Impetus

System Name: Impetus

System Type: Day trade, trend-following system

Contracts: e-mini Russell

Starting Capital: $6,500 (recommended)

Cost: $50 per month per e-mini contract

Description:

Impetus has only one optimizable parameter and is based on a simple equation: power+direction=trend. A single unique calculation determines the power of the market--its tendency to move decisively--and the direction of the market. Together these forces create a tradable trend. Impetus is able to capitalize on being in the market a small fraction of the time (less than 1%), trading only the latter part of the ER day session and averaging two trades per week. The system enters both on qualified breakouts and retracements. All trades are entered using stops, and the initial risk usually varies from $200-$500.

Although it was originally developed to trade ES in January of 2003, trading was shifted to ER in late November, 2003, because of better volatility, ranges, and trendiness. This is particularly notable, since the Russell is a completely out-of-sample market on which Impetus had not been tested until months after its release.

Because of its low drawdowns, Impetus is perfect for small accounts or as an addition to mid- and full-size accounts.

For real-time performance, click here to access an Excel file that compiles and charts trading account fills.