Developing New Trading Systems 73

Introduction 73 The Assumptions behind Trend-Following Systems 74

The 65sma-3cc Trend-Following System 75 Effect of Initial Money Management Stop 88 Adding Filter to the 65sma-3cc System 93 Adding Exit Rules to the 65sma-3cc System 99

Channel Breakout-Pull Back Pattern 101 An ADX Burst Trend-Seeking System 111 A Trend-Antitrend Trading System 116 Gold-Bond Intermarket System 123 A Pattern for Bottom-Fishing 132


Contentsix

Identifying Extraordinary Opportunities 140 Summary 144