Let me drop in my $.02.
Dan, good presentation on TG1, thanks.
We touched 2 methods of protecting downside. DGH buys back short PS and than thinks of next course of action. JoeA use shorter time long PS.
Both methods are valid and have place in traders repertoire. Imo, it is mistake to limit yourself to only one.
In general, 'buying back' method is preferable in high vol env, when long PS is better (usually) in low vol.
To me, DGH way of placing GTC order is bit costly. If you trade more lots it can eat good part of profits, also is susceptible to 'riding stops' actions. On other hand it does not require much of traders attention. JoeA's method delivers constant drag on pl but enables bigger profits in cases where spot reaches center of main structure and bounces. DGH already locked in the loss where JoeA can patiently sit over because he has hedge already in place and is not affraid that much of max loss.
By comments to JoeA's, I suspect DHG has bit different point of view on how to deal with long PS, and I admit I don't fully understand it.
Using calendars or BFlies is another way to protect downside but, imo, has so many disadvantages that shouldn't be consider as primary tool.
I also tend to use long PS approach as it gives me greater flexibility. Best results are obtained when tools are used appropriately to what is in front of you. One shoudn't use hammer to fix everything.
There are of course other methods to protect downside, like adding full structure below main one - to be same type as main (Boxca, BWB), or regular condor/ Bfly or uphill fly or other depending on market conditions. Power is in knowing what and when to use.
Choosing downside defense impact of actions on upside...