Trend Jumper - NetPicks Trend Jumper Rules.pdf · The Trend Jumper seeks to find near term support...

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Trend Jumper

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Basic Premise

The Trend Jumper seeks to find near term support and resistance levels and then identifies places on the chart to ‘JUMP’ off of, for quick and immediate profits.

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Long trades are like jumping off of a trampoline

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Short trades are like jumping out of an airplane

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It is a pure ‘price action’ strategy

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The indicators are designed to show us where the near term support and resistance levels are and to give us

lines to ‘jump’ off of

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Trade Psychology

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Indicators

1. Two EMAs; 50 and 200

2. Two PTU Jumplines; 9 and 4

3. PTU_TrendJumper Calculator



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Short trades are like jumping out of an airplane

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Dynamic Setups

Trades are based on the length of the setup bar itself, making it dynamic and self adjusting.

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Jumpline Crossover Trade

1. Fast Jumpline (JL) crosses over the slow Jumpline from below to above, for long trades

2. Fast Jumpline crosses over the slow Jumpline from above to below, for short trades

3. Can not take these trades against the direction of the 50 ema

4. Can adjust around the ema to get through it, even if it is against the direction

5. Trade is cancelled if the fast JL moves back to the other side of the slow JL prior to triggering in, or, if a bar closes below the slow JL

6. Setup is the FIRST green bar for longs or red bar for shorts that occurs AT or AFTER the crossover

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Jumpline Crossover Examples

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JUMP Trade

1. Island Bar(s) needed

2. Proximity Bar needed (pullback bar)

3. First Green Bar is the long setup bar

4. First Red Bar is the short setup bar

5. Dojis are ok to use a setup bars

6. Fast JL must be above the slow JL for longs

7. Fast JL must be below the slow JL for shorts

8. Trades are cancelled if the Fast JL moves to the other side of the slow JL, or, if a bar closes on the other side of the slow JL prior to triggering in

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JUMP Trade Definitions

1. Island Bar: A bar that is above the line you are jumping off of for longs (or below for shorts) that is NOT touching that line. It must be a certain distance, the default being 2 ticks in most cases.

2. Proximity Bar: AFTER an island bar, this bar must pullback to the line we are jumping off of, typically by 2 ticks or less.

3. Setup Bar: The FIRST Green (or red, for shorts) bar that closes after the proximity bar has been established. It could be the SAME bar AS the proximity bar.

4. JL Confirmation: The fast JL4 must be above JL9 for longs and below for shorts. It can be ON or equal to the JL9 in some cases.

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JUMP Trade Setup ReCap

1. Island Bar(s) needed

2. Proximity Bar needed

3. JL Confirmation needed

4. Can occur off of the JL9, or either of the EMAs (50 or 200)

5. Trade is cancelled when the bar closes on the opposite side of the line that is being ‘jumped’ off of, or, JL confirmation goes away.

6. First green bar or doji is the long trade setup when all conditions are met

7. First red bar or doji is the short setup when all conditions are met

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Island & Proximity Bars

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All TrendJumper Trade Setups Behave the Same Way

1. Entry is a breakout beyond the setup bar, typically 2 ticks, depending on the market.

2. Stops are typically 1 tick on the other side of the setup bar

3. Key level adjustments are very important to make both on the entries and stops

4. The length of the bar is the ‘x’ factor and dictates the size of the trade.

5. Targets are 1x, 1.5x and 2x from the high or low of the setup bar

6. Risk Reward ratios are typically 1 to 1.4 or 1 to 1.9 in most cases, depending on what target we are going for

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Other Aspects

– Setups are color coded; Blue for Crossovers; White for Jumps off of the JL9, Yellow for Jumps off of the 50 ema, Magenta for Jumps off of the 200 ema

– Setup types can share the same setup bar but the trade profile itself is always the same no matter what.

– There is a small trade rule

– There is a long setup bar rule

– Breakout and stop levels can and should be adjusted for different markets

– TJ can be traded as a single or multi position approach

– Setups happen while in a current trade

– You have the option to add to your position, or not

– Trailing positions should use the Jumpline Indicators to trail, typically 2 ticks below the last bar that closed above the JL for longs or below for shorts

– We typically want to lock in a tick of profit once the trade has progressed to a certain point, typically the 1st or 2nd target

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Small Trade Rule

– I typically like to exit my fixed position at the 2nd target, 1.5x, unless the setup is too small. Then I will exit at the 3rd target, or 2x.

– The small trade rule is dependant upon what market and timeframe chart one is trading

– Some setups are just too small to trade, depending on the market and timeframe

– Crude Oil Futures 377 tick chart example: I like the 1.5x to be 15 ticks or greater. If it is less than 15 ticks, I will exit my fixed position at the 2x, (3rd target)

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Long Bar Rule

– Some setup bars are larger than most of the bars that appear on the chart, making the targets harder to achieve.

– I like to exit at the first target in these cases

– If the Small Target Rule is 15 ticks, as is the case with the Crude Oil 377 tick chart, then if the first target is 15 ticks or greater, due to a long setup bar, I will exit at the first target.

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Trade Management Rules

– Lock in 1 tick at the first target, unless the trade is a Small Trade and we’re going for the 3rd target.

– If going for the 3rd target, then lock in 1 tick at the 2nd target

– Trade must also travel a minimum amount. In the case of CL 377, for example, it must go at least 10 ticks to qualify for locking in 1 tick

– If the setup is too small to lock in a tick of profit, then don’t move the stop and just let it play out as is.

– You can use one of the JLs to cut risk or lock in additional profit as the trade progresses

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Trailing and Adding to your Position

– A 2nd position can be trailed. Use one of the JLs to trail.

– For swing trading, you can scale out at different target levels and trail the remainder

– You can add another position while still in a trade. Manage it independent of the original position. I recommend being tighter with your trade management to protect the original trade

– Always make sure you are adequately capitalized to trade multiple positions and that you have a complete mastery of the strategy

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Nuances

– EMA convergence; you will find that trades that setup inside the space of where the 50 ema is converging with the 200 ema, that the odds will be somewhat lower.

– Setups that occur after a big move, and in the same direction, have a lower chance of success

– Sometimes the proximity bar doesn’t actually ‘pull back,’ but the Jumpline gets closer to the bar. This is ok.

– The first island bar can not be a proximity bar. You need a proximity bar AFTER the first island bar occurs.

– The proximity can be and often IS the setup bar

– EMA Jump trades DO require that the JL4 be below the JL9 for shorts and above it for longs to confirm the setup. It doesn’t matter what side of the JL9 the bar closes on however. The close of the bars correspond to the LINE that is being jumped off of.

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Trade Sensibly

– TrendJumper should be able to give you enough good trades to quit positive on most sessions and most charts and markets

– Always take a good long look at your charts prior to trading live. You should be able to determine the best times to trade and IF the chart and timeframe give enough good trades on a consistent basis.

– If trading stocks with daily charts, make sure to place your trades after the market has opened to avoid getting bad fills due to gaps

– Practice, practice, practice; you should be able to execute your trades perfectly and without hesitation or doubts.

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Trend Jumper - NetPicks Trend Jumper Rules.pdf · The Trend Jumper seeks to find near term support...

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Transcript of Trend Jumper - NetPicks Trend Jumper Rules.pdf · The Trend Jumper seeks to find near term support...