Trading with Trend and Momentum

When I started trading back in the late 1980s, the idea of making investing decisions solely on technical analysis was not as popular as it is today. I remember the excitement that I felt when I was back-testing and forward-testing systems as I was developing them. I was making money and having a good time. And then something happened. I started adding indicator after indicator to my charts until I could barely see the movement of the actual stock. This made my selections very precise but, because I now had to consider so many indicators, I was getting only 2-3 trade signals a month instead of the 50 – 100 that I used to get.

I had to come up with ways to reduce the number of indicators on my charts while still keeping my accuracy level high. In the early 2000s, I developed a system that required only three simple indicators that allowed me to find securities that were trending strongly with momentum on their side. Over the years, the system has been refined and now:

- Can be used with any charting platform

- Works on any market (Stock, Option, Futures, Forex) globally, on any time frame and any price level.

- Can be used by all traders/investors with all levels of experience. The beauty of this system is in its simplicity and its ability to keep you active in the markets

- Features setups that can be used with single option or advanced option strategies

- Be used as a stand-alone system or can be a great compliment to whatever trading system you are currently using.

So, how does the system work?  Here are the mechanics of it:

1. Use the RSI with a customized setting, along with two other simple indicators to identify strong entry points

2. Wait for a proven combination of the three indicators to develop

3. Follow a clear set of rules to exit the trade properly

Here are some examples:

In the example above, note that the system identified a long trade. You could have also considered a call option or a put credit spread to open this trade.

Here is another example:

In the example above, the system identified a short trade. You could have also considered a put option to open this trade.


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Vince Vora

Author: Vince Vora, Senior Trader
Company: Trading Wins
Services Offered: Trade Alerts, Daily Market Commentary, Nightly Videos
Markets Covered: Stocks, options, Forex, Futures

Over the last three decades, Vince has been trading and refining his trading systems that are based on technical analysis and price action. Over the last few years, his focus has been on teaching people how to become better traders.