Track 'n Trade Bulls 'n Bears Trading System
Blue Light Trailing Stops
In this Track 'n Trade training video, we're going to be discussing the Auto-Trailing Stop System, known as the Blue Light System. Now, you've heard me say it before, and you'll hear me say it again, getting into a market is easy, the difficult and (in my opinion) the key ingredient to your success or failure as a trader is knowing where and how to get out of the market. This brings us to our discussion of the Blue Light System, which is basically our safety net. It can help us know where to get out of the market, before the market has a chance to actually turn around and catch us off guard.
You've also heard me say that in this industry, we use a lot of little rhymes, or "montras" to help us remember to stay on the straight and narrow path. One such montra is: Plan your Trade and Trade your Plan. Simply put, I believe the single biggest problem people have when it comes to trading is knowing where to place their Stop Loss Orders. Because of this concern many traders don't even bother to trade with Stop Loss Orders. Which is simply their way of skipping the one key component mentioned above, that of: Planning our Trade and Trading our Plan.
Basically, if you're trading without a Stop, you have no plan. The reason people don't trade with Stop Orders, is because they don't know how to plan a trade. Then execute their trading plan. These individuals will soon be turning their account balances over to those of us, who do know how to plan a trades, and are able to actually execute a trading plan. So in light of this situation, I want to introduce you to the Blue Light Stop Loss System, which is derived from the Parabolic SAR developed by Welles Wilder.
We here at Gecko Software have modified it and have hyperbolically linked it to the Bulls 'n Bears System. Which allows us to have a dynamically mathematically calculated Trailing Stop System. We use this stop system in conjunction with other trailing stop methods. But it is the core of maximizing our profit potential, with each and every trade.
Here's an example of the Blue Light System in action- Notice that you have small blue dots on the screen, following up the trend. These are hyperbolically calculated mathematical stop order placement points. Also, notice that they change or move, every single day, or with every single price bar. That's right, we move our Stop Loss orders every single day, on a daily basis. We move them with every new price bar, when trading on an intraday chart. I know that's a different concept than what many of you are use to doing. But this is the best way we've found to help us maximize our profit potential.
The next step beyond a single Stop Loss Order placement point, is to break our Stop Orders apart. Using multiple Stop points along the trend. Combining several different stop placement strategies to capitalize on the best of all worlds. Here's an example of how I like to trade with multiple contracts, then place my trailing stop orders between traditional support and resistance points, the Blue Light System and I've also included the Parabolic SAR as an additional Stop Placement point. Giving me three different Stop Placement points, to maximize my profit potential, while minimizing risk.