This is a totally mechanical trade, offering a high win-rate and a good profit factor. It requires virtually no analysis, and leaves nothing open to interpretation; when the trade sets up, you need only pull the trigger. Do this time and again (trading at a level appropriate to the size of your brokerage account balance) and you will come out on top. All that is required from you is self-discipline and complete emotional disengagement. Just ignore the draw-downs and keep taking the trades – all of them!
Parameters for buy and sell orders:
Parameters for buy and sell orders:
- Wait for a Friday when the S&P500 e-Mini futures (ES) closes down on the day. This is your signal for a buy if price meets certain conditions the following Monday.
- Now look at Treasury Bond futures (ZB) for confirmation. On this same Friday they must have closed higher than they did fifteen days previously in order to validate the signal.
- At Monday’s open, place a BUY order with your broker at a distance above the open equal to the difference between Friday’s OPEN and Friday’s HIGH.
- Place your STOP-LOSS at Monday’s OPEN minus the difference between Friday’s HIGH and Friday’s OPEN, or just below Friday’s LOW, whichever is the lesser amount.
- Exit the position at the next profitable OPEN.
- Take every trade meeting these conditions that the market presents. Do not be tempted to try and ‘cherry-pick’ winning trades.
- Note that this setup is applicable only to ‘buy’ trades – opposing signals are not valid for a sell – there is no ‘sell’ version of this trade.