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What You Can Expect

The SP technique has been tested extensively on historical data dating back to the 1960s. Using various combinations of percentages to trigger SP entry (i.e., 75 percent, 65 percent, 60 percent for buying; 25 percent, 15 percent, 30 percent for selling), I have found that the accuracy of SP in terms of follow-through is high. Even in a large sample size such as the one I tested, accuracies in terms of follow through in the direction of the signal as high as 65 percent were not uncommon during certain time frames. However, since the SP method both in its original form and in the aggressive mode is more of a method than a solid mechanical sysВэtem, results in terms of application will vary from trader to trader. Although I will not guarantee definitive performance results since all traders trade differently, I can tell you that if you use both the original SP and aggressive SP methods consistently and with close attention in terms of follow-up stops, you can do extremely well.

Preferred Markets for SP Application

Although SP signals will occur in virtually every market, the day trader is looking specifically at those markets which have a high tick value and sufficient volatility to generate meaningful moves within the day time frame. The old standbys, S&P, Swiss franc, British pound, T-bonds, crude oil, heating oil, etc., should definitely be considered as day-trade candidates. However, there are other markets which, subsequent to major news items, reports, and other fundamentally inspired events can also yield outstanding day-trade pop opportunities. These should be considered as well. I refer specifically to such markets as cotton, lumber, pork bellies, and soy beans.