Giant footprints

Chuck LeBeau

Chuck LeBeau

Chuck LeBeau, author of a few trading books and a trader I respect very much, sent this promo video of his MarketClub, which I find quite instructive and entertaining…

He describes step by step his "Great Footprints" trading method; which in essence looks at the quarterly, monthly, weekly and daily charts of a security to confirm its trend.

Here’s an example of the method applied to CL0609 crude oil:

Clb_cl060720_2

The above daily chart shows the last 11 days on an uptrend,

Clb_cl060720w
so does this weekly chart,

Clb_cl060720m
the monthly chart also shows a 6 month uptrend,

Clb_cl060720q
and so does the quarterly chart.

With all four charts showing an uptrend, he concludes that inequivocably the trend merits holding a long position in CL0609.

Unfortunately, Chuck does not explain how he determines the trend of the underlying for each time frame. But, I’ll posit that the trend can be found by a very simple rule: a failure of the last bar by more than 1/3 of the ATR(2).

In other words, we will buy (sell) when the last bar’s high (low) is broken to the upside (downside) by more than a 33% of the true average of the last 2 bars.

Of course, 33% is arbitrary and can be improved by testing for other values…

In the following CL0609 weekly chart, I’ve marked the breakout levels for the above mentioned 33% rule;

they are shown as for a short trigger and for a long one:

Clb_cl060720wwlevels

I like a lot the overall combination of trading rules in this presentation.
Hope you can take good advantage of its outstanding traits.