justatrader

Trend Following System - A long term trading method

FX:SPX500   S&P 500 index of US listed shares
1410 3 5
I'm publishing this trading strategy (which is not a secret, considering that I draw my inspiration from this method which was originally presented on stockcharts.com). While this method is almost mechanical, applying a bit of common sense makes this method very interesting to at the very least explore.

The above example is of the SPX             with examples given on the chart.

Trading Rules:

Long when

1) price is above or revisits SMA 150 (revisits/retraces from above)
2) Stochs move above 20
3) MACD Histogram crosses above 0-line

Buy at the high of the candle when both Stochs & MACD are above 20 and 0-line
Stops at recent swing low
Target is kept open as we trail the stops

Be alert when stochs drop below 80 and macd crosses below 0-line. Either price is making a correction or a change is underway.

Works best on:
Strongly trending markets
Reverse rules for short positions
Be extra cautious when SMA is flat or when you notice choppy price action
Do pay attention to fundamentals
Professional market analyst with a keen interest on futures. Love keeping an eye on the markets. Currencies, bonds, commodities. Combining technical analysis and the fundamentals. Contact me for more details.
So what does this system tell us?

Entry #4 is not pointed out but can be seen by the Blue/Red/Dashed lines on the chart. Notice how entry is a bit too close to the swing high? That should be an alert that the RR for a new entry is not good enough. Also notice price revisiting entry #3 almost. At the moment, long position stop loss would be moved to 1760 or 1734 (entry #3). A break above 1851.4 will confirm that the trend will continue to make new highs. Close below 1760 (the final stops as of now) indicates a discrepancy to the system and as such start watching for possible bearish moves. Keep an eye on stochs/MACD to determine if its just a bigger correction or indeed a change of trend.
Reply
profitmaker999
2 years ago
Many thanks. I appreciate that you tell us your trading method.
Reply
kidsadvcate
2 years ago
Nice work indeed :)
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out