FBD Strategy

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Based on a false downside breakout of price accompanied by a MACD-H divergence, this swing trading strategy can be applied to any instrument and any market. The strategy is most effective when trading liquid stocks, ETFs and futures on daily or intra-day charts.

Traders can manually scan a list of stocks for the necessary signals or use a screening tool on their preferred trading platform. A workspace for this strategy which includes a screening tool for TradeStation® RadarScreen® is offered in the Store.

Ideally all 10 signals should be present before a trade is taken but discretion can be used in this regard. The more signals are present the greater the probability of a high success rate with the strategy.

Videos which offer an introduction to the strategy and cover live trades between June and July 2021 are in the Online Trading Course.

Daily Help Strategy (US)

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This strategy was introduced in Way of the Trader and is designed to catch a market bounce and follow up trend based on stocks making New Highs and New Lows for the past month.

HELP stands for Highs Exceeding Lows Percent and this continues to be one of my most profitable strategies.

It can be applied to any large equity market using futures or highly liquid ETFs which track a market index. Best of all, there is no scanning for stocks with this one because we trade the same instrument repeatedly. In the US, we can trade Micro E-Mini futures of the S&P500, popular exchange traded funds such as SPY or a geared ETF such as SSO.

Videos covering live trades between August 2017 and January 2021 have been added to the Online Trading Course.

Diesel Strategy

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In a diesel engine the fuel is heated and injected into the combustion chamber where it is compressed by the rising piston. This causes the fuel to explode, and that’s also how the Diesel Strategy works.

Sometimes, the price of a stock runs up and pauses for a few days as it trends sideward. The price bars start to compress, and the stock begins to heat up. Eventually, the sell orders at the current price level are absorbed and trading volume declines. Finally, the price washes out the remaining sellers, reverses like a rising piston and explodes upwards.

This is a daily swing trade strategy which can be applied to any stock market and traded on any platform where a Bollinger Band compression can be identified. A ‘Diesel Strategy Toolbox for TradeStation’ which includes indicators for charts and RadarScreen is available in the Store.

Wilde Strategy

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One of my favorite strategies was inspired by a line from Oscar Wilde, ‘We are all in the gutter but some of us are looking at the stars’. It's a weekly trend following strategy where we are looking for high flying stocks who have fallen out of favor and ended up in the gutter.

As the management (or what’s left of them) go about the job of restructuring, the share price finds a bottom and begins to form a base. Over time, resistance and support levels define the width of the gutter. If the firm can be restructured, eventually the stock will burst out of the gutter and reach for the stars. That's when the Wilde Strategy kicks in.

Once we are in a position, we stay with it until the newly formed trend comes to an end. We can use an ATR based trailing stop to manage our risk and get us out when the time is right, with our profits intact.

Weekly Trend Following Strategy

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Weekly Trend Following is widely considered to be the most profitable style of trading. Technically it's an easy style to learn, but it can be the most challenging because traders lack the necessary patience.

Trend Following is particularly suited to beginners, as there is enough action to make things interesting and open orders need only be adjusted on the weekends. This allows us to get away from the screen and concentrate on our day job. To trade this style, we need to understand the basic rules of trend structure and patiently wait for each weekly bar (or candle) to form without jumping in or anticipating where it might go.

Tidal Strategy

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This is a 'semi-passive' strategy, where the trick is to be passive when the market is trending and active when it’s turning. We must be able to sit tight in our chosen ETF for years and not be spooked by every bit of negative news. On the other hand, we have to be prepared to close a position we've held for ages without getting too attached to it.

The Tidal Strategy is traded with a monthly chart, so it's really a form of 'technical investing'. Our entry and exit decisions are based on clearly defined signals, rather than company financials or macro-economics. Institutions and large money managers tend to use strategies like this.

Gutter Strategy

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While waiting for a Wilde trade to set up, the gutter provides many profitable trading opportunities. As the price rattles back and forth, the Gutter Strategy seeks to grab a few bucks using a daily swing trade.

A washout of the upper and lower zones of the gutter are the best places to catch these trades, but internal support/resistance levels are also good. The beauty of the gutter is to be found in the clearly defined levels which need to be washed out for a set-up to be valid - our stops and targets are obvious. The longer the gutter persists, the more pronounced the levels become and the greater the opportunity to profit from them.

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DISCLAIMER
Content is provided for information and education only and is not a recommendation to trade. Trading is not suitable for everyone and involves the risk of losing money. Past performance is not a reliable guide to future returns.

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