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.
DISCLAIMERContent 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.