The “No Breakout” Problem: Why HOLD Signals Are Normal (and Profitable)

You wake up. You drink your coffee. You open the Turtelli dashboard. You see a blank table. No new highs. No new lows. No signals. You check your charts. Everything is just... drifting.

You feel an itch. A physical discomfort. "I am a trader," you say. "I should be trading." So you find a chart that looks "kind of good." You squint at it until it looks like a breakout. You click buy. Congratulations. You just paid the Boredom Tax.

This article is about the hardest skill in Trend Following: Doing Absolutely Nothing.

The Action Bias: Why We Hate Silence

Humans are evolved to act. If a lion is coming, you run. If you are hungry, you hunt. Sitting still feels like failure. In most jobs, if you sit at your desk doing nothing for 4 hours, you get fired.

In trading, if you sit at your desk doing nothing for 4 months, you might be the best trader in the room.

Reframing "Cash": In Trend Following, Cash is a position. It is a defensive position. When you are in Cash, you are not "out of the market." You are "shielding your ammo" for the moment the market becomes rational again.

Edge Comes in Clusters (The Pareto Principle)

Markets do not trend linearly. They follow a "Power Law" distribution.

• - 80% of the time: Markets are noisy, choppy, and mean-reverting. (No edge for turtles).
• - 20% of the time: Markets trend aggressively. (Huge edge for turtles).

This means you make 80-90% of your yearly profit in just 2 or 3 months. The other 9 months are just waiting.

If you try to force profits during the "Waiting Months," you will churn your account down by 10-15%. Then, when the "Profit Months" finally arrive, you have less capital to trade with, and you are emotionally exhausted.

The Tale of Two Traders

How to Interpret "No Signal" on the Dashboard

When Turtelli shows an empty list, it is not broken. It is shouting a very specific piece of advice: "Stay out of the crossfire."

The "Hold" Status:
- If you are already in a trade and the status is "Hold" (no new Buy/Sell signal), it means "Let the trend work."
- Do not take profits early because you are bored.
- Do not move your stop closer because you are nervous.
- HOLD means HOLD.

Practical Tips for surviving the boredom

• Get a Hobby: Seriously. If trading is your only source of dopamine, you will overtrade. Play video games, learn to code, bake bread. Do anything that gives you a "win" feeling so you don't seek it in the charts.
• Automate the Check: Set an alarm. Check signals at 9:00 AM. If none, do not check again until tomorrow. Staring at a sideways chart will trick your brain into seeing a pattern.
• Trade System 2: If you really hate false signals, switch to the 55-day breakout. It trades much less often. It is the ultimate "Lazy" strategy. (See Article 015).

Summary: The "No Signal" Signal

"No Signal" is a signal. It tells you the market conditions are not right for your strategy. Respect it. Protect your capital. The market will wake up eventually. It always does. Your only job is to be solvent when it happens.

A quick, realistic walkthrough (the kind your brain actually needs)

Let’s do a simple play-by-play, because most “strategy explanations” are missing the only part that matters: what you do on a normal Tuesday. Picture this: you scan your list once a day. One market is breaking above its recent highs. Your job is not to guess the top or get poetic. Your job is to follow the steps you already decided on a calm day. If you want the full “start here” path, the hub is Articles.

1. Check the level (the breakout point) and confirm it’s a real “new high” for your chosen window.
2. Calculate your risk using ATR. If volatility is huge, your position will be smaller. That’s not a bug.
3. Place the entry and the stop. Put the stop in the system, not in your imagination.
4. After entry, stop watching every tick. If you must stare at something, stare at your rules.
5. Exit by rule: either a reversal level hits, or your stop hits. Your mood is not on the list.

Sometimes you’ll get stopped out quickly. That’s normal. The system is built around the idea that a few big trends pay for a bunch of small “nope” trades.

Risk rules that keep you in the game

Here’s the unglamorous truth: most people don’t “lose to the market.” They lose to their own sizing. They take a normal strategy and turn it into a stress test by risking too much when they feel confident and too little when they feel scared. Turtle-style risk rules try to remove that swingy behavior.

• Pick a fixed risk per trade (a small percent of your account). Write it down.
• Use ATR for stop distance so you’re not placing stops inside normal noise.
• Size from risk: wider stop → smaller position; tighter stop → larger position.
• Cap your total exposure so one theme (or one sector) can’t dominate your portfolio.

If this feels like “too much math,” good news: it’s simple math. And it’s worth it. Start with ATR sizing.

The boredom problem (and how to stop sabotaging yourself)

A lot of traders don’t have a strategy problem — they have a boredom problem. Trend following is often quiet. That silence tricks you into “improving” the system with extra trades. That’s how people turn a good strategy into a messy hobby.

• Run scans on a schedule (daily or weekly). Outside that time, you’re done.
• Use alerts instead of constant chart-watching.
• Journal rule-breaking as a separate “expense.” It’s usually larger than commissions.
• If you need action, do something else: exercise, build tools, read. Not another trade.

A simple checklist you can follow without thinking

Quick FAQ (because your brain will ask these anyway)

• Do I need a ton of indicators? Nope. Price levels + risk rules carry the system. Extra indicators mostly add extra ways to second-guess yourself.
• Is a low win rate “bad”? Not for trend following. Many versions win less than half the time and still do fine because the winners can be much larger than the losers.
• Do I need to watch charts all day? Not if you trade daily rules. You can run a boring schedule and let the rules do the heavy lifting. The Dashboard is literally built for quick scanning.
• What should I read next? Start with Turtle Trading Explained → Donchian Channels → ATR for Turtle Trading → System 1 vs System 2. Or just scroll to the Further reading section below.

Share-friendly summary (steal this for socials)

Common mistakes (and the exact fix for each)

Most “strategy failures” are just process failures in a trench coat. Here are the usual suspects, plus what to do instead.

• Mistake: Moving stops because you “feel” it’s about to bounce. Fix: Decide stops before entry and treat them like a contract you signed with your calmer self.
• Mistake: Taking every signal in the same sector/theme. Fix: cap exposure and diversify; correlation loves to ambush people.
• Mistake: Changing parameters after a losing streak. Fix: lock rules for a fixed evaluation window (e.g. 8–12 weeks).
• Mistake: Ignoring costs. Fix: assume worse fills on breakouts and test with conservative assumptions.
• Mistake: Overtrading because you’re bored. Fix: schedule scans; outside scan time, do literally anything else.

A simple position sizing example (numbers make this click)

Say your account is $10,000 and you decide to risk 1% per trade. That’s $100. You measure ATR, set a stop distance (often around 2×ATR), and then you size the position so a stop-out loses about $100. That’s how you make each trade equally survivable, even when markets have different volatility.

Example: if your stop distance is $4, you can take roughly 25 shares ($100 / $4). If the stop distance is $10, you take 10 shares. You didn’t “get scared.” The market just got wilder, so you got smaller. That’s the whole philosophy in one sentence.

Want the deep version? ATR for Turtle Trading is your friend.