Commando Trading Software Executive Summary

Transcription

1 Commando Trading Software Executive Summary Commando trading software combines the latest advances in neural pattern recognition technology with our proven trading methodology to make trading much more simple, effective, and rewarding. The product of over 3,200 hours of research and development, our software operates seamlessly with TradeStation Technologies charting platforms. In this summary, you ll learn about Commando-II, our flagship trading system Commando Universal Indicator, a lower-cost, entry-level program Commando MoneyLines, a real-time floor pivot projector, and Commando Filter Set, custom market filters. Along the way, we ll also introduce our Optimum Trailing Stop exit strategy, which can radically improve your results in virtually any market, and other key features you find only in Commando s world-class software. Here is how this Summary is organized: Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Commando-II Trading System Commando Universal Indicator Commando MoneyLines Commando Filter Set Evaluating Commando's Performance Commando Pricing and Ordering Information Commando Risk Disclosure We'll be happy to answer any questions you may have. We trade using Commando from 9:30 AM to 4:15 PM Eastern time, and answer questions about Commando (and any other trading topics you might be interested in) in the afternoons and evenings by or fax. Please feel free to contact us at "Info@CommandoTrader.com" any time you have a question. Thank you again for your interest in Commando. Sincerely, The Commando Systems Team (800) Customer Service (480) Technical Support (480) Fax Commando and Commando Universal Indicator are Trademarks of KNR International, LLC TradeStation, SuperCharts, ProSuite-2000i are Registered Trademarks of TradeStation Technologies, Inc. All contents of this Summary 2001 KNR International, LLC All Rights Reserved

2 Section 1 Commando-II Trading System Investors are being drawn to stock and commodity futures trading in increasing numbers, a result of industry education efforts and rapid advances in Internet trading technology. Novices and veteran traders alike are seeking ways to eliminate as much guesswork, emotion, and stress as possible from their trading decisions. Commando Trading Systems has responded to this need with the latest in our series of powerful stock and commodity trading tools, the Commando-II Trading System. The result is a remarkable system that provides profitable, explicit entry and exit signals in a variety of markets for intra-day and longer-term trading. Commando-II calculates concise exits according to our Optimum Trailing Stop process or preset profit target strategies, automatically updates open orders, and includes user inputs for testing your own ideas for market filters. The system is ideal for day traders AND longer-term position traders. It can be used with any time interval from less than one minute to over 60 minute intra-day bars for day trading, to daily or even weekly bars for position trading. This example shows the intra-day E-mini S&P contract. Commando is effective regardless of market direction. In this example, the system bought at and exited at early in the session. Later, it took at short position at and exited 30 minutes later at The Optimum Trailing Stop capability maximized Commando s profit in these two trades while minimizing risk while the positions were open. The System allows the trader to automatically monitor many markets simultaneously and to be alerted when trading signals occur in any of them. When a signal occurs, an alert (both visual and audible) is produced and a specific color-coded buy or sell signal is displayed on the screen. Guesswork and uncertainty are virtually eliminated. Commando-II operates seamlessly with TradeStation, SuperCharts, and ProSuite charting and analysis systems by TradeStation Technologies, Inc. One of these platforms is required in order to use Commando-II. The Commando-II Trading System combines our proven trading rules with easy userselectable inputs, on-screen messages and alerts of developing signals. These allow the user to easily tailor the System to his or her own trading style and risk profile.

3 Perhaps the most important feature of the Commando-II System is its ability to give absolutely clear, concise entry and exit orders. This is particularly critical in day-trading, when every second counts. Commando displays entry signals directly on-screen. A Buy (Long entry) signal is shown as a blue trend line with the entry price adjacent to it. If this signal pops up on our screen, we ll go long at if the market breaks through our buy stop at that price. Sell (short entry) signals are shown as red trend lines with the entry price adjacent to it. In this case, we ll go short at if the market breaks through our sell stop. A Real-Time Example Let s take a look at how Commando-II identifies and tracks each trade, directing the trader each step of the way.. In this example using 5-minute price bars, we ll take a long position in the S&P index contract, but the process is identical in any other security or futures contract. The Expert Commentary feature gives the trader exact instructions to perform for the duration of the trade. This buy signal is generated on the close of the third bar in this formation. The Expert Commentary window updates immediately upon the close of each bar. Here it tells the trader where to place the protective stop (MMS) and initial profit exit according to the Optimum Trailing Stop calculation within the system.

4 The market has subsequently moved through our buy stop at The Expert Commentary window now shows the long position in progress. Using the Optimum Trailing Stop process, the system has recalculated the exit order, directing the trader to place the new trailing stop at Now long from Prices continue in favor of the trade. The Optimum Trailing Stop process cancels the open trailing stop at and replaces it with a new stop at The position is closed out on the following bar (#3) at The exit order name is displayed on-screen in ProSuite-2000i, and the exit order name and exit price are reported in the System Tracking Center (STCC) on all Omega Research platforms. When the position is closed the system is now flat the market, and Commando immediately returns to monitoring mode.

5 Longer-term Position Trading with Commando-II Commando-II is equally effective using end-of-day data, and is designed to be robust across many markets. Here are two additional examples in Gold and Corn contracts. This Corn contract shows a short entry at , exiting about a month later at In this chart, we have a second short entry at , so that position is still open. While this is not a typical trade (most trades DO NOT end up this well), it is an excellent example of Commando s ability to identify and capture profits regardless of market direction. Here the system took a long position at , exiting nine days later at Later, the system sold short at This position was still open when this chart was made. Commando-II also includes user inputs for testing your own ideas for market filters or other EasyLanguage functions. Your choice of any of the Commando Traders' Handbooks (Day Trader, Position Trader, or Stock Trader) is included in the system price. These Handbooks, originally designed for our traders who do not have TradeStation Technologies charting platforms, contain a wealth of information and are an invaluable resource for our Commando-II traders as well.

6 Section 2 Commando Universal Indicator The Commando Universal Indicator is an advanced trading tool based on our breakthrough pattern recognition technology. The Indicator operates with SuperCharts, TradeStation, or ProSuite- 2000i by TradeStation Technologies, Inc. Like Commando-II, the Universal Indicator uses our Neural Pattern Recognition logic to monitor each market and generate new entry orders whenever high-probability-of-profit trading opportunities occur. As illustrated in the chart below, the Universal Indicator is equally effective during downtrends and uptrends. The Indicator is an economical alternative for new traders or those who do not require extensive back testing capability. If you upgrade to Commando-II, your investment in the Universal Indicator is credited to Commando-II s purchase price The Indicator generates entry signals only, leaving the exits to be calculated easily and mechanically by the trader. The Universal Indicator can be used with any charting interval from a few ticks to 60 minute intra-day bars to daily bars for position trading. It can generate trading signals on essentially any futures contract or stock that is traded in sufficient volume to produce orderly price charts. The power of this indicator on the TradeStation Technologies SuperCharts, TradeStation, and ProSuite-2000i platforms allows a trader to automatically monitor many markets simultaneously and to be alerted when trading signals occur in any of them. The Commando Universal Indicator combines our proven trading rules with easy user-selectable inputs, on-screen messages and alerts of developing signals. These user inputs allow you to tailor the Indicator to your own trading style

7 When a signal occurs, an alert (both visual and audible) is produced and a specific colorcoded buy or sell signal is displayed on the screen The Commando Universal Indicator operates seamlessly with TradeStation Technologies SuperCharts, TradeStation, and ProSuite-2000i platforms. This example shows four futures contracts, but the Indicator is equally adapted to stock trading on issues form penny stocks to Dow Jones blue chips. The Universal Indicator is an excellent entry-level alternative if you do not expect to do a lot of back testing, and it is less than 40% of the cost of Commando-II. As a special offer to Commando traders who order the Universal Indicator, we credit the entire cost toward purchase of the Commando-II Trading System if you decide to upgrade later.

8 Section 3: Commando MoneyLines Projector Commando MoneyLines is an innovative indicator that dynamically updates and projects Floor and Range Pivot support and resistance levels ahead of the market, using both traditional and proprietary algorithms. MoneyLines takes long-established principles of market behavior and creates a unique and powerful way to effectively predict support and resistance levels to be expected during a trading session. Most importantly, MoneyLines automatically updates and projects these crucial levels during real time trading. Powerful, yet exceptionally easy to use, MoneyLines is a simple and effective tool for professionals and novice traders alike! Professional floor traders have long recognized the importance of support, resistance, and pivot points in the market. With this powerful indicator, you can see exactly what the Pros see in real time. How MoneyLines works Commando MoneyLines are dynamically drawn reference levels based on market activity. They are called MoneyLines because they are often literally "where the money is". Price behavior around MoneyLines tells you a lot about what the market is doing now and what it is trying to do next. Generally, the more lines, the closer together - the stronger is the support or resistance. For instance, there may be huge orders waiting to buy into yesterday's low, or sell the high, or using similar strategies with the most recent swing points in the market. Orders at these points create "lines" of support and resistance because demand exceeds supply or vice-versa. During real-time trading, significant support and resistance lines are plotted automatically when current prices approach those levels. A complete Expert Commentary facility shows all relevant lines for easy reference. Swing Highs and Lows reveal areas of resistance and support because these price formations demonstrate areas of excesses of demand over supply or visa-versa. The higher the swing "strength", the more likely this is to be so. Professional floor traders know this... now you can too, REAL TIME!

9 Much more than just a support and resistance indicator, MoneyLines gives you a CRITICAL EDGE over other traders. MoneyLines performs the following real-time tasks: identifies swing highs, lows, and expected price ranges forecasts price behavior during the session following a significant opening gap, calculates and projects floor pivots and range pivots and projects all of these AHEAD OF THE MARKET! For instance, if the market makes a large gap on the open, then the Prior Day Close is often both a target and an area of support (gap up) or resistance (gap down). On any given day market has a high probability of reaching the Prior Day Close at some point during the trading day and it is often a useful reference point throughout the day. Experienced traders have long understood the usefulness of floor pivots, and floor traders have traditionally kept these numbers jotted down on their trading cards. The big advantage in knowing these pivot levels is that they often form the basis of future price formations, in effect giving us a roadmap to the day session s activity. Commando MoneyLines Range Pivots are an expansion of the floor pivot concept. While both indicators calculate potential areas of futures support and resistance, Commando s Range Pivots are calculated real-time rather than using historical data. Using both types of Pivots together gives you a decisive edge by looking for clusters of projected levels. MoneyLines makes it easy to calculate, organize, and respond to these projections. Floor Pivots and Range Pivots are useful for several reasons. They actually project areas of support and resistance into the future, a feature found in few other indicators. They dynamically adjust to market volatility Many important market participants (floor traders and others) watch them. The following chart shows MoneyLines in a day session. Notice how the market seek new levels throughout the session. After an opening gap, the market is relatively directionless.

10 Attempts to the downside fail, but a move to the upside is strong enough to fuel a 10-point rally. After the run-up, a new resistance level is encountered. The Swing High point becomes the new level for bullish traders to try to break through. As the market plods sideways through mid-session, the Range Pivots identify a new support level, bounding the market between Swing High resistance and Range Pivot support. Later in the session, an imbalance occurs again as new buyers enter the market whom are willing to buy at or above the current Swing High levels. This leads to a brief rally, after which the original Swing High resistance becomes the new support level. Chart courtesy of TradeStation Technologies, Inc. Meanwhile, a new Range Pivot calculated by MoneyLines becomes the new resistance level. Toward the end of the session, the bulls once again prevail and prices rally briefly once more. MoneyLines has already calculated the Range Pivot R2 that becomes the resistance level going into the session s close. MoneyLines can easily pay for itself in one trade! Please visit our web site at for more information.

11 Section 4: Commando Filter Set The Commando Filter Set includes three EasyLanguage filters for the Commando-II system, Commando Universal Indicator and many other EasyLanguage programs. They are easy to use and can save a great deal of time, effort, and guesswork in determining if important, predictive price behavior is present in the market. Each filter monitors current market activity (either real-time or end-of-day) and produces an "OK2TRADE" signal when and if its requirements are met, as described below. Gap Open (OpenGapOK) Filter This filter monitors the market for opening gaps larger than a specified size. Gap sizes may be set in terms of a percentage of the preceding day's range, or as an absolute number of points. Without the filter, these early short entry signals occur after a substantial opening gap. When an opening gap exceeds the percentage of the prior day's range or the specified number of points, then no entry signals will occur until the current intra-day bar exceeds the specified number of bars to be excluded. With the filter ON, the early short entry signals do not occur. ADX (COM_ADXfilter) Filter COM_ADXfilter is a proprietary ADX-based filter, which monitors the strength and quality of trending behavior in the markets. When the filter is OFF, more signals can occur in flat markets, as in this example.

12 Since Commando is a trendsensing system, using the COM_ADXfilter tends to reduce trading frequency in sideways, directionless markets. With the filter ON, fewer signals occur in flattening conditions. Range To Risk (Range OK) Filter This filter's objective is to reduce trade signal frequency when consecutive bars' ranges exceed the trader's risk profile. For instance, if a trader in the S&P risks two full points ($500) per trade and a sideways sequence of bars have ranges exceeding two full points, the probability of entering a trade and then being immediately stopped out increases substantially. The Range OK filter seeks to minimize trade frequency under these conditions. When price volatility expands beyond a user-definable threshold, the Range OK filter returns an OK2TRADE=FALSE signal to the Commando-II system or Commando Universal Indicator. Note that there is no entry signal when the. Range OK filter is on. The Commando Filter Set works seamlessly with the Commando-II Trading System and the Commando Universal Indicator, but it is also highly effective with other programs written in TradeStation Technologies EasyLanguage. Any EasyLanguage program with an input for True/False functions will work with the Commando Filter Set.

13 Section 5 Evaluating Commando s Performance The CommandoTrader web site is updated bi-weekly with the latest performance in a wide variety of markets. You re invited to visit the following pages at your convenience: Futures Day Trading: Futures Position Trading: Stock Trading: Commando Performance Guarantee We believe that a trader must understand how a trading system works to have the confidence to use it consistently, even on losing days. To ensure that the Commando-II Trading System and/or the Commando Universal Indicator fit your own trading style, we offer the following risk-free evaluation process. Try the Commando Day Trader Traders', Position Trader s, or Stock Trader s Handbooks to see how well our trading methodology complements your own style. Your choice of these Handbooks is included with Commando-II and the Universal Indicator, and all Commando Trader's Handbooks are backed by our 30 day performance guarantee. We'll work with you side-by-side to help you become a more effective trader. Evidence of real or paper-trading results is required to qualify for refund. This means that if you provide evidence (a list of trades taken in real or paper trading) of Commando not being profitable enough to pay for itself in 30 days or less, we'll cheerfully refund your license fee. Once you're convinced, Commando-II is ready to take you to the next level! Omega Research SuperCharts, TradeStation, and ProSuite-2000i users may also examine the Commando Demonstration Module as part of their evaluation.

14 SECTION 6 COMMANDO PRICING AND ORDERING INFORMATION Please check our web site for current discounts on selected Commando products. You may order by , Fax, regular mail, or on-line at: Name: Price Code Address: Apt./Ste. City: State/Prov. Postal Code: Country Telephone Circle One: Check Visa MasterCard American Express Account No.: Expiration Date: Signature: Telephone number and signature required for Credit Card orders. Commando-II Trading System $2, Disk + User s Guide PLUS (PLEASE SELECT ONE) CII/DT COMMANDO DAY TRADER S HANDBOOK CII/PT COMMANDO POSITION TRADER S HDBK CII/ST COMMANDO STOCK TRADER S HANDBOOK Commando Universal Indicator $1, Disk + User s Guide PLUS: (PLEASE SELECT ONE) IND/DT COMMANDO DAY TRADER S HANDBOOK IND/PT COMMANDO POSITION TRADER S HDBK IND/ST COMMANDO STOCK TRADER S HANDBOOK CML Commando MoneyLines Indicator (Disk + User s Guide) CFS Commando Filter Set (Disk + User s Guide) $ $89.00 Sales Tax(AZ residents add 5.75%) Shipping and Handling (US Orders $21.95) PLEASE RETURN THE COMPLETED FORM TO: Total Order KNR International, LLC Support@CommandoTrader.com E. Tierra Drive (800) Customer Service Scottsdale, AZ USA (480) Technical Support (480) Fax

15 SECTION 7 COMMANDO TRADER RISK DISCLOSURE Trading is Risky Business Yes, it is possible to make excellent returns in commodity or securities trading, but let's talk about real risk for a moment. This is particularly important for newcomers to trading. Futures and stock trading is risky. "Risk capital" must be exactly that, money you can place at risk without injuring your personal financial condition if the money is lost. Do not trade with funds you cannot afford to lose. Just as importantly, recognize that if you have insufficient risk capital to enter trades when new signals occur, you are virtually certain to miss the winning trades needed to make a long term profit. The disclaimer below, required of all registered Commodity Trading Advisors (CTAs) describes some of the limitations in translating either actual or hypothetical performance results into reasonable expectations for individual traders. Regardless of past actual or hypothetical results, the probability that your results will be the same as anyone else's in actual practice is minimal. There are too many variables in the markets to accurately forecast future results for any system or any trader. For example, even two traders who take identical entry signals simultaneously are likely to have different outcomes, depending on commissions, slippage, and other factors beyond their control. CFTC DISCLAIMER "HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.