Spock Trading System – Description from the creator …Spock
The Spock Trading System was developed over a period of 6 months starting in early 2015. It was developed to simplify trading decisions by providing long, short or flat trading signals, prior to the market open each day.
Most day traders eventually lose all their trading capital. So the Spock Trading System focusses on extra-day trading signals. Intra-day trading is for the professionals only, as the markets are now driven by high frequency trading machines, using algorithms. The average trader does not stand a chance against these machines on an intra-day basis. The Spock Trading System has proven over the last 6 months, that it consistently outperforms the market, and without any stress by having to watch the markets by being glued to a screen all day.
The trading signals are generated from a proprietary matrix of indicators over many timeframes that have been extensively backtested and are calculated after the close each day .
The basic tenant of the Spock Trading System is that it is unemotional, logical trading. No opinion or thought is required to enter or exit a trade. The signals are generated AFTER the market close and the trades are entered the next day, during the trading session. No trades are placed in the first 30 minutes of market open, as this is amateur hour. Primarily only the major ETFs are used for trading, as there is good liquidity and market depth in these securities. Also, individual company specific factors, such as a bad earnings report, will not have a significant effect on and ETF, as ETFs include hundreds of companies. Some stocks are included however , proxies for specific mining sectors .
Although the system generates numerous signals daily, not all trades are taken. The reason is that some discretion is used to determine which trades have a higher probability of a better return. This decision is based on the Chartology aspects of the ETF. For example, if the ETF is close to a major resistance line, and a long signal is generated, it is unlikely the trade is entered. However, if the ETF is just above a major support line, then the long trade would be entered.
Prior to market open, a matrix is published which gives a macro picture of global markets, and the trade bias, which can be either short, long or flat. A decision is then made, based on the Chartology factors, as in the example above, of which trades to take and which trades to pass. Similarly, for the exit decision, sometimes the Chartology factors will determine an exit decision, rather than the trade signals. This is where Chartology discretion becomes a factor, even when the signals say to stay in the trade.
The return over the first 6 months trial was about 27% on the original capital. This is with no individual trade being more than 5% to 10% of trading capital and avoiding excessive leverage. Generally 1X or 2X leverage is ever used. However, in higher probability trades, X3 leverage may be used. Therefore, the risks are minimized, so that trading capital is protected, as if one 5% trade does blow up prior to an exit, a maximum loss to total trading capital is never more than 1% to 2%. Also, stops are not used, as stop hunting by HFT algorithms is now common practice in the markets. They will find your stop and take you out, just before the real move begins. Spock knows the games they play!
The bottom line is that the Spock Trading System generates consistent profits, with minimum risks, no intra-day trading stress and therefore no emotional input to trading decisions. The trader can place the orders, then go and play golf, and stay generally detached from the markets, whilst generating significant returns on trading capital.
Trade well and prosper