Boomerang Trader

Using precision trade setups to win in the markets

Posted on07. Apr, 2011 by Mohan.

Good morning.

Mohan here with the latest blog on Boomerang Scalp Trader and how to combine precision setups with Boomerang.

The ES markets have become more active now which is great after the hibernation period we saw surrounding the months of November-Feburary.

I want to show you a newer development in the way to use the Trade Bias Selector combined with the 44 SMA I talked about recently on a previous blog.

Keep in mind that everything we place on our charts is “information”. Thats all it is and we should develop ourselves with the “traders mindset” along with our ability to read and interpret indicators.

An experienced trader with a strong traders mindset can trade a chart without any indicators on it at all using pure price action.

Of course if you have excellent tools like my Boomerang Scalp Trader and become skilled using the methods I show you  there is an advantage. Just remember however that we are trading Price Action ultmately.

When we buy we want to see the indicators line up and the price to go up to hit our target. But Indicators follow price action…not the other way around.

So be sure to read my favorite book on Trading Mindset Development by Mark Douglas called “Trading in the Zone”. Study this book everyday combined with developing your skill at using Boomerang Scalp Trader and you should see improved results in your preception of the markets.

Today’s lesson on Boomerang is how to discover precision intraday setups using  the Trade Bias Selector and the 44 per Simple Moving Average.

The main idea is that we want to Fade (which means reverse against) an overextended or exhausted level as shown on the TBS.

Once prices have crossed over or under the 44 SMA we then only want to take trades on that side of the 44 UNTIL we hit exhaustion at which point we can look to Fade again.

This is the essential lesson of intraday trading. I have given you the tools to do this with Boomerang Scalp Trader so now it is just about developing the skill to read the setups while building your “Traders Mindset”.

When the Trade Bias Selector hits the Red Level exhaustion point on the lead line (I’ve changed it to a bar on these charts which is how I prefer to use it) then you look for a fade using the other Boom tools.

Notice how at around 7:35 (these are PST settings on the chart) the market made a reflex bounce off of the exhaustion point shown at around 6:00. However, the Boomerang bias line configuration and for the most part the prices held under the 44SMA.

The next short signal arrow was a solid winner with red bars all the way down the Boom channel.

Similarly at around 9:24 we saw the same repeat pattern. The difference though you can see was that we did not hit complete Red Line exhaustion but the Histogram had turned black on the other side of the Zero line and (Key) the lead bias bars moved up above the Blue Line with matching Boomerang Force Index turning green.

Consider the Blue Line levels as minor exhaustion points when the Force Index matches a move of the historgram back on the same side of the Zero line.

An additional filter could have been used to not take the trade until the Trailblazer line crossed over the 44 period line.

Below I show a chart that gives details on the method described.  If you can avoid choppy periods by just fading exhaustion points and only taking trades on the same side of the 44 sma bias you will find the trades work out easier in the majority of cases.

All the best of success.  Mohan

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