Tuesday, May 13, 2014

"ETS 2.1" - One of My Favorite Trading Systems

There are literally thousands of trading systems and methodologies out there.   It can be challenging to know which ones would be a good fit for your trading style.  It’s always a good idea to have multiple indicators or systems that complement each other, rather than rely on one single signal.  Getting “agreement” from several systems can bolster confidence in your positions, and give you greater clarity.  One system I have found to be particularly useful as a confirming call is the “ETS 2.1 Trading System”. 

ETS, developed by Michael Mermer, is a trend-based system, and has been highly rated from many sources.  In fact, Futures Magazine rated it as one of the “Top Ten trading systems of all time”.   On the developer’s website;  traderssoftware.com, they boast some impressive calls in market direction, including a chart that shows how ETS called a clear “Sell” signal before the “Flash Crash”.     ETS is also quite versatile.   It works on a variety of instruments, including stocks, futures, indices and forex, and performs well for both daily and intraday charts.   Personally, I like to use the Expert Advisor and Expert Commentary to help confirm a position and set profit targets.   However, the best reason to have the ETS 2.1 system is that it is so easy to use!   Here are a few examples:

Here you can quickly see the ETS buy and sell signals on a chart of the S&P 500.  The commentary window shows the suggested stops, and profit targets for the buy signal in September of 2013.  At the bottom of the chart you have the ETS Trendwatch indicator that gives you a good way identify the overall market trend.    The Trendwatch  indicator also merges nicely into any template with your other trend-based systems.

Here is the ETS template on the Nasdaq 100 using 30 minuet bars.  Again, it does a great job spotting the trend quickly, and confirms it with the Trendwatch oscillator.    With its automatic and logical stops, it quickly gives you starting point to keep your trading efficient.  ETS keeps you in the trade throughout the trend.

Here is one more example using the ETS on light crude (continuous).  You can see the initial profit target (107.63) as shown touching the upper horizontal line.  This obviously worked out to be a great exit point, even though the price continued to reach higher over the next few weeks.  If you had "held on" longer, you would have crossed below the 21-day moving average, and ridden through a zone of sideways price action, until ultimately getting a Sell signal a few weeks earlier.  This is a great example of the intuitive the profit targets in ETS.

Altogether the ETS add-on system includes an Expert, two Explorations, two Templates and five System Tests.  There are optimizations available as well.   ETS is a proven system and its one that I am glad to have in my trading tool set.  This is one add-on that every MetaStock user should at least try.  I think you will find it useful in confirming your positions and making you a more efficient trend trader.
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