For the last few months Nat has been experiments with a new method of calculating “inflection points” — places where shen thinks the price action will demonstrate some kind of significant behavior.
During the first two weeks of 2016 we’ve been applying these “inflection points” to a new kind of “system trading” with phenomenal result — almost literally too good to be true.
Things that are too good to be true usually aren’t, and we’re being very cautious about this. But the initial results are much more than promising. This looks like it could b developed into a simple trading system with remarkable profits.
These are essentially swing trades. Each morning, around 8:00 a.m. Nat posts three re-calculations of her buy and sell numbers.(She actually posts new numbers for both the S&P500 mini-futures (ES) and the oil futures, but we’ll concentrate on the ES for the moment).
The numbers are a Buy entry level, a Sell entry level and a Control line. Here’s a snapshot of her chart for Jan.15, 2016, showing how they appear to members first thing in the morning.
(Note that the time stamp on the bottom of the chart is Chicago time, Central Standard. 8:00 on the timeline is 9:00 New York time).
The trading strategy is simple. When the price moves to the Buy level, open a long position and hold it until the price moves to the Control line. When the price hits the Sell level, enter short and hold until the price reach the Control line from above.
When the price is at the Control line, make a determination about which direction it will take (see below for the details about how to do that) and hold the position until is reaches either the buy or sell level.
There are some refinements in terms of triggers and exit strategies that can vary a bit, but that’s the fundamental trading method, and it could not be much simpler.
But in the first two weeks of the year that strategy has produced potential profits that are staggering. Here’s a summary of some of the best days of 2016 so far:
|Friday Jan. 8:||Short entry at 1962, reaches buy level 1926, retraces to control line 1940, retraces back to buy level (and beyond) for the close. Profit potential from the three trades: 62 points.|
|Monday Jan. 11||Short entry at control line, continues to buy level at 1895. Profit potential: 33 points|
|Thursday Jan. 14||Long entry at Control line 1878, continues to Sell level 1926. Profit potential: 48 points.|
|Friday Jan. 15||Enter long at buy level 1855, exit at 4 pm 1875. Profit potential: 20 points|