Track 'n Trade Autopilot Plug-in

Fitz and Starts

Video Transcript

I call it Fitz and Starts because with this system, we are looking to catch a rising, or falling star. A market that, we feel, is getting ready to take off in one direction or another, and we want in on the major, long-term move.

I set this strategy up on a very small time frame, maybe a 10 minute, a 15 minute chart, or I even prefer the Range Bar chart for this strategy; maybe Range 6, 8, or possibly 10, you can do some experimenting on your own, and decide which works best for your particular scenario.

What we do is watch a daily chart. We’re looking for a strong directional reversal point to appear, and it’s at that point that we want to start executing the Fitz and Starts strategy, down on the smaller time frame, in an attempt to catch the optimal entry point for the upcoming big, long-term move.

So here’s how to setup the Autopilot:

First thing we’re going to do here is give this strategy a name, and I’m calling mine Fitz ‘n Starts

I’m using my favorite indicator, that of course being the Bulls ‘n Bears.

In this example, I’m going to enter a single quantity of one to enter.

And I want to place my order(s) continuously. This is very important.

The reason I want it to be continuous, is because just as the name implies, we may have to enter the market multiple times before we hit a signal that keeps us in the market for the long-haul.

So, technically speaking, we actually expect to get stopped out several times using this strategy, before we finally catch the trend, but if we get stopped out, we just have the Autopilot wait for the next signal, and we get right back in again.

Cut our losers short, and let our winners run, and in this case, we’re going to the extremes on both sides. We want to cut our losers really, really short, which is why were down here executing our entry on a very small time-frame chart, but yet, we’re going to really let our winners run, calculated out on a much longer-term time frame, such as the daily chart.

So in other words, we’re trading a long-term chart, the daily, yet we’re executing our entry on a very small time frame, the range 6 in this case, therefore we may need several attempts at entry, and that’s why we need the Autopilot, because it will sit and watch the market and make sure we’re in the trade for the big move.

We don’t want to use Time Restraints, because it may take us some time to get our signal for entry.

So, coming down to our Entry Strategy, we set this up to just be a simple Market Order Entry on Signal. Very easy, and since we’re using a Range Bar chart for this setup, we don’t need to worry about thrust signal prevention, or inactive market signal prevention filters, those issues are handled within the Range Bars themselves.

If you are using minute charts, you might want to take these filters into consideration, but for this strategy, maybe not, since a large move in the market is actually what we’re expecting, and looking for. Use those filters at your discretion.

Now here’s a very important step to this strategy. Our logic is giving us a directional bias, is this case; we’re expecting a huge drop in price, so we want to be directional in our order entry strategy, so in this drop down window, we want to select Short, which will limit The Autopilot to only taking short positions whenever it receives a sell signal from our Bulls ‘n Bears indicator, and will ignore any buy signals.

If the long-term trend is neutral and we’re not sure which direction it might move, but we’re pretty confident it’s going to move one direction or another rather soon, we could use the both setting.

For example, we might use this strategy to take one side or the other during an unknown news event, where we’re not sure which direction the news will move the market, but we’re pretty confident it will move once the news has been heard.

So let’s move on, the next thing we need to define is our exit strategy.

Now this is relatively simple, we want to establish a stop loss order just behind the market, that then moves to break even, and then stops trailing.

Now depending on which market you’re using, you’ll need to determine the maximum amount of risk you are willing to take when entering an order. You want this to be rather small, because we are truly anticipating getting stopped out several times before we catch the overall longer term trend.

So in this box, I’m going to put 15, and you can see, given this market, this is a $75 max risk.

Now as the market begins to move in our favor, the Autopilot is going to slowly move the stop order to break even. So here I’m going to select continuous Until Break even.

Now of course, you can choose any one of these trailing stop order to trail to break, whichever one you feel most comfortable with, but the key here is that we want to stop trailing, once our order reaches break even.

At this point, we just hold our order at break even, and start watching our position play through on a longer-term chart. If the market comes back and hits our stop order, then we exit the position, and the Autopilot will reset, and wait for another signal, enter, and the process starts all over again, automatically.

Notice down here at the bottom of the Autopilot settings, we don’t select any exit method at all. That’s because we’re looking for a long-term trade, which we’re going to manage either ourselves, or we can also let Track ‘n Trade handle this for us on a different time-frame, such as a range bar 12, or even the daily chart.

And that’s how we use the Autopilot to help us establish a position for a long-term trade, cutting our losers short, and letting our winners run, and using the Autopilot to help us establish our long-term position, with a limited amount of risk.