Daytrading  |  JUN 2009

Short-Term Trend Trading by Russell Rhoads, CFA

Short-Term Trend Trading by Russell Rhoads, CFA This basic system can be traded profitably on a short-term basis. Some of the most basic systems can be the most effective means of making money in the futures markets. In this article I will demonstrate one of the simple systems that can be traded successfully on a daily basis. There are no complex calculations to determine entry and exit points nor indicator crossovers to determine entry and exit points. If you can add two numbers and then divide them by 2, you can do the most difficult calculation involved in this system. All this system does is some near-term price comparison, placing a stop order to keep losses in control and determining the time to exit the trade with your (hopefully) profit or loss. MY TRADING DAY The basic philosophy behind this system is to latch onto a trend that is in place based on the first half or so of a trading day. As many markets have gone to 24 hours a day, it’s difficult to determine exactly what entails a day of trading. I like to divide things by who is awake and trading at any given time, at least those of us who live normal lives and don’t live in Chicago and trade Tokyo hours. And because I live in Chicago, I usually designate 6:00 am Central Time (CT) to 3:00 pm CT as my trading day.

by Russell Rhoads, CFA