Excuse the interruption for the since the last update, but I was away from home for a few days and had some other business to attend to...

The RMO system is truly a winner. I don't know if it has been more a function of the overall market or what, but the RMO Buy/Sell signals have been fantastic. My opinion is that is works better on Daily bars and therefore would serve as an excellent end-of-day trading methodology for anyone looking for longer term trades. Intraday, it tends to get chopped up a bit. I am using it on an end-of -day basis and have fantastic results. The results I am achieving are much better than what I would have done on my own largely because it keeps you in the trade for a longer period of time. Whereas many other systems would have been chopped up.

I have also been watching it with the FOREX markets, which have been exciting lately due to the Dollar/Euro/Yen situation lately. The RMO correctly detected those moves and gave me a warning ahead of time. I do not trade the FOREX markets, but I could certainly see doing that in the future.

To walk you through some of the strategies I am using:

One of my favorite trades is to look for stocks under $10 that are moving up. I set up a scan for all stocks on NYSE and NASDAQ that are under $10. The RMO Buy signals pick up many of these stocks BEFORE they explode to the upside. In some cases, weeks before.

On bigger stocks, I scan for Buys/Sells on the S&P 500, NASDAQ 100, Dow 30, Dow Transports, XOI, XBD, Dow Utilities. These are the sectors/groups that are most heavily traded. Again, I have taken many excellent signals and been profitable with them. I have taken a few hits I will admit, but I am still up by a sizeable amount. Keep logical stops with these stocks because they are subject to extreme volatilty and gaps which can ruin a trade pretty quickly. Mutual Finds and Hedge Funds manipulate these stocks in mysterious ways. These stocks are also more vulnerable to "program trading" which makes them more volatile than the under $10 crowd. Cheaper stocks are less well known and are not followed as much by Wall Street analysts and are therefore less susceptible to being crushed on any given day. Many of them also trade independently of the overall market, making them a bit less scary. Just my two cents.

Also, as a note. I only place a trade when the trade has been confirmed on a closing basis. So, if I get a buy signal, I will only place the trade just before the market closes if the stock is definately going to close above the recommended price by the RMO system. The opposite for shorts of course. Don't worry about the trigger prices.

I also follow industry groups. So, if I see an Industry or group that I am interested in for whatever reason, then I will scan the stocks in that group only to look for Buying opportunities.

I am using a Stop-Loss from Adaptick known as the IntelliStop. This came with their ICE program. Therefore the system I am using is totally mechanical and not subject to my (frequently wrong) opinion.

I use end-of-day data from PremiumData.net. Fantastic program. Highly recommend it. Allows me to scan groups easily and maintain 100% accurate lists of stocks because it is updated every night.

Till next time,

--Predator

Happy Trading!

Dear Predator,

Any idea about hit/success rate and average win/average loss ratio of the System? In the affirmative, are trades entered at the close, next day open or next day limit order? I have no intention of upgrading to V.10 and find the addition of a trading system to a software update a rather dubious marketing ploy aimed at offseting the paucity of improvements introduced by Reuters.

Thanks and regards,

Maurizio

So how does RMO work?  What's the theory behind it, and how does it determine its output?

It's not just another closed-up blackbox "magic system", is it?  Because those always work just great.  Until they don't.

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When you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed. - Ayn Rand

If you'd like to discuss the inner workings further I'd feel better if this was done in the Special Interest/Plugin section rather than inside someone's trading diary, as this is not really the point of this thread.  I have moved the posts to this forum (Sort of) but there seems to be an issue on the permission side as to moving them all into one post.  I should have this corrected Monday.

Hay Predator,

Nice diary here, can you make us a new update, it has been a while already, I would like to know what happened next.

Thanks and best regards,

Bulli