using a systematic approach would result in reduced gains in longer trending markets. Multiple buy/sell signals would occur, in whipsaw fashion, as price swing tolerance decreases.

The white horizontal line represents the trigger area for setting a stop that would have occurred if the gains rose to that level. A 22% gain receives no more attention than 2% gain, in this example.