For 5 years, beginning in 2007, I have been trading with
Matt Reynolds. A couple years before, he created
ZoneTraderTM to identify high
probability setups in auction markets. We have
successfully used ZoneTraderTM Methodology in
FuturesTalk, WorldWideTraders’ Live Trade Radio
to pinpoint high probability trade setups in the Russell
2000 and S&P 500 eMini Futures.
We also used ZoneTraderTM as
the primary tool to identify 366 setups for the COSMIC
Speculator over a 36 month period between mid 2008 and
mid 2010. Of those 366 standing order setups identified,
193 triggered in about 20 commodity markets. One hundred
of the 193 were winners producing a 474% cumulative
gain. So, these active trading tests of the methodology
are convincing evidence that ZoneTraderTM
works effectively.
Below is a brief description of ZoneTraderTM
methodology:
ZoneTrader™ is a predefined market arena for trading auction
based markets that seeks to capture the current psychology of
underlying market on multiple time frames in order to determine
or predict future market direction. ZoneTrader™ employs three
distributions per profile and currently five profiles. The
profiles are Yearly, Quarterly, Monthly, Weekly and Daily.
Each Distribution contains the same seven predefined and
specifically labeled zones. These are: (Neutral Zone, Bullish
Breakout Zone, Bullish Confirmation Zone, Bullish Trend
Extension Zone, Bearish Breakout Zone, Bearish Confirmation Zone
and Bearish Trend Extension Zone) we use these to order, profile
and interpret condition of market to provide traders a
specific description of where the market is and what it is
trying to do.
Zone-Trader™ is a newly created, intuitive form of auction
market theory by Matthew D. Reynolds. Mr. Reynolds understood
that auction markets primarily move within three conditions:
balanced, trending or transitioning. ZoneTrader™ uses these
three conditions to incorporate focus into its predefined market
arena through the definition and labeling of its trading zones.
Auction based markets all do the same thing. For example, they
breakout, they establish trend or they extend trend. If they
cannot breakout, they reverse to point of control. If
they cannot establish a trend, they reverse to the point
of control. If they cannot extend the trend, they
reverse to the point of control.
Through his auction market trading knowledge, wisdom and
intuition, Matt uses these conditions and normal market movement
to create the ability to capture the current psychology of the
market by defining the zones and labeling them either Bullish or
Bearish. The midpoint of the Neutral Zone is the ZoneTrader™
Pivot -- point of control.
Zones above the Neutral Zone are Bullish Zones. Zones below the
Neutral Zone are Bearish Zones. The order of the Bullish and
Bearish Zones are identical and specifically labeled in this
manner to capture the specific condition or movement of the
current market trend (Breakout, Trend Confirmation or Trend
Extension).
Each zone contains a specific rule that is used to determine or
predict future underlying market direction. Whether specific
condition as described by each zone rule is achieved or not
creates the ability to capture market psychology upon that
profile or time frame and generates buy or sell signals
accordingly.
There are a total of 36 rules, 12 rules per distribution.
Our separate Rules Document pictorially describes each specific
rule with specific detail aligned with description to enhance
clarity and understanding for the trader.
The
combination of 5 profiles looking at long-term to short-term
perspective and understanding that Long-Term always
overpowers Short-Term provides the ability to create
strategies.
The
36 rules provide traders with what ZoneTrader™ defines as
Directional Bias -- whether to expect prices to decrease and
sell or to expect prices to increase and buy. The ZoneTrader™
also employs a Control Bias which is derived from the
Persistence Zone. So, not only does ZoneTrader™ provide the
trader with specific future direction of price; it also provides
traders the ability to identify who has control of the market --
whether it is the bulls or bears.
Again, Long-Term overpowers short-term, so, it’s
important to identify who has control of the market on each
profile or time frame. It is also important to understand
that the longer the time frame, the stronger the Directional and
Control Bias. The Persistence Zone Document goes into complete
detail upon description, use of, and theory as it applies to the
Persistence Zone or PZ for short
Click on icons below to view ZoneTrader information:
ZoneTrader Videos
ZoneTrader Charts |
