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The World's Simplest Trading System

THE BUY SIGNAL

#1 - The 40 day simple moving average must be in an uptrend
#2 - Take all Parabolic buy signals
#3 - The stop if wrong is the last price low just made
#4 - Use the parabolic as a trailing stop to lock in profits

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THE SELL SIGNAL

#1 - The 40 day moving average must be in a downtrend
#2 - Take all parabolic sell signals
#3 - The stop if wrong is the last price high just made
#4 - Use the parabolic as a trailing stop to lock in profits

WHAT THIS SYSTEM WILL DO FOR YOU

#1 - Give you a clear trading plan
A big reason traders fail is becuase they don't have a plan

#2 - Makes it mentally easier to trade
If you have a system you feel confident in
When it comes time to make the trade it will be easier to pull the trigger

#3 - Time
You can spend endless hours on research in trying to make a trade
This system will take only a few minutes of your time each day

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Q. - Why use the 40 day simple moving average
A. - It's the one that I like to use to define the longer term trend

Q. - Why use the parabolic as the buy signal
A. - It is 100% mechanial and it is a magical trading indicator

Q. - Why use the last price low or high as the stop if wrong
A. - Because sometimes the market will come back and test the last low or high
We want to stay in the trade until it is proven it isn't a good trade
That doesn't happen until the last price pivot point is taken out

Q. - How do I tell what the last pivot
It is the last clear price point made before the buy or sell signal
Also when the parabolic gives you an entry signal
The dot then moves to the last pivot point
So the parabolic indicator will also give you the number to use

Q. - When do I start using the parabolic to lock in profits
A. - When the market has clearly started to make a trend move
Use the last pivot point until the market take off
And then switch to the parabolic to lock in profits

Q. - What if I get in a trade and it moves sharply in my favor
A. - If the market moves so fast that the parabolic is lagging way behind
Then move the stop if wrong up to break even (plus commisions)

Q. - What if the market makes a move, comes back fast and I lose a big profit
A. - Thats the price we pay sometimes in waiting for the big moves
In the long run it will pay to hold for the big winners

Q. - What if a trade signal is too much risk for me
A. - Don't take that trade
When a market is just taking off from a base
The stop level may be too far away for you - don't take that trade

As the market starts a strong trend move
Sometimes the parabolic entry points will have closer stops
Only take the trades that you are comfortable with

Trade lower risk markets like Oats, Sugar, etc.
You can also use mini contracts
Most of these markets have mini contracts
Mini contracts are an excellent way to reduce risk

Also you could buy options to reduce risk and increase holding power
Again with the option find one that is the right risk level for you
Don't sepend $2000.00 on an option if your account is $3000.00

Good old common sence is the best way to figure out if the trade is for you
There are options out there that won't cost as much maybe
And you will have less money at risk - use those options

Thanks !

Jim

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Disclaimer - I am not a commodity trading advisor. The information on this site is for trading education only. There are no trading recommendations for any one individual made on this site and this information is paper trades for trading education. All trades are extemely risky and only risk capital should be used when trading.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.