Day Breaker Day Trader Suite.

There are three types of trading systems in general: trend following, volatility breakout and trading range. The essence of our flag ship trading system is know when to trade the breakout and when to fade the breakout and combine that into a day trading strategy. (See brief on support and resistance).

To do that the %C-Day Breaker Suite utilizes a completely different concept. Day Breaker Suite is unique in the fact that it utilizes CBI's proprietary market condition indicator %C (percent contraction). In essence %C anticipates when the market is about to go into a breakout or follow through mode. In this case the system wants to capitalize on the market when it has reached an extreme in the trading range and is prime for breakout. Alternately, %C anticipates when trends are extended and reversal at support or resistance should be expected. In the later case, the system is looking to enter off support or resistance, not through it.

Most traders' key on market direction not market condition. By doing so they're trading in a two dimensional environment: direction and price. They are missing a critical element in their trading system. A good trading system is a three dimensional.

The ultimate question for all traders is, do I enter on a reaction or do I enter on a breakout. Without a market condition indicator, they may as well run a race on 7 of 8 cylinders. CBI's %C indicator is a market condition index that has proved its merits since 1994 and is NOT part of the public domain.

In behavioral terms, when tension levels are high in the market - when both the bulls and the bears are being frustrated by lack of carry over in any single direction relative to the time frame they are trading, %C has readings above 55 suggesting a breakout is very near. Alternately, when %C is below 25 it is calling for a shift from dynamic trend to a trading range condition and suggests that the traders should look for an extreme of the current trend and to trade for a reversal.

The direction of %C is also important. In general when %C is ascending the market is in a trading range or choppy market. A condition where the trader should fade the breakouts: buys at support and sell at resistance. On the other hand, when %C is descending, it is calling for a trending condition and breaks of support or resistance should get carry over. In other words, your breakout system is getting affirmation of the trend.

We call %C-Day Breaker the Master day trading systems since it trades two major market conditions: the breakouts and the failed breakouts. So in a sense it is diversified within itself. It is designed for the large S&P and the four major mini future’s contracts.