Here are some basic ideas from Trader Jack about how to trade the traderunner indicator, taken from an interview in early 2006. The Terms and Conditions of our disclaimer apply to this article, and nothing in it should be considered as advice to buy or sell any particular financial instrument, or even follow any particular course of action.

"...First off, NEVER trade without a stop loss. No stop loss is equivalent to going down the docks without a condom and shouting 'Hello Sailor'. Trading is dangerous enough already without taking STUPID chances. Anyone who tells you that you don't need a stop loss is STUPID and if you follow their advice, you are more STUPID than them. Starting to see what I'm getting at? Personally I prefer hard stops - that way I let the market 'exit me' - I don't have to do anything having made the decision on where to place the stop. I do know many people who prefer 'mental' stops. Not many of them are still trading because the thing about a mental stop is that you have to action it, and you can bet your bottom dollar that the time you REALLY REALLY REALLY need to action it, your phone line goes down.

Where to place your stop is a lifetime's study in it's own right - I use volatility to give myself a ballpark number, but it's worth stating that you are unlikely to be able to 'work' a particular instrument properly until you are thoroughly familiar and comfortable with it - that comfortableness comes from understanding what it 'normally' does, so you can, among other things, set your stops properly. Set 'em far enough away to give your trades a little breathing space, but not so close that intrabar volatility is an issue.

As for the traderunner indicator - I'm understandably proud. I've been using it myself long enough to be perfectly sure of it's capabilities. Trading it is pretty simple - a signal bar means that the day after the signal 'confirms', the market should start to move in the signal's direction.

When swing trading with the indicator, look for signals appearing on the horizon (to the right of the chart). As they get closer day by day, you need to prepare to trade. Sometimes they vanish - the reasons for this are technical, but valid. The original signal 'direction' (long or short, green or red) is 'provisional' in the sense that it is subject to change up to and until it 'confirms'. If you click a signal bar, or hover your mouse over it, you can see if it is confirmed or unconfirmed.

Trading the signals before they confirm is risky, because they can and do 'flip', even on the day itself. Once confirmed, however, then the direction is set, and falls into the probability matrix for that particular instrument. If you really MUST trade before it confirms, then the best advice I (or anyone!) can give you is to watch for a breakout up or down beyond the high or low of the signal bar itself - if it occurs, go with it because this is likely to be the direction the signal confirms in. Likely, but not mandatory! And that, of course, is yet another reason why you need stop losses.

Have fun!

TJ

Disclaimers apply.