Day Breaker system

Posted by on Nov 25, 2011 in Algorithmic Strategies | 0 comments

“Day Breaker’s goal is to cap­i­tal­ize on the market’s suc­cess or fail­ure mov­ing out­side the zone” Future’s Truth Mag­a­zine has our Day Breaker strat­egy up 65% in the last 12 months!

One of the most basic and pri­mary rules of Tech­ni­cal Analy­sis is the rule of sup­port and resis­tance. This rule is grounded in the psy­chol­ogy of the markets.

Here is the basic rational:

If the mar­ket ral­lies from a low of 200 up to 220 and then trades back to 200, traders who missed buy­ing at 200 and the sub­se­quent 10% move will buy at that price since they regret miss­ing the first low at 200. If the mar­ket ral­lies again to 220 fol­lowed by a decline back to 200, traders who missed the last two lows will pro­vide buy­ing sup­port at 200 for a run back to 220. If the mar­ket ral­lies again to 220 and then falls to 200, there will be a “crowd” of traders buy­ing again at 200. Hence you have wit­nessed one way that sup­port is developed.

But what if on the test, the pull back, to 200 do not finds enough sup­port, prices con­tinue to decline below 200 to 190, now the “crowd” of traders who bought at 200 will regret it and would be happy if they could “just break even” back at 200. Hence, the sup­port zone of 200 has now become resis­tance, as these traders will be sell­ers to break even.

This is one of the First and Most Pri­mary Rules of Trad­ing! Once Sup­port is Bro­ken, it becomes Resis­tance and once Resis­tance is Bro­ken, it becomes Support

In this sim­ple exam­ple, we have a crowd of traders that will be sell­ing just to get out at breakeven, if the mar­ket gets

back to 200. The same holds true for chart pat­terns like dou­ble or triple tops. Once resis­tance at these highs is bro­ken it becomes your new sup­port level. So while the major­ity only looks at the chart triple tops as resis­tance or head and shoul­ders’ bot­tom as sup­port, the learned trader looks at these tops and bot­toms as a zone or area and that when they are bro­ken through they will pro­vide oppo­si­tion to a fees price move through that price area as the rule states.

%C-Day Breaker has the abil­ity to project daily where the intra­day sup­port and resis­tance lev­els should nat­u­rally occur for a day trader. It uses the pre­vi­ous day’s range to makes pro­jec­tions based on the Fibonacci sequence of num­bers. The strat­egy uses these daily sup­port and resis­tance zones as set before entry. The notion of suc­cess or fail­ure then come into play with the place­ment of entry buys and sells stops.

So you are clear here sup­port and resis­tance is not a sin­gle price level it is a zone or an area. That makes the DayBreaker’s approach plus its use of the con­cept of suc­cess or fail­ure to move out of the zone. Day Breaker’s goal is to cap­i­tal­ize on the market’s suc­cess or fail­ure at mov­ing out­side the zone. Once price is in the day trader’s zone, two orders are caused one long stop and one short stop.

Based on a few sim­ple rules around sup­port and resis­tance, %C Day Breaker is ranked #7 all time S&P day traders since 2004 via Futures Truth

TMT More Info

Devel­op­ers and traders be aware that from a basic sys­tem like Day Breaker the appli­ca­tion of mod­ern day fil­ters (con­ve­niences) and mod­u­lar know how, will push Day Breaker back into the top ten when com­pared to all the strate­gies fol­lowed by FT and in the most recent 12 month annu­al­ized returns.

Priced at $4,995.00; with your TMT mem­ber­ship 50% dis­count at $2,495.00.  Ask about port­fo­lio discounts.

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