Trend Following System - A long term trading method

FX:SPX500   S&P 500 index of US listed shares
1500 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
Nice work indeed :)
Many thanks. I appreciate that you tell us your trading method.
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.
United States
United Kingdom
Việt Nam
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing Priority Support Ideas Published Followers Following Private Messages Chat Sign Out