STOPLIGHT TRADE (MEAN REVERSION)
The Stoplight Trade takes Filtered AMACD and PowerZone markers and trades with 2 simple Bollinger Bands,
using the markers as entry points and bands for exit points. When the market reaches the upper band and plots a Behavioral Sell Marker, we go short in the market (emini S&P) until the middle and lower bands for targets. When the market reaches the lower band and plots a Behavioral Buy Marker, we are long in the market until the middle and upper bands for targets.
The Stoplight trade is currently 60% profitable, with a better than 1:1 Risk Reward ratio. It demonstrates the effectiveness of the Flux Capacitor Behavioral Turning Points as entry times.
MARKER TRADING TECHNIQUE
One day, one of our clients asked us outright, "Why don't you just trade the marker signals?". To be honest, we had never even considered using them as raw entry and exit signals. When we applied a simple strategy to the markers in the Gold futures, the resulting equity curve is below.
The trading rules are simple...when a marker appears between 7:50 and 12:00PM EST, go long or short at the close of the bar with a 1X ATR Stop (14 period) and a 2X ATR Target (we use an ATR+1 tick stop just because we hate to see our stops hit, and then targets acheived). As you can see, using these markers as a straight entry signal on a 1 minute chart reveals a model with a positive expectancy.
Note:
Do not trade any system before adequately backtesting it, applying responsible risk control and money management principals. 94% of day traders fail within their first year of trading. These principals are at the core of what is taught in the classes and training seminars. Without them, no system will produce profits over time.
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Statement Of Disclaimer
U.S. Government Required Disclaimer - Commodity Futures
Trading Commission. Futures and options trading have large potential rewards,
but also large potential risk. You must be aware of the risks and be willing to
accept them in order to invest in the futures and options markets. Don't trade
with money you can't afford to lose. This website is neither a solicitation nor
an offer to Buy/Sell futures or options. No representation is being made that
any account will or is likely to achieve profits or losses similar to those
discussed on this website. The past performance of any trading system or
methodology is not necessarily indicative of future results.
Stock Trading Information CFTC RULE 4.41 - HYPOTHETICAL
OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL
PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO,
SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER
COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF
LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT
THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS
BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES
SIMILAR TO THOSE SHOWN.