This is the system which I currently use
in my trading. I have nicknamed this system
"2X" because the goal is to get 2 times the
daily range on ES or NQ. With proper
execution of all trades this is quite
doable, but that will mean a minimum of 15
and as many as 30 trades in a day. This is
too much for many people. Really all 2X is
doing is trying to get in and out at the
optimum point possible on trend reversals
and trend continuations after retracement.
It is nothing more than that, except for the
band trades during chop. Failure rate on
trades is very low.
- Bollinger Band - 8 simple, 1.8 std.
- MACD - 7,28,7 - both lines and
- Stochastic EXP- 7,3,3 (fast) and
21,10,4 (slow) superimposed over each
- EMA's - 34,50,100, ADX 14
- Trend is important and defined
chiefly in these ways --Higher highs &
lows, etc.- MACD - slow stochastic-
EMA's. Determination of trend is made on
the higher time frame and is not subject
to strict rules. I generally use slow
stochastic as my primary determinant.
EMA's will be slower to change direction
and are most useful to gauge strength of
longer trends. I find that reference to
a 550T chart is often helpful if in
- The common chart combination I use
is the 55T and 210T although other
combinations are sometimes used based on
volatility and range. Entries are
usually based on 210T using 55T to
finesse both entries and exits.
- Buy/Sell zones are below 30 or over
70 on fast stochastic
1. Enter in the direction of the trend
whenever fast stochastic is in buy or sell
zone. Entry may be made using 55 tic chart
to gain better entry point, but this is not
mandatory. Don't enter until evidence of
movement in the desired direction is seen.
This entry can also be taken when there is
no distinct trend, but almost never
countertrend (except for quick scalps).
Continuation reentries do not require
stochastics to be in buy/sell zone as long
as slow stochastic and MACD still in same
direction as the trade.
2. Enter on every slingshot (defined below)
3. To enter on apparent reversal of
significant trend requires stoch and/or MACD
divergence, or other evidence of reversal
such as lower high, higher low, etc. The
longer and stronger the trend, the more
clear and convincing the divergence must be.
Exit method: No set rule, but I use price
action combined with the indications from
the slow stochastic and macd on the 210 to
prevent early exit based on momentary
hesitations or small retracements. I will
also not attempt a reversal (countertrend)
trade when ADX is over 40 without first
seeing multiple divergences or lower high
(for a short). To a lesser degree I try to
consider support and resistance factors,
chart patterns (waves, etc.), time of day,
and particularly the price relationship to
BB on the 210Y chart whenever those bands
have no pronounced slope. I try never to
risk more than 2 points in a trade on ES or
5 on NQ.
For slow periods and chop: I sometimes
play the Bollinger Bands, buying at the
bottom of the band and selling the top. I
will do this only when the BB on 210 tick
are lateral (or nearly so) provided there is
at least 2 point spread between the bands.
Entries are usually at market or limit and
taken when the band is touched without
waiting for reversal to appear. Success
ratio is about 3/1 and expectation is to
make 1-2 points, while risking no more than
2. Exit would be when reaches about 2/3 of
the way to the opposite band. This kind of
trading is only for narrow range slow
periods and should not be done on lower time
frames such as 55 tic.
A slingshot is my name for a pattern that
is made by the 7,3,3 stoch combined with the
21,10,4. It is nothing more than a visual
that highlights a tradeable pullback within
a trend. For a long, the fast stoch will dip
while the slower one remains relatively
flat. Since I have them on top of each
other, this will look like a slingshot being
pulled back. The higher the time frame, the
more powerful the slingshot, but they appear
more often on the lower time frames.
Slingshot entries should be taken only with
trend or when there is no discernible trend,
but never counter-trend.
This is not a mechanical system, but
simply a trading method. Experience with the
indicators used and pattern recognition
skills are far more important than trying to
devise rules for every contingency. As with
any method, it takes time and serious
practice to be able to use it to it's full