Sidebar: 2/20-Day EMA Breakout System Defined
Most trading systems fall into two categories. One, the most popular, is the trend-following method, where the signals are oriented toward putting the trader on board long-term trends. The profits acquired during the long-term trends will, hopefully, recover the monies lost during trendless activity. The other category takes advantage of trading ranges, and the trader makes the most money when the market's primary direction is sideways. Here's a trading system that incorporates both approaches to time entry and exit positions.