Long Term Trading System (aka IRA System)

In this post I'd like to present a basic mechanical trading system for Long Term positions suitable for EOD or weekend traders: "Trend_LT". This particular system is intended for daily or weekly time frames and is based on PPO (or MACD). The system uses the inclination or declination of the PPO-/MACD-signal line as a proxy for the LT direction of the trend. The system also has a build in filter to prevent going short during counter trend corrections in a LT uptrend.

The "Trend_LT" system encompasses three possible positions:
- long, i.e. a position in the eft SPY;
- short, i.e. a position in the eft SH or perhaps even better: HDGE;
- neutral, because cash is position too!

The rules of this system are short and simple:
1. Long when EMA5 of (EMA13 - EMA55) is rising.
2. Short when EMA5 of (EMA13 - EMA55) is falling and price(=close) < SMA89.
    So no shorts when price >= SMA89.
3. Use the extreme point rule for entry/exit stops to minimize whipsawing.

A chart of the system showing some 1,000 trading days on the SPX:

A chart of the system with 1,000 weeks of SPX depicted:

As always the thinkscript code for the chart study and the lower pane indicator are available in the comment section for copy/paste into TOS. For free of course ;)