MARKET REACTIVITY SYSTEM 2.1
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The Market Reactivity System is a powerful tool for trading commodity futures and stocks. It goes beyond the typical use of price behavior alone. Market Reactivity incorporates changes in trading volume and volatility to give a more complete indication of market behavior in the short term; and it is used in conjunction with the underlying intermediate and longer-term trends of the price. The system has been proven over many years of experience; and has proven to be robust and adaptable to changing market conditions. The system has been taken to a new level in recent years as the programming was developed for computer generated trade signals which has allowed automated optimization of key empirical factors; and extensive back-testing. The trading results are truly impressive.
A significant improvement to the methodology was made in 2009 which allowed accommodation of less regularity in the underlying cycles and greater market volatility. The insights incorporated not only improved performance, but also provided the basis for automating the trade signals. Initial back-testing at that time looked at 10 commodities using data beginning in 2007; resulting is what can only be called phenomenal profits. It was recognized that 2007 an 2008 included atypically large trends, so although not representative of more typical market conditions; it certainly demonstrated the ability of the automatic trading system to successfully handle those conditions. And those strong trends do occasionally occur.
A more detailed discussion of the methodology was presented in an article titled "Market Reactivity" published in STOCKS AND COMMODITIES magazine; August, 2010. Key features of the system allow it to pick intermediate tops and bottoms; but also to recognize trends - and, to anticipate changes to the trends.
Real-time experience has accumulated over the past few years; along with optimizations and back-testing studies. Trade results have been quite remarkable.
What is shown above are profits from trading 12 different commodities for the 12-month period ending December 30, 2011. This period includes both very choppy and sideways markets, as well as a few strong trends. Check out the details of the trades for each the individual commodities. Extensive back testing, as well as actual trading for the past few years, has shown that the computer generated trades, coupled with the systems unique risk protection, can provide outstanding trading profits.*
The legacy version of the Market Reactivity System proved to be very robust and worked well for years. However; with much of the trading shifting to the electronic sessions, around-the-clock trading, and greater participation by the large funds; the market character has changed. That change has indicated the need for a shift in the analysis to have less dependence on the regularity of cycles, and more dependence on the underlying trends. Version 2.0 grows from the same roots, but achieves those goals. And, perhaps more importantly for most traders, incorporates the logic to compute specific trade points. Utilizing a short cycle trigger, it uses a unique method of determining intermediate and longer term trends to filter trades to points of least risk and highest probability of success.
Version 2.1 incorporates updates making it easier to use and more universally applicable.
To learn more, explore the links on the left. An excellent way to get a first-hand look at actual (EOD) trades generated; as well as the info needed to make the trades, is to sign up for a trial subscription the E-Alert trade alert service. Get two months for the price of one - chances are you'll want to continue.
*This data results from applying the trade system to actual data in real time, and trading each trade signal for each commodity at the midpoint price on the days indicated by the software. It assumes 1 contract per trade for all commodities; except ED are traded in blocks of 20, and ES, LH, BO and W_ are traded 2 contracts each. Stop-loss trades were applied as in actual trading where indicated.
