Trade Type  -  Mean Reversion

We are only seeking days in which the market has sold of and the Algos fire. We apply this to the EMini (SPY),  in which numerous studies and papers attest that it is the most mean reverting  over commodities.

 

ENTRY TYPE - Algo Scale In
Most traders are taught to trade one shot in, meaning ALL in, and one shot out. In addition, they trade everyday, in both any type of day.

To address risk, they place a stop above or below their entry, and hope they don't get stopped out.

This is a time honored approach of those that are net losers, and is still being taught to new generations of traders. The implication of a one shot approach is that the trader must be spot on, a marksman in the entry.

We do not want to be marksmen, but to accumulate in a area, using a Algo entry. In addition, we only trade on certain day types. We attempt to mimic Institutional traders who move capital in multiple trades to build a position. So, we DO NOT go all in, but divide it into 2-3 entries or tranches per Algo entry. This means:

​

• Price can go against initial entry position

• Price can go against initial entry into the overnight market in which full margin is required

• We can profit on only a portion of our capital

​

Prof$ knows  a certain % of traders are weak hands and trade on Day Margins, so they simply can hold price up/down into the close, knowing these traders must exit.

 

You are going up against Professionals, and they have many tactics. Therefore, this is not suited for traders that:
 

• Are poorly capitalized

• Want to go ALL IN on entries

• Must exit the trade the same day

• Use high margin (Day Margin)

 

When we execute a signal, we make a partial entry, breaking up our orders into 1/2 or 1/3 entries.

​

​

​