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Analysis written in a straightforward way so that everyone understands.
only a small few who get it consistantly correct and you are certainly
for putting this all together and sharing! BHW
Stuff! Kenny has shown time and time again the ability to show us direction in
these markets. Khalsa
Kenny, I appreciate your insight and analysis. You make sense of what I can rarely see.
Thanks for sharing. Gene
Took a gold short at 1240
just closed at 1203 :-)))))))))))))))))) ........ top call!! Gekko
System: Jeffrey Tennant
Change the way
you trade the S&P 500 Index
The Jeffrey Tennant Interview - Author of The
Mejt System: A New Tool for Day Trading the S&P
500 Index talks to Kenny of www.tradersdaytrading.com
about his new
book and tells us a bit more about the Mejt trading system.
Hello Jeff and welcome. First of all, please tell us a bit about
yourself and your trading history.
I am a private investor from
Long Grove, Illinois (a Chicago
suburb) and I have been interested in technical analysis of the stock
market since 1979. I have done both long term investing (mostly when I
was younger) and short term trading (more so now that I am older.)
How long have you been trading/investing and how did you get
interested in it?
My father and mother talked
stocks at the dinner table from the
time I was a small child. I considered it a normal part of life and was
taken a bit aback when I first found out that other families talked
about other things, like sports.
Congratulations on the publication of your new book Mejt System:
A New Tool for Day Trading the S&P 500 Index. How did you
discover the Mejt System and why did you decide to write the book?
I knew that other traders
whom I respected tended to make
predictions at the same time every morning. I decided to look at price
action during those times to see if I could figure out their system.
Instead, I came up with a different system,The Mejt System, in which it
was a different time of day that was the most important.
come up with a system for trading the morning, I decided to see
if a similar pattern was present in the afternoon. Fortunately, it was.
have investigated a number of proprietary technical indicators in my
life and most of them aren't really helpful. The mejt system was one of
those rare instances in which my first guess was right on.
Jeff, tell us a bit more about the Mejt system, Besides the
S&P500, what other markets is it suitable for trading, what
indicators is it based on, does it give precise signals and targets and
do we still need to apply stop losses?
The Mejt system assumes that
price action during certain times of
the day can help one predict what happens in the future. I cannot say
why it works only with the S&P 500 or why it works at all.
However, I believe it works because big money tends to make its moves
at a consistent number of minutes after the open and at a consistent
number of minutes after lunch.
system identifies which moves have staying power and which do not.
It identifies support and resistance levels which I cannot duplicate
using more conventional forms of analysis. It makes sense of afternoon
trading, which has a reputation for being unpredictable.
How easy is the system to learn, is it suitable for a beginner
trader, or is there a certain amount of interpretation and skill
required to implement it successfully?
I think the principle is
fairly simple. I would be surprised if
anyone took very long to learn some of the useful parts of the system.
It might take a bit of practice to recall all the rules, but one need
not use all the rules to improve ones trading.
How successful is the Mejt trading System?
The system has a very high
success rate. The failures tend to be
bunched together during brief periods of time. These times occur during
major changes in trend or during strong impulsive moves. Other than
that, the signals usually play out within days at most.
some failed targets print much later. There is support or
resistance at those levels which amaze me even now, since the signal
may have been given much earlier.
What is the systems success rate and how did you back test it?
I have a strong background
in statistics, so I can tell you that
most people misapply backtesting. I have been to any number of
investment conventions in which people demonstrate a system which has
been backtested for two years or so. What they do not tell you is that
it is always possible to devise a system which works when tested on the
data from which it was derived.
proper way to backtest is to take ones conclusions and apply them
to a different set of data. And that is where most trading systems fall
apart. A notable example was the Dogs of the Dow strategy. I believe
billions of dollars were invested according to its principles, even
though it never had been used in real time. I was not surprised that it
mejt system has generated over 3000 signals in real time since I
began keeping track in fall 2005. There are about 20 failures, most of
which tend to be clustered together (and which one can consider signals
in themselves since they identify changes in trend or strong impulsive
90% of the time a target will print in its preferred time frame.
Please note that not every signal is tradable and that the system does
not give precise entries and exits. It gives price targets and
the price targets will print over 99% of the time, although
not always as soon as one would like them to.
What can we learn from your book?
One of the main advantages
of the Mejt system is that it keeps
one out of bad trades. One can tell immediately if a move has staying
power (justifying jumping on board) or not (justifying looking for a
fade). Preventing losses is just as important as accumulating gains, in
thank you for talking to us about your book and the Mejt trading
there anywhere that readers can see the Mejt system in action in live
Yes, I post some signals
intraday in the Traders
Forums where I am
more than happy to answer any queries, and to help
any readers of my book fully understand how
to apply the Mejt system