Invivo.Stops Indicator for TradeStation 8.x OR eSignal 10

Aspiring traders deserve so much more than the hype found on the internet. Vendors will do anything, say anything to exploit your hopes and dreams, just to get the sale.

The trader education/trading system landscape is nothing more than a market for lemons. Think about it:

I have never seen a single fund manager or industry trader use these products. The professionals I work with continually invest in research and development that sharpens their competitive edge. They know there is no substitute for quantitative know-how and experience in the trenches.

The Trading Program

William Eckhardt once said that trading is not rocket science. Yet for most, success is elusive because one or more of the critical elements is missing:

  1. Identify appropriate trading candidates;
  2. Trade a basket of the qualified candidates;
  3. Implement position sizing to limit exposure and risk;
  4. Follow the buy and sell signals;
  5. Avoid countertrend trading; and most of all,
  6. DO NOT USE INSANE LEVERAGE.

Yes, success starts with a signal, but it’s just the beginning. There are a lot of moving parts, and losing all your money is guaranteed when the pieces are not in place. Even if I gave away my system for free, it would be useless. It’s just a matter of time before disaster strikes.

Do yourself a favor. Before you trade, read Own The Zone. It’s free. If you really want to know what I know, the entire braindump is contained in the award-winning The Ultimate Trading Course.

If you want financial entertainment, I won’t stop you. If you are trading Forex at 1:100 or can barely make intraday margin for e-mini futures, pray for a miracle that you will succeed where hedge funds failed.

If you need something that actually works as part of a well-balanced trading program, use a good software platform and see what you can learn by playing with InVivo.Stops for TradeStation 8.x or eSignal 10.

Lifetime License for TradeStation 8.x OR eSignal 10

InVivo.Stops for TradeStation** is a must-have for any trader. This indicator can be applied to tick, volume, intraday and daily charts. It is available for individual traders only.

**Requires a valid subscription to the TradeStation platform. TradeStation is now FREE for most active traders!

Stops cannot be eyeballed. A trader that places stops arbitrarily or uses stops calculated incorrectly is destined to always exit too early and miss the home run, or exit too late after a change of trend.

Many systematic traders spend the majority of their time searching for good places to initiate. It just seems to be part of human nature to focus on the most hopeful point of the trading cycle. Our research indicated that liquidations are vastly more important than initiations. If you initiate purely randomly, you do surprisingly well with a good liquidation criterion. — William Eckhardt

Stops can be used in two ways:

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They establish the appropriate price to exit a trade.

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They can also establish the appropriate price to enter a trade.

InVivo.Stops Provide The Definitive Edge

If you make a bad trade and you have money management you are really not in much trouble. However, if you miss a good trade there is nowhere to turn. If you miss good trades with any regularity you’re finished. — William Eckhardt

Stops must be placed strategically, yet nearly all commercially available stops have serious flaws.

In Engineering Better Bollinger Bands and Thoughts on the Kase Dev-Stop, I demonstrated that InVivo.Stops accurately reflect volatility and range. This is a must, because we never, ever place stops based on what we can afford to lose. Stops must be placed where they ought to be, and we reduce our trading size as required to manage risk to the account. This is our definitive edge.

Used alone, InVivo.Stops is known as a stop and reverse system, that is, it is always in the market long or short. In practice, traders require additional conditions (such as a time filter, trend filter, a moving average filter, etc.) and impose restrictions to qualify trades. In addition, they must also decide on the amount of leverage to use and calculate the position size based on the foregoing.

There may be many moving parts, but make no mistake, the stop is the backbone of any trading system or method. In fact, InVivo.Stops is the heart of my own trading system.

Using InVivo.Stops

InVivo stops are engineered to reflect actual volatility and range, providing users with a real edge over other so-called volatility-based indicators or bands.

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Use InVivo.Stops according to the following two rules:

While the math behind InVivo.Stops is complex, using this indicator is easy as 1-2-3. InVivo stops shows you the exactly where your stop is at all times. The stops can also be used to buy and sell options, particularly our “Plan B” bull call or bear put spreads.

  1. Options: Bull Call Spread
  2. Options: Bear Put Spread

Indicator Inputs for _InVivo.Stops for TradeStation

invivostops_ts.gifDEFAULT: UniversalStop = true
The “tightness” of the stops is based on the StopFactor setting. The default is set to dynamically calculate an appropriate StopFactor between 1.0 and 1.5.

If you wish to set the StopFactor yourself to accommodate your style of trading, use the Inputs tab to enter UniversalStop = false along with the desired value for the StopFactor. Investigate a range of settings between 1 and 1.5 at 0.1 increments. StopFactor settings under 1 are insufficient while settings larger than 1.5 are unnecessary.

invivostops-alert.gifIn directional trading, it is perhaps not possible to tighten the initial stop or trailing stop beyond what volatility dictates. Time and again, we have seen that a wide range of trading “problems” tend to be resolved by trading high-priced, high-volatility issues in larger time frames while simultaneously reducing trade size/leverage with the use of reasonable stops.

DEFAULT: PctToStopAlert = 1.01

The alert is set to ring when price is within 1.01% of the stop. Use the Alerts tab to set your own preferences.

TrendFilter should always be set to zero. No adjustment is necessary.