This is a checklist summary for the rules and important things you need to understand to trade our system
1) Getting to Delta Neutral (breakeven) as quickly as possible on EVERY SINGLE TRADE is Rule #1
This means when you enter a trade (using our standard configuration) you set a 2 point initial stop. When the price moves 1 point in your favor – you SELL 1/2 the position and move your stop 1 point – so the trade is then at breakeven.
Every Trade Alert that fills – that moves 1 point over the Entry – is a NO-LOSE trade – because you will be using the Delta Neutral Strategy.
2) The Trade Entry is after you see a 1-tick close over the Trade Price Barrier (Alert) on a 1-minute chart.
If the price pokes over the Trade Price Barrier several times but does not close over it on a 1-minute chart, the trade should not be taken. This is what we use for confirmation once an Alert Signal is received. See the Knowing When To Enter The Trade page for more details.
3) Every Trading Session is Different – Some days will be dull and choppy and other days the market will have good trending price action
It’s extremely important that you realize there are different Day Types in the Market and certain days will be much more conducive to scoring big points with our system.
Patience is the key here because there will be days with dull choppy price action and little or no follow-through. However there will be plenty of high-traction, strong accumulation (or distribution) trending days and these are the ones where our system shines.
If the market makes a significant trend move in one direction or the other – the system is guaranteed to catch it – due to the very nature of the Dynamic Trigger Range.
4) The Momentum Breakout System does not attempt to trade every wiggle on the chart – it is designed to capture significant 4-6-8-10 point ES moves
Behind the scenes the algorithm that drives the Alerts knows where the “price entanglements” are and which levels the price can break free and to go on to make a big move. The Macro Target will let you know what to expect on each move. Keep in mind the price can exceed the Macro Target so it should be used as a guide on what to expect from the current Alert.
The Trailing Stops are designed to keep you in a trade as long as possible – so we can catch the trend runners.
Yes, you can Scalp Trade with the Alerts – taking quick profits at say 1 point to build up some risk capital – but the thing to keep in mind here is that the big money is made on the Runners – and that’s exactly what the system is designed to capture. Get your trade to Delta Neutral as quickly as possible and let the other half ride for the larger moves.
5) The system provides a strong statistical edge – over time – over the series.
Keep in mind that market conditions vary. As mentioned above, each trading day is a different “day type”. There will be hot and cold streaks trading the alerts but it important that you don’t get frustrated on any given day – because over the course of a given month – using the Delta Neutral strategy – the Big Point “Runners” will make up for days where there is no strong trending action or follow-through on trades.
The system will get you in the big moves – when they happen – and they don’t happen every single day. To properly evaluate the system it is important that you track your trades and you will find that the system wins “over the series” – and a couple 8-10 point “Runners” clean up the breakeven stop-outs and commissions.
6) The Monthly Cost of our software is insignificant when you look at the bigger picture
The monthly fee for using our software is equivalent to an ES move of 1 point on 2 contracts. When you consider the fact you are receiving multiple alerts every trading day and somewhere in the neighborhood of 100 Alerts each month, if you are able to come out ahead even a few points, then it is well worth it to stick around and continue receiving alerts from the software. Now take a look at the ES System Stats and you’ll clearly see that using our Delta Neutral strategy – combined with the fact we use a 2-point Maximum Risk on every trade – over a series of trades you should do very well trading our system.
Sure there will be dull days, and a 2-point full stop out here and there (and plenty of breakeven trades), but as we’ve described here in the documentation, when you catch one of the 6-8-10 point runners it more than makes up for those – and takes care of all the commissions. If you stick with the system (even through dull periods or drawdowns) over the series you will do well.
As mentioned above, anytime the market makes a big move – the system will catch it, guaranteed – simply because it will have broken out of the Dynamic Trigger Range.