Wow talk about post from the past. This was one of my few fruitful discussion I started way back when Zee was discussing Decision Moose and his Ride the Wave strategy. It was a very long and productive discussion.

There was two different thoughts about implementing a profit latch with the first being once a holding reaches X% (15-25% I believe was the optimal "mound of toast"), you sell the whole lot, be happy with that gain and wait for the next signal. The other thought was when you reach you X%, you cash out a a certain % of your holding and continue holding the rest in hope for further gains. Reason behind this is there was several cases where you continued to hold the same equity for several months and missed out on another big 30% move while sitting on sideline waiting for a new signal.

I personally have adopted locking in a profit of a certain portion of my holding and let the rest run till it hits another profit latch or falls off the screen. Overall I think this has helped my portfolio return & volatility by locking in profits, having a cash cushion on the sidelines all while still keeping me in the game. However other single outliers like NVDA & ANET it has hurt by not holding onto my full initial investment for the last 2 years.

Here is the original link to the thread, however it is no longer working. If anyone has an archive of the old MF MI pages it would be great if we could revive it for further backtesting and discussion.

discussion.fool.com - Profit latch with screens

Peace,
Opihi