Exits

Okay, now that you’ve got today’s theme song running let me share something very exciting with you. Yes – on TOP of the Zero-RL I put up today. I think I have discovered something that has been staring me in the face for a while now and after I added the little yellow ‘indecision’ lines it all came together for me. Let me show you:

First some historical data – the blue market part is on the next chart, which is current.

I think this tells the story without me having to explain it. What brought this on Thursday was that I watched the tape and there wasn’t a short VTA until the end of the day. Now, we kept adding long positions until Wednesday, after which the trend started going sideways and then dropped off the plate. Now, had we taken an exit at one of the two available indecision lines we basically would have picked the top.

Nice!

So, I went backwards and this is what I got so far. In almost all cases the indecision marks would give us good exits before a trend change. One could even consider the indecision marks early warning indicators that something is going to give.

Now, what else do you need?

• We know when a trend starts.
• We know when a trend ends.
• We know when to stay in a trade so to not cut too prematurely.
• We know what the probabilities are inside trends and how to interact with retracement levels.

Seriously – what else do we need? This is getting dang exciting…. Of course, this is a small sample, so I am looking forward to building on the existing work and fine tuning the Zero-RL. I actually had a chat with 2sweeties about the new version and he gave me some great input that might make this thing even better.

As I said – 2009 is going to be kick-ass! Right now my focus is on perfecting this thing. Then I’ll stop bugging you guys about it and just keep it running. If you can’t make money following this indicator then you better start looking for a day job.

But wait – there is more!

Let’s forget about the damn Zero for a second – there are so many excellent TA patterns out there, I just had to share them with my leeches:

Anyway, most of those are short strategies – I just can’t help myself. I want to see some input here, leeches – get to work!

UPDATE 1:00pm EST: Frankly, I bent the rules today by closing out my futures contract early (with a nice profit), suspecting monkey business. Usually I would not do that and stick with the ZST as it is now, but I also know what the MMs are up to and smelled a major rat when we first rallied on a 2+ signal which turned negative in a matter of 15 minutes:

I mean, that’s some rough tape! How do you counteract that? The only thing I can think of would be to check for signal dissonance – meaning a very positive signal followed by a pretty negative one in a short amount of time. However, I’m not ready to add this yet – you never want to optimize an indicator for whipsaw expiration week markets. So, I’m going to keep watching this for a few more weeks and then decide if it’s worthwhile adding. Sometimes you might find yourself in a nice trend and a buyer or seller shows up but fails fairly quickly. You don’t want to get kicked out too soon – that’s always the danger of adding too many exit signals. I was watching the indecision marks for a while before I finally added that new rule yesterday night and I think it’s a good decision.

Anyway, I’m not trading anything for the remainder of the day as I’m not the gambling type. That doesn’t mean I’m not working – there are plenty of good setups out there and I want you leeches to go and find me some winners! Come on!!! This is war! Lets be prepared at all times.

Cheers!

UPDATE 1:10pm EST: You leeches are useless – here’s another one:

Am I the only one working around here?