[kero]

So now my question: how do you deal with that kind of problem ? Do you have other ways to follow a medium term trend ? Do you use some SMA to handle the situation ?

One problem you are always going to have with smaller European and UK stocks is that they simply don't have the liquidity for them to behave in the way that US stocks do, where trading volumes are much larger, and hence make stop loss positioning incrediably difficult, as they will experience far greater volatility because of this.

The 50 day SMA is a good rough guide for shorter term trades, as when a stock starts to close below it for more than a few days, and can't get back above it, then it's normally sign that the momentum has been lost, and so you can manually exit, and then you can always set a buy-stop order to get back in if it closes back above it again.

The trader method isn't very well covered in the book, as Weinstein doesn't consider short term moves to be very important, as he was mostly concerned with the investor method. So I'd recommend reading about other shorter term methods that compliment Weinstein's trader method to get more detailed info on best practices, such as O'Neil's CANSLIM method, and especially Mark Minervini's excellent book, in which he expands on Weinstein's trader method. These two differ in that they also look at fundamental data, but you should absorb the additional technical information especially, and great advice on risk management and stop losses from these. And the excellent info on the Volatility Contraction Pattern, Cup and Handles etc.

Thank you for your answer, and specially for the bibliographic references. I'll include them on my basic trading readings.

It is true that European stocks are often less liquid and experience sharp moves. It's something I'll have to better consider in my positions.

Though, I'm not sure this volatility point is the main point in the problem I was asking about. The test case I posted is about one of the major French big caps. Also, when I have a look to US stocks, the same difficulty arises.

The feeling that I have, is that the problem comes from the fact that there are a lot of different trend structures (which is true on any market: UK, US, French...). When popping out, some stocks make sharp big moves and then lateralize. Other move up regularly. Some make frequent corrections to the SMA30w, other prefers to consolidate on the SMA50w, and other barely touch any major SMA for months. Still more important: this difference in the trends depends from the structure of the stock itself, but also on conjunctural condition. A stock can make an uptrend consolidating on the SMA30w, and 5 years later, consolidating on the SMA20w.

I have the feeling that this difference between stock-trends is not so much a problem when acting with the Investor strategy. But it becomes more problematic when acting with the "trader" strategy. That's why I've thought to the solution which I expose over here, which is thought as a strategy to deal with this problem.

That's why I'll read with great interest the books you indicated. Anyway, I'd still be interested if you or others have other indications about the best way to follow a medium term trend.