The Momentum Target System is extremely easy to follow.
I wanted to walk you through an example based on the trade Alert from today with some screenshots and play-by-play comments to give you a crystal clear picture of how the Alert Software and Momentum Target System System work and what to expect.
Naturally I chose a good day to do this post, but I was inspired by the the system performance on one of the first long-range days that we’ve seen in a while. Today is typical of how well the strategy works when the market has a trend day. Today was the perfect example of how everything plays out on a day when all 3 Targets get hit. This example will walk you through the Power Emini Momentum Target System alert from 1/24/2020. Just like today, the majority of days there will be 1 trade Alert and we “manage that trade” as shown below.
To start off, every trading day the system “comes online” 5-minutes after they ring the opening bell on Wall Street (the cash open) and displays the Dynamic Trigger Range. Notice on the screenshot below the Range High is 3332.50 and the Range Low is 3327.25.
The system waits for a “range breakout” to start looking for an optimal entry level, then displays the “Alert” which in this case you see is the SHORT – TRADE PRICE BARRIER 3326.75
As you see by the “time stamp” above the alert, the Alert was issued at 9:38 am Eastern Time. (The time stamp will display using your time zone). The System Notes are Eastern Time.
Be sure to follow the “System Notes” at the bottom of the screen each day- they are automatically generated and written out in real-time by the algo – and provide a play-by-play of the action.
When this trade got “filled” at 9:48 the system generated and posted the line “1-minute close past 3326.75 – 1st Target 3323.25”. The system uses a 1-minute close past the Alert Price / Trade Barrier as confirmation that the range breakout is getting traction. In other words, it keeps us from getting faked-out on a split-second blip over the Alert price or in this case when the price was waffling around the breakout level for a period of time.
As soon as the trade “triggers” the system instantly displays the Trailing Stop and the first Target. Notice that the “initial” Trailing Stop is generally a tick or two on the other side of the Dynamic Trigger Range, in this case we were short and the initial stop was 3332.75 just 1-tick over the Range High. The Trailing Stop is designed to keep us in the trade for significant moves without getting knocked-out on normal price fluctuation. It can start off fairly wide, but tightens up as the price moves as you will see below.
This next screenshot of the Alert Software shows the moment right after Target 1 got hit – and you see that Target 2 now displays in the Dynamic Target field. The system generated a new line in the System Notes at 10:18 – New Target at 3318.75. That is Target 2.
At this point the Trailing Stop hasn’t moved – yet – but every session is different and the price is moving in our favor. The idea is that say a 3-contract trader (shooting for all 3 targets) sold and locked-in a +3.50 point profit at Target 1 and is holding for the next target – and getting ready to trail the stop on the remaining contracts.
Here’s a look at the Alert Software when Target 2 got hit. Notice the “traction meter” to the right of the Time Stamp. It is showing +9.25 points of “traction” past the Alert Price at this juncture. You also see that the software has generated the 3rd Target at 3314.75 and moments later the Trailing Stop kicked in. In our Documentation we recommend moving your stop to breakeven once Target 2 gets hit – regardless of what the trailing stop shows.
At this point we have locked-in a +3.5 point gain at Target 1 and an +8.00 point gain at Target 2 for a total of +11.5 total points (less commissions). Now we are shooting for Target 3 at 3314.75 and protecting our profits by getting the stop to breakeven.
Below you see the screenshot right after the price made it all the way to Target 3 at 3314.75. Notice that the field where the Dynamic Target was displaying is now blank. That’s because the software is programmed to issue up to 3 targets and when all 3 get hit simply follow the trailing stop on any remaining contracts.
The system now has a +3.5 point gain at Target 1, an 8.00 point gain at target 2 and a +12.00 point gain at Target 3 for a Total point Gain of +23.50 points for the day. At this point a 3-contract trader is done for the day and can go off to do other things. Some traders – especially those trading the MES Micro Contract might still have some contracts on for “runners”. In that case you simply hold on and follow the system trailing stop – and when a big “trend day” develops you ride it as long as possible.
These following screenshots just show how the Trailing Stop evolved and ratcheted / tightened up as price moved. Remember the system is designed to stay in the major trend of the day as long as it persists and once all 3 Targets get hit, the system just continues to trail the stop until it gets tagged. Occasionally the trailing stop won’t get hit the entire session and you can just sell any remaining contracts at the close.
Having hit all 3 Targets, the Trailing Stop has tightened up and is now at 3325.00, which is actually 1.75 points below the Alert Price – well past break-even – so there’s a guaranteed profit on any remaining contracts. Notice the “trade traction” shows we took -3.00 points of heat, but so far the price has managed to move +16.50 points in our favor.
The Trailing Stop move ratchets down again to 3317.00. The software gives an “audio alert” every time the trailing stop moves.
The trend is continuing down and the Trailing Stop continues to tighten up. You see it’s down to 3309.25 on the screenshot below.
At this juncture the system just continues to “trail the stop” and there’s no reason to post every image for when it moved. So below we see the final Trailing Stop level at 3295.25 which is +31.50 points below the Short Alert this morning at 3326.75. That’s what we call a “runner”.
At 3:03 Eastern Time the price tagged the Trailing Stop – which triggers a “System Reset”. Here’s how the screen looks when that occurs.
So today basically demonstrates how the system can perform when the market has a good trending day.
Here’s a recap of the Point Moves from the Alert Price:
We don’t always get a 1% move in the ES, but when we do… The very nature of the “Momentum Breakout” Target System will capitalize on it. Even better, it’s a 100% fully-automated algo that drives the Alert Software so you aren’t relying on judgement or trade calls from some guy running a trading room. You’ll have a system and a strategy that quants out over time.
Today was a great example of what the system can do with a relatively long-range day and a good directional trend. It’s hard to generalize about what a typical day might bring because market behavior and price action varies from day to day, but what we would normally consider an average good day would be when the price hits both Target 1 and Target 2 and then then perhaps tags the trailing stop somewhere around or a little past breakeven.
Be sure to watch the video on the Momentum Target System page for a detailed walk-through of the system.
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