SMAX trading system by jimmer
home
daily charts
old daily charts
chart archives
Templates
FAQs / Quick Tips
Trading Discussions
Ensign class transcripts
Trading Articles
Out-of-Box Trading Articles
Trade Setups
Trading Systems
posting instructions
links
transcripts
traders
disclaimer
Contact Us

Overview

This was Jimmer's original MACD crossover system, since superceded by his 2X method. Jimmer kindly posted it for all of us to study. It uses a combination of price action and indicators to catch big and small moves in the index futures. There's much to be learned from studying it, even though he has since moved beyond it. For Jimmer's latest work, see the 2X page.

Chart Setup (tested only on NQ)

Work with 3 min or 2 min
Stochastic 5,3,3
MACD 8,13,5 (4,11,6 can also work very well) - I use lines, but histogram ok also.
ADX 9
Bollinger bands 8 period simple with 1.8 standard deviation
Moving averages - 5e, 8s

Entry Rules

1. If flat, enter long or short in direction of fast line when MACD fast line crosses the slow line on a closed bar basis, entering one tick past the closed bar. If crossover is very near, but not fully accomplished as of a bar close, trader has d iscretion to enter upon takeout of approaching bar in direction of anticipated cross.
2. Continuation entries can be made either as re-entries or adds upon takeout of retracement bars Continuation simply means resumption of a trend after a retrace of no more than 6 bars.
3. Except for continuation entries, never enter long when price is in top 1/3 of BB range or short when in bottom 1/3. This rule is meant to avoid whipsaw losses during chop.
4. If traded move is 20 points or more or if new HOD/LOD after first 30 minutes and is stopped out do not enter in reverse direction even if MACD has crossed unless or until:
a. MACD and/or stochastic have retraced and then made lower high or higher low (divergence). Enter in direction of MACD signal upon takeout of retracement bar in needed direction, or
b. MACD histogram dips and then makes a lower high or higher low (divergence).
The purpose of this rule is to avoid getting caught on the wrong side in a short retrace of a strong trend. This rule is more effective after the first hour high and low are in.

Stops:

1. 5 point initial stop
2. Move stop to breakeven when in the money by 5 points.

Exit Rules:

1. Unless one of the following rules occurs first, exit will be upon cross of MACD in opposite direction of current trade.
2. Once you are able to move stop to break even and trend appears solid, ignore all other exit rules, including trailing stops, and let exit be determined by breach of last swing high/low. This applies until stochastic is well into overbought/over sold area (80/20), at which time trailing stops should be considered, particularly is macd divergence has appeared on lower time frame.
3.If trend day is occurring or suspected and ADX is over 40, trader has discretion to use cross of 5ema over 8sma for exit and ignore all other possible exit signals. (I prefer to view the a lower time frame than the one traded to look for this cross. C an also use stochastic cross as exit trigger.

Common Sense Rule:

No matter what any other rules say, if it seems like a really dumb idea, don't do it.

Resources:

  • this system was superceded by Jimmer's 2X and 2X-lite, but there's still some real good stuff in the charts and files below

Charts and Files:

ftp connect failed