Boomerang Trader

Answers to questions about Boomerang

Posted on 08. Mar, 2010 by Johnnyr in Ask Johnny

Good afternoon.

Johnny here on an extremely choppy Monday.  There is nothing anyone can do when the market becomes choppy and listless.  Its just the way the markets are .

There is no system out there that will not get cut up in choppy markets like this. The best thing to do is to stand aside. I did a special briefing on this a few blogs back. Just stay out when you see the market like this.

Usually when a market is this choppy there will be a stronger move later in the final hour. Check it out.

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Your Boomerang Questions answered here:

How did you come by developing Boomerang?

I’ve been trading for over 15 years and have tried many different methods and systems. Some were overly complicated and some were overly simple.  Traders have strived for their entire careers to discover the “perfect system” for day trading the index markets.

After the internet really took over in 2002 we have seen a plethora of technical indicators. Practically all of them are good in that they serve a particular purpose or give a certain type of reading on the market.  Indicators are just that….tools to read or perceive something about the market action.

Boomerang Scalp Trader evolved after I found myself coming back again and again to very simple things. I had come to realize that trading was really not about particular indicators but in becoming experienced with your tools.  That is what Boomerang Scalp Trader is and that includes the handbook which is the most important part.

What are the drawbacks of Boomerang Scalp Trader?

The so called drawbacks are not necessarily in Boomerang but in the markets themselves.  No system is going to work well in a choppy, go nowhere type market that is trading in an active 3 point range.  You have to adapt when you see that by either standing aside or scalping for just 1.00 on the trades.  Of course that is a modification and logic tells you that the stop would have to be tightened too unless you were a really fast, expert scalper.  If you learn to read the market tape bias as we explain in the manual then you will be able to use Boomerang more effectively.  One aspect of Boomerang that some might consider a “drawback” (I don’t) is when you see an ascending market for example and the Boom bars are off red color with Red Sell arrows coming in.  For an inexperienced trader they may perceive that those are “wrong signals” but if they had read the handbook they would know that these are the algorithms shifting to a sell bias in spite of the market going up.  An experienced trader would see it as a “stand aside and get ready to short” signal.  Again, this is what systems do.  Give you readings that assist you in determining where and how to trade.

What are the +5/-5 levels on the Boomerang Force Index?

These are levels that I have predetermined from developing this BFI over the years.  When the market is swinging during the day these levels will show over extended energy on the Force Index.   You can look for reversals soon after that usually.  If the market tape bias is one sided bullish or bearish then the prices are going to hang up or down on that +5/-5 level and stay there until that pattern has exhausted itself fully.   We mentioned the 1-2-3 pattern in the blog as a way to determine when that pattern is close to a conclusion.

Does Boomerang only scalp the markets?

Primarily yes, but Boomerang had a recent webinar with Optimus Futures where the narrator, Mohan, talked about how to catch what is sometimes called a “runner”.  That is an extended move beyond our normal 3 point scalp.  I had built this feature into Boomerang by adding the “Trailblazer” line (black) which gives a simple bias reading by watching how the range bars are reacting to that line.  As long as the bars stay in general on the same side of the Trailblazer and the TB holds the Blue Boomerang Bias line, you can hold that trade for a runner which nowadays is usually up to around 6-8 points.

What is the most difficult thing about trading with Boomerang Scalp Trader?

That is mostly the psychological component of the individual trader. If they are not experienced with scalping or the high speed of the Emini S&P500 then it can come as a surprise when the market goes into what is called a “fast market”.  In other words, it is human nature that when the market is moving in your direction at top speed and you glance over at your money meter on the trade platform and its soaring you want to hold on.  That is when you should be getting out.  We call these Volume Blasts or Delta Blasts and you need to be liquidating your scalp position into that blast and not waiting for it to “end”.  The so called end is usually a fast reversal fade off the blast back to near break even on your trade which was up 4-5 points at one level.  That can be extremely frustrating for an inexperienced trader especially.  That is why in our manual we recommend a specific setup on Ninja that automatically scalps the trade out at +3.00 gains.  Sometimes inexperienced traders will tell us there is something wrong with Boomerang …because they didn’t get out fast enough. As mentioned, it’s a psychological issue which is due to inexperience in scalping the Emini S&P500.

Are there any closing thoughts about Boomerang?

As the developer I looked around for some time on how to approach the market. Then I discovered Adam over at Indicator Warehouse.  He is really a professional that knows his stuff and is an honest business man.  I told him I wanted to offer a really superior trading system I had developed for a very low cost. I guess I was getting tired of seeing these overpriced and hyped systems and courses.  So I told him to make it really affordable so traders could have this excellent system that I have used for years at a much lower cost then what is out there and with all the super cool Ninja features.  I said if you do that I will follow up with great trading manual and free blog so that traders could learn to trade with it at the bare bones cost to them.  That was my goal and so far we have accomplished that. I may take Boomerang Scalp Trader off the market anytime as I don’t want it to become too popular of a tool that is altered by excessive volume at the signals it gives.  That would take thousands of contracts so it’s not a big concern, but I am keeping my eye on it.

Tags: day trading, e-mini, emini, indicator, S&P 500, scalping