What we are trying to acheive

This system is designed to pick out just 1 or 2 high probabilty trades a day.

This is done in a very unique way with a high success rate.

• It is ideal for traders who wish to trade only once or twice a day.
• The risk return is set to 2:1 giving our account a greater chance to build
• The system uses the Russell 2000 the same as my day trading system

The aim of this system is to pin point one two high probabilty trades and get your account to the point where you are trading multiple contracts safely with the least risk as possible.

The system target for the day is $300 or 3 points.

Trading with just a single contract once acheived you will shut down your account and cease trading for the day.This will give us a very good hourly return for time invested.

Example of Pattern stop

This is an example of the ' Pattern stop ' - this is the stop we move when our long could well form a double top or when our short could well form a double bottom.

the stock is Coca -Cola

We have a nice long term trigger on the long term ( left chart) and a very good entry on the short term ( right chart) .This looks like a perfect set up.

With out the ' Pattern stop' being implemented we could of lost on this signal.

End of day trigger on BA

The trigger was given on end of day data the entry was on the 1hour chart triggering at 4.30pm that day.

The safety is in the stop

We are at our greatest risk when we 1st initiate a trade.If possible we need to reduce our exposure or reduce our exposure when the trade has either moved in our favour or the chart tells us to do so from a technical point of view.

The stop i initiate on this system is carried out when a technical situation occurs.this happens BEFORE the 1st target is hit.

Signal

We go short 2 contracts and set our stop to 1 or 1.5 points,our long term chart will have already given us our trigger and will look some thing like this






We now have our trigger, look at this classic chart pattern because this is what will be used to reduce our stop on our live contracts,(I do not bring my stop to break even untill the 1st contract has hit its target) ...its this risk period before our target is hit that i am trying to reduce.



Compare this to the real chart you can see how the pattern is the same,luckily for us we had a good outcome but in case we didnt our loses would of been 50% of our initial stop

Risk Return

On this system I use a 2:1 risk return this means if our target is 3points our stop will be 1.5 points.

We can therefore have 2 losing trades requiring just 1 winner to bring our account back to break even

When the account has grown to a specific size a second contract will be added.

When using the system with 2 contracts 1 contract will be closed at 3points which acheives our goal for the day ( The account builder)

The 2nd will be our ' bonus runner' and can esily run to several more points, if the 2nd contract realises a 4.5 point profit the risk return on this 'bonus runner' trade has increased to 3:1

US Stocks

Here is 1 example of a signal on US stocks.


The stocks is NVLS and is very volatile

5th Oct 2007- Russell 2000 (ER2)

Here are all 3 signals -

The 1st chart will show all 3 signals on the long term chart.In practise as soon as you geta long term trigger you move to the short term chart for confirmation and entry.







The following 3 charts show exact entry

Results for the 2 triggered signals are as follows

Account builder on signal 1 and 2 = + $600

Trend runner on signal 1 and 2 = + $1,220

Over profit out of both signals = + $1,820

Results for Ftse 23rd -27th July

All the results published on this blog are gained by trading 2 contracts.

1st contract is the 'account builder' and is capped to £150 (15 points on the Ftse)

Once hit the stop of the 2nd contract is moved to break even. ( our entry fill price)

2nd contract is the 'bonus runner' and is designed to try and capture larger moves.

Number of signals for the week was 40

Ftse Future 24th July

Results

Number of signal = 6

Winners = 3
losers = 3

1st contract account builder as follows
-20-10+150+150+150-50 = +£370

2nd contract bonus runner as follows
-20-10 +370+450+100-50 = +£840

Total for the day = £1,210