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STS8 or Stocata Swing Trading Stocks is a trading method based on 8 rules that must be complied with to open or close a trade. It uses a number of proprietary indicators. The STS8 method can be used to trade stocks futures and forex on an end of day or real time basis.
There are eight clearly defined rules for making swing trading buy or sell decisions. These rules are applied to a customized chart template with a number of proprietary indicators. Some of the rules allow alternatives.
One of the indicators is an expert system that can be used for full auto-trading.
The charting program used is NinjaTrader V7, courtesy of NINJATRADER LLC. This program can be downloaded from: (http://www.ninjatrader.com/) .
It can be used free of charge if you do not want to trade full automatic with your personal broker. End of day price data is also available free of charge.
We will have a detailed look at each of the rules and the rules for opening a short trade and closing a trade. Inclusive a worked-out example trading the stock GT in a period from July 2010 till August 2011. A buy and hold strategy during this period gives a profit of about 40% while applying STS8 produces a profit of 300%. I wish you a lot of fun and Happy Trading!
The STS8 template has a number of indicators in four different windows.
Main price chart window:
Open, high, low and closing prices are displayed as a standard candle chart. The candlesticks are color coded by an expert indicator for buy, sell and open short position signaling. However as with the basic candle coding an empty (white) body has a closing price above the opening price and a filled (colored) body has a closing price below the opening price.
A proprietary stochastic RSI indicator (light blue) and a standard stochastic oscillator (dotted red).
A proprietary %b oscillator based on the BBS (Band Break System) bands. More about the BBS system now available HERE.
A standard RSI indicator (light blue) overlaid with an average (dotted red).
In the first sub-window there are 2 indicators. The first is a fast stochastic RSI "SVESRSI" (light blue) and the second a slow standard stochastic (dotted red).
The second sub-window is a %b indicator "SveBBSpercB" a %b indicator based on my BBS band deviation system.
Finally in the third sub-window there is a standard RSI indicator (light blue) with a simple moving average (dotted red).
For all the basic techniques, please consult my book “Capturing Profit with Technical Analysis”, published by MarketPlace Books and available HERE
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
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