We have developed a set of 2 custom indicators that generate buy and sell signals for any market that can be charted. We have named one of them (the faster one) "Odo" and the other "Rod." Together we affectionately think of them as "Rodo." Applying Rodo to the markets/indices we follow, we get earlier, much better entries than waiting for our "pattern" trades to trigger -- the "pattern" trades are the trades illustrated in the charts posted here in the past. Rodo also gives many more trades and catches many more moves than that other method.
Rodo back tests very well on its own, but subjects us to a great deal of frustrating market chop. To avoid chop as much as possible (it is not always possible) we require confirmation of a new signal. This confirmation can come from any one of a number of indicators, based on either volume/money flow, momentum, or price. Sometimes, Rodo triggers a new signal that is confirmed the same day. In that case, we enter at the next day open. If the signal did not confirm the same day, we wait for the confirmation the next day, and enter intra-day when it does confirm. Rarely, we get such a strong, sudden move against our current signal, that we receive confirmation before we ever received a new signal from Rodo. In this case, we enter intra-day also.
This is probably as far as we will get in developing a "mechanical" trading system. We would not want to trade a "black box" system that blindly issues signals that have no real meaning to us. This system is not really a "discretionary" system as we have back tested it - it is very objective and precise. In back testing, Glory ignored things like price support/resistance, moving average support/resistance, double bottoms/tops, etc. -- things we would NOT ignore in real life trading.
We do not have a name for our "system" yet, but we are thinking of something along the lines of SETM -- Show Everyone The Money. :)
