Rule based system...
Think about what you would add to improve the system...there's a few that come to mind immediately...
Thomas H. Kee Jr. is the president and CEO of Stock Traders Daily , where he offers strategies and newsletters to both institutional and individual investors, and he manages money privately for both institutional and individual investors through Equity Logic LLC.
All I want you to do is something that I do all the time, which is read the market. Stop listening to news, forget about politics, and just watch the trend. You can use automated tools if you want to, but the objective is to be unbiased and without expectation. If you can do this, June can be a fabulous month.
This is all you need to do:
•Open a chart(s) for the Nasdaq
•Define two support and two resistance levels
•Create an array: S1, S2, R1, R2
•Insert the Market Price (MP) = S1, S2, MP, R1, R2
•Follow the rules below.
Rules:
1. Begin trading five minutes after the open
2. Trade ProShares UltraShort QQQ QID +5.28% and ProShares Ultra QQQ QLD -5.37% exclusively
3. Use the same dollar amount for every trade, i.e., $50K per trade
4. Buy either when support is tested or when resistance breaks higher
5. Short either when resistance is tested or when support breaks lower
6. Buy signals tell us to buy QLD and to target the next level of resistance
7. Short signals tell us to buy QID and to target the next level of support
8. If support breaks after being tested, sell QLD immediately
9. If resistance breaks after being tested sell QID immediately
10. Tests are official when the Nasdaq comes within 3 points of support or resistance
11. If support or resistance levels break slightly sell immediately
12. If the market moves 5 points above or below a parameter after a stop initiate a second trade in the direction of that break. If the direction is up, a long position is implemented (QLD). If the direction is down a short position is implemented (QID).
13. If the market reverses direction after establishing a second long or short, and the reversal causes the market to break that respective parameter again, too, close that position and revert to cash if the break is equal to or greater than 1 point.
14. Limit stops to two stops per parameter.
15. Target 2% profit for every trade – secure 2% when you have the opportunity.
Last year these simple rules returned 21% for our swing-trading strategy, but anyone can do this if they remove expectations, stop listening to noise, and empower themselves to make money in any direction.
