The Weekend Trend Trader strategy is a turnkey strategy that uses no discretion. In other words the strategy has a set of rules and users should understand why they entered a trade and when and how they will exit. Because the rules are strictly and mathematically defined we are able to back test the strategy on historical data. This enables us to understand the strategy’s nuances and therefore better understand how the journey to success will be travelled. The strategy is a combination of several tools that

Ensures you will always be aligned with the trend of the broader market,
Enters positions at specific points and with reasonable confirmation,
Manages existing positions with a trailing stop loss,
Defends existing positions if the trend of the broader market reverses,
Outlines how much to invest in each position.

Author’s Note:

Welcome to the Weekend Trend Trader strategy manual, designed to assist you trade and invest successfully. This is a simple, fully tested strategy that you only need to run once a week. It is ideal for people who work full time or those with busy schedules. The financial markets provide ample opportunity to profit from speculation. Unfortunately, a large percentage of individuals fail to make any profits at all, with many succumbing to total loss of capital and consequent emotional anxiety. There are very specific reasons why the vast majority of people constantly lose whilst only a minority wins. By defining the rules of your personal trading plan it becomes possible to back test your methodology and therefore gain an understanding of the strategy’s strengths and weaknesses. With the insight of back testing it becomes possible to build on these strengths and limit the weaknesses. This is what professional traders do and continue to do on an on-going basis. I devote many hours each day to research and development. For the novice, this gets squashed into a few hours reading a trading book and therefore leads to potential failure before the first trade is even placed. In other words, you need to know if your strategy is plausible before starting to use it.

To give you an idea of the kind of work and commitment that is required to design and test a trading strategy, back in early 90s, before computerised trading software, I came up with my first trading system. I spent 2 hours a day for 18 months looking at charts and going back through some 30-odd years of data. I recorded all trades the system generated on a spread sheet, plotted the profits and losses with maximum drawdowns, plotted excursion analysis and compiled as much statistical information as I could gather. After subtracting commissions and slippage, I discarded the largest profitable trades and then divided the yearly returns by half and still came out with something that looked viable. Technology has come a long way since then, but the same principles need to be applied.

The basis for successful speculation is in its design or plan. Let’s face it; you wouldn’t attempt to build a house without a plan. You wouldn’t build an aircraft without understanding aerodynamics, lift, thrust and drag? So why do so many people approach trading and investing without a plan? The answer is because they are sold the dream of making a quick buck with no effort. Therein lies the problem and the reason why 80% to 90% of traders fail. Elite athletes don’t achieve overnight success, and neither do successful traders.

An appropriate plan can be extensive, yet basic. This is the objective of this manual; to work towards a simple yet profitable plan that can be applied to any equities market.

Methods of speculation are infinite. Everyone has his or her own way of using information to trade. It should be recognized that there is no ‘holy grail’, there is no ‘ultimate’ or ‘correct’ way to approach trading or investing. Everyone has a different comfort zone, methodology, risk appetite and psychological makeup that makes it impossible for one strategy to fit all.

The primary aim of this manual is to give you a comfortable platform to trade from. You will learn how to stop losing your capital as well as how to make profits. Therein lies the secret to successful trading, limiting your losses. Being comfortable in the fact that you are able to control your losses will be the start of a journey that may well change your life. It certainly changed mine.