TrendCatch DayTrade  SP500 Futures or Forex Spot Market Anywhere in 8/28/2008 3:20:49 AM the  World  

 




SP 500 Trading Method Examples

To get a better understanding of the potential and how to use TrendCatch SP we show a part of an actual trading day, December 19th. 2007, using the trading based upon the Default Strategy and Less Volatile Strategy. The Profit is without deduction of Trading fee. The shown trading Methods are only meant as examples, and can be used on all Trading Strategies.

After that we furthermore demonstrate the Combination possibilities when using two or more strategies at the same time.

These examples illustrates that everything is not lost even if you get caught in a position and start loosing money. Just follow the signal and change position with it, and you will find that almost all the time you will return into a positive trading profit.

By following the Trend Signal closely a very experienced trader should be able to execute the optimal exit trade almost every time. As the examples shows, TrendCatch has Tremendous Upside Potential with a Limited Downside.

 DEFAULT STRATEGY using Fixed Stops:
1. Method:
 Each New Position start with 1.00 point Stop Loss. 
Stop Profit >= 1.00 point. - Result: >= + 2 Points.

2. Method:
 New Position start with 2.75 point Stop Loss.
Stop Profit >= 2 points. - Result >= 8.50 Points.

LESS VOLATILE STRATEGY using Fixed Stops

1. Method:
Each New Position start with 2.00 point Stop Loss. 
Stop Profit >= 3.00 point - Result: >= + 5 Points.

2. Method:
 New Position start with 3 point Stop Loss.
Stop Profit >= 4 points. - Result >= +7 Points.

Using Trailing Stops instead of using fixed profit goals and thereby taking advantage of the long Trends would make the profit rate much higher depending on the individual use of stops. How you will use Trailing stops depend of your Risk Aversion, the number of contracts you want to trade and so on.

A more advanced use of TrendCatch is to Combine two or more strategies during the trading in combination with trailing Stops. 
The idea is to use one strategy as the 'Main' strategy (here Default) and the other as a kind of 'Safety net' if the market goes against the original position.

In the example below we use the two above Strategies, but the concept can be used by using any of the strategies, the choice has to be determined by your risk aversion and your ability to trade several contracts at the same time.

There are a few very simple RULES based upon experience to follow. They are not a must but they show you what to look out for:

1. Normally NO Stop Loss is used with this trading method as the changing in Trend using the 'Safety Net' strategy works as a natural stop.
2. If there is more than about 30 minutes between the change in Trend from the 'Securuty Net' to the Main Strategys Trend - do not enter the trade, wait for a new trend where the two strategies are closer in time.
3. Only combine trading strategies that are different in volatility.
4. Use trailing Stops for profit with active stops as there very often is a good possibility to re-enter a Trend.

Default Short 3:03:04 @ 1465.25 Profit can and should be taken until 6:23:50.
If profit is taken during this time new SHORT positions can be opened up at 4:53:47 and at 5:12:37		 Max Profit 8.75 points
$ 437.50 per contract
Default Long 4:42:26, 5:04:17, 5:35:16 Skipped as the Less Volatile still is SHORT -----
Less Volatile Long 6:23:50 Not Confirmed the Default LONG 5:35:16
More than 30 minutes since Default Signal!		 -----
Less Volatile Short7:08:37 @ 1458.50 Confirm the Default Short 7:03:15 Max Profit 1.25 points
$ 62.50 per contract
Less Volatile Long 7:37:33 @ 1460.75 Confirm the Default Long 7:37:13.
Profit can and should be taken until 11:14:30.
If profit is taken during this time new LONG positions can be opened at 8:02:45, 9:44:21, 10:06:01 and 10:33:12		 Max Profit 14.50 points
$ 725.00 per contract
Less Volatile Short 11:14:30 @ 1469.50 Confirm the Default Short 10:54:38.
Profit can and should be taken until 12:11:26.
If profit is taken during this time new SHORT positions can be opened up at 11:51:38 		Max Profit 11.75 points
$ 587.50 per contract

The trend has to be confirmed, and that is why TrendCatch can end up with a loss if you stay in the original position until it changes. It is not a fault by TrendCatch if the price development by the end of a position is going against the original position. Contrary, it is in the nature of the way the TrendCatch algorithm is developed, to find an entry point that is trustworthy.

These examples are just meant as a very brief illustration of the endless possibilities TrendCatch offer the active Day Trader.

Almost every time TrendCatch computes a shift of the TREND there is a huge possibility for a profit, because TrendCatch finds a profitable entry point into the market, either long or short.

A very experienced trader will be able to mix the different trading strategies and Trading Methods. It is however not advisable to try that unless the Trader has used TrendCatch for some time.