I’m keeping a record of the LIVE Called Out SPY System Trades in a  table in the Trades tab section. Also following the big correction from late Feb - Mar 24th 2020 I made some additional adjustments to the systems, which I believe further mitigates risk and gives the systems more opportunities to exit after a reversion to mean move.  For ETF Trades I do 10K for each entry with 1st entry as SPY, 2nd as SSO, and 3rd as UPRO.  For options I typically buy options with an expiration about 2 months out. For first entry trades I target a delta of 0.6, for 2nd entries I target a delta of 0.5, and for rare 3rd entries I target an even lower delta below 0.5. The thought process there is that 2nd and 3rd entry options have a higher probability and thus I I can buy options with lower delta to give more leverage.  Also PLEASE be aware that SPY options trade until 4:15 so you can buy them after the cash market close! Therefore you have 15 min to enter these after the market close, many folks are unaware of this as all other options cannot be traded in after hrs market. 

How Are Trades Called Out: 

Whenever one of the 21 sub systems takes a new trade, that trade is taken at the close of the day. Also most of the system trades exit at the close of the day as well, though a few of them exit on the next day's open. As explained above the systems take their entries as ETF's and Options.  I notify you by sending you an email whenever one or more of these sub systems take a trade. Most of the time I try to send an early notification email in the middle of the day email to alert you that there could be a system trade, and I'll then confirm that trade near the close as the systems technically do not confirm until the close as they are based on daily systems.  I also post this information on the Community so that's a good place to check as well. As far as entering the trades, realize the ETF's like SPY etc trade until 8 pm EST, therefore you have plenty of time to enter these trades in after hrs if you miss the close. Also SPY options trade for an additional 15 min after the close so even if you miss the close you have an extra 15 min to enter.

Brief Description:

The SPY Pro  systems are a collection of 21 sub systems most of them are reversion to mean meaning that they will attempt to buy oversold pullbacks, or short oversold rallies in downtrends. They are based off past statistics and  look for high probability trade situations based off rare statistical  occurrences. For example let's say the market was very oversold and very far below it's 9 day EMA, you have a rubber band situation there where price is due for a reversion to the mean and test or close back over its 9 EMA.  That's what the systems do, they look for areas where the market is too stretched and due for a mean reversion, then get back out of the market once that price reversion occurs.  The systems are in cash most of the time, think of them like a tiger stalking in the bushes for his prey, he waits for the right opportunity and then pounces, that's what these systems do.   A recent trade was a short triggered from the Exhaustion  Short sub system, which was taken on 9/2/20, and the market sold off strongly starting the next day.   The name of that sub  system itself is pretty descriptive of what that sub system is looking  for i.e. exhaustion short, it sensed correctly that the market has been  trading up for too many days in a row and was due for a correction.   That exhaustion condition has only occurred about 20 times in the last  25 years with 93% of them producing winning trades or pullbacks.   Remember these sub  systems simply look for trade opportunities whenever the market gets  stretched one way or another, it then looks to close the trades out  after that mean reversion occurs.  These sub systems are completely  opposite to the KISS SPX 401K which is a trending system that tries to  stay long all the time in uptrends. These systems are mostly in cash,  and look for trade opportunities here and there.

here's a description of some of the sub systems below

Longs: 

1.  Trend long - only buys pullbacks when prices are above long term MA's along with up sloping MA's, exits when certain indicators recycle

2.  QE Long - A reversion to mean trade similar to the Larry Conners RSI 2 reversion  to mean strategy, however uses a %R indicator instead.  Price must be  over the 200 day MA for longs and below for shorts.

3.  Pullback long trade - similar to the Trend Long but slightly different settings

4.  Very strong trend pullback Long - takes long trades only when price is moving up strongly and the 20 day MA is up sloping strong and RSI 3 oversold

5.  Bear Long - a special type long trade that only occurs in bear markets, very  stringent conditions and rare but very reliable. various filters built  in here to allow it to exit quickly if need to for a small bounce only,  or hold the trade for 1 - 2 months if conditions look ripe for a strong  move off the lows

6.  Exhaustion Long in bull market - opposite of the Exhaustion Short above, occurs when price is too  stretched oversold, however price is still in a bull market. Bull market is defined generally when price is above the 200 MA and it is in a  positive slope.  I have two versions of this, 1 and  

7.  Exhaustion Long in bear market - similar to the one above, but occurs in bear markets so price has to be stretched MUCH further oversold

8.  RSI 14 long off 40% - occurs in bull markets only, when 14 RSI V's off the 40% level

9.  RSI 14 oversold trade - RSI is very oversold long, various filters built in here to allow it to exit quickly if need to for a small bounce, or hold the trade for 1 - 2 months if conditions look ripe for a strong move off the lows

10.  Strap Long - a specialized Long trade that occurs when a fast stochastic gets  oversold but price remains above a short term MA like the 20 - 30 MA

11.  60 Stochastic Long off 50% - uses a 60 Length Stochastic, which is a trending Stochastic setting,  the condition occurs near the 50% level of the 60 length Stochastic.

12.  Breakout System - This is a NEW system that I developed in early 2017 that is non-reversion to mean. It is different than the other long  strategies in that it doesn't require a pullback in an uptrend to go  long, instead it buys strength or a breakout condition!  In very low  volatility markets like the one we've seen in 2017 that has had the  lowest volatility in 100 years, the market has had very shallow  pullbacks which were not deep enough for many of the reversion to mean  systems to catch - the breakout system can catch these trades. This  system addition is yet another diversification to the system.

Shorts: 

1.  QE Short - Like the one above, but for shorts, different filters etc

2.  Exhaustion Short #1 - this trade take short trades when the market is in a very strong  uptrend, but statistically is very very stretched such as over 22 days  above the 8 day MA and %R over 90%, exits on a quick pullback.  I have 2 versions of this, 1 and 2

3.   Exhaustion Short #2 - same methodology as above, however slightly different settings

4.  Hi, Mid, Low short - these are three type of short trades that occur primarily in bear markets when price gets overbought, I have 3 types of these

5.  60 Stochastic Short off 80% - uses a 60 Length Stochastic, which is a trending Stochastic setting,  the condition occurs near the 80% level of the 60 length Stochastic.

6.  60 Stochastic Short off 50% - same general logic as the one above, except this condition occurs near the 50% level on the 60 length Stochastic.

7.  34 Stochastic Short off 80% - same as trades above but uses a 34 length for Stochastic instead of 60 length

8.  60 DVDS Stochastic trade - similar trade to above, but uses a special normalized Stochastic indicator

9.  Strap Short - a specialized Short trade that occurs when a fast stochastic gets  overbought but price remains below a short term MA like the 20 - 30 MA

Images of the Systems:  

 Below I show three images. The top image shows all 12 of the long sub systems with arrows pointing to the system names. The second image shows all 9 of the short sub systems. 

The final image shows a simpler view where I combine 10 of the long systems onto one chart and all 9 of the short systems onto another chart. Most of these sub systems have little overlap, also this helps to reduce the number of trades and see a combined statistical effect.  Note I have the Trend/Pullback and CCI sub systems on their own charts.



Trade Status: – All systems back in cash

(remember that overlap between systems and multiple trades can active at any one  time). Also from time to time positions will receive cash dividends if  held through ex dividend dates which add to the profits.

Also remember SPY options trade up to 4:15 EST, you have 15 min after the cash market close to enter these unlike stock options which cannot be bought after 4:00

Frequently Asked Questions:

Note: Please take the time to thoroughly read the FAQ questions and answers below. The SPY Systems are a collection of 21 individual systems, which I like to call sub systems, however each system is its own system.  All of them are reversion to mean systems, except for the breakout system, and are based on past market statistics.   


Q: Can you tell me more about this collection of SPY systems?

A: The SPY Pro  systems are a collection of 21 sub systems most of them are reversion to mean meaning that they will attempt to buy oversold pullbacks, or short oversold rallies in downtrends. They are based off past statistics and  look for high probability trade situations based off rare statistical  occurrences. For example let's say the market was very oversold and very far below it's 9 day EMA, you have a rubber band situation there where price is due for a reversion to the mean and test or close back over its 9 EMA.  That's what the systems do, they look for areas where the market is too stretched and due for a mean reversion, then get back out of the market once that price reversion occurs.  The systems are in cash most of the time, think of them like a tiger stalking in the bushes for his prey, he waits for the right opportunity and then pounces, that's what these systems do.   A recent trade was a short triggered from the Exhaustion  Short sub system, which was taken on 9/2/20, and the market sold off strongly starting the next day.   The name of that sub  system itself is pretty descriptive of what that sub system is looking  for i.e. exhaustion short, it sensed correctly that the market has been  trading up for too many days in a row and was due for a correction.   That exhaustion condition has only occurred about 20 times in the last  25 years with 93% of them producing winning trades or pullbacks.   Remember these sub  systems simply look for trade opportunities whenever the market gets  stretched one way or another, it then looks to close the trades out  after that mean reversion occurs.  These sub systems are completely  opposite to the KISS SPX 401K which is a trending system that tries to  stay long all the time in uptrends. These systems are mostly in cash,  and look for trade opportunities here and there.

here's a description of each of the sub systems.  

Longs: 

1.  Trend long - only buys pullbacks when prices are above long term MA's along with up sloping MA's, exits when certain indicators recycle

2.  QE Long - A reversion to mean trade similar to the Larry Conners RSI 2 reversion  to mean strategy, however uses a %R indicator instead.  Price must be  over the 200 day MA for longs and below for shorts.

3.  Pullback long trade - similar to the Trend Long but slightly different settings

4.  Bear Long - a special type long trade that only occurs in bear markets, very  stringent conditions and rare but very reliable. various filters built  in here to allow it to exit quickly if need to for a small bounce only,  or hold the trade for 1 - 2 months if conditions look ripe for a strong  move off the lows

5.  Exhaustion Long in bull market - opposite of the Exhaustion Short above, occurs when price is too  stretched oversold, however price is still in a bull market. Bull market is defined generally when price is above the 200 MA and it is in a  positive slope.  I have two versions of this, 1 and  

6.  Exhaustion Long in bear market - similar to the one above, but occurs in bear markets so price has to be stretched MUCH further oversold

7.  RSI 14 long off 40% - occurs in bull markets only, when 14 RSI V's off the 40% level

8.  RSI 14 oversold trade - RSI is very oversold long, various filters built in here to allow it to exit quickly if need to for a small bounce, or hold the trade for 1 - 2 months if conditions look ripe for a strong move off the lows

9.  Strap Long - a specialized Long trade that occurs when a fast stochastic gets  oversold but price remains above a short term MA like the 20 - 30 MA

10.  60 Stochastic Long off 50% - uses a 60 Length Stochastic, which is a trending Stochastic setting,  the condition occurs near the 50% level of the 60 length Stochastic.

11.  Breakout System - This is a NEW system that I developed in early 2017 that is non-reversion to mean. It is different than the other long  strategies in that it doesn't require a pullback in an uptrend to go  long, instead it buys strength or a breakout condition!  In very low  volatility markets like the one we've seen in 2017 that has had the  lowest volatility in 100 years, the market has had very shallow  pullbacks which were not deep enough for many of the reversion to mean  systems to catch - the breakout system can catch these trades. This  system addition is yet another diversification to the system.

Shorts: 

1.  QE Short - Like the one above, but for shorts, different filters etc

2.  Exhaustion Short #1 - this trade take short trades when the market is in a very strong  uptrend, but statistically is very very stretched such as over 22 days  above the 8 day MA and %R over 90%, exits on a quick pullback.  I have 2 versions of this, 1 and 2

3.   Exhaustion Short #2 - same methodology as above, however slightly different settings

4.  Hi, Mid, Low short - these are three type of short trades that occur primarily in bear markets when price gets overbought, I have 3 types of these

5.  60 Stochastic Short off 80% - uses a 60 Length Stochastic, which is a trending Stochastic setting,  the condition occurs near the 80% level of the 60 length Stochastic.

6.  60 Stochastic Short off 50% - same general logic as the one above, except this condition occurs near the 50% level on the 60 length Stochastic.

7.  34 Stochastic Short off 80% - same as trades above but uses a 34 length for Stochastic instead of 60 length

8.  60 DVDS Stochastic trade - similar trade to above, but uses a special normalized Stochastic indicator

9.  Strap Short - a specialized Short trade that occurs when a fast stochastic gets  overbought but price remains below a short term MA like the 20 - 30 MA

- that's a list of most of the individual small systems, that all work individually, and together


Q: Why did you build a system using the SPY ETF?

A: Because SPY is the ETF for the S&P 500 and it is very liquid with very tight spreads and trades until 8 pm in after hrs market. The SPY ETF is also one of the cleanest representations of the S&P 500 cash and does not degrade. You of course are free to choose whatever S&P 500 related instrument you want.  Also systems remove some of the emotion, which can be one of the main pitfall for many traders.  In  addition, systems have a discipline, set rules and money management,  which many novice or newer traders lack. For the SPY system we trade the SPY, SH, SSO, SDS, UPRO, and SPXU ETF's, and of course SPY call and put options.


Q: What are the parameters to the system, how are the trades generated

A: That's a trade secret, and it is closely guarded to insure the integrity of  the system. We are not selling the system code, only the buy/sell  signals. However, generally speaking the system uses the principle of  'mean reversion' more so then "momentum Trading."  However the system  has intelligence built in so that it will attempt to ride a trending  move when the opportunity arises.  For example the average trade length  is about 13 days, however that's simply an average as some trades can be held for a little as 3 - 5 days, while sometimes the system will catch  trending moves and stay in a trade for 2 - 3 months! You can see visual  examples of this in the 'Trade Examples' section.


Q: How and when are trades entered?

A: All 'new' trades are entered at the close of the day per the statistics, which makes this a true end of day swing system and something one could easily trade while working a full time job as you do not have to monitor the market all day long, just near the close for a few minutes.

The various sub systems can have up to 3 total entries with 3rd entries very rare occurrences and the majority of the trades being 1st and 2nd entries. 


Q: How and when are trades exited?

A: Shorts: All Shorts are exited at the bar close just like the entries.  However some trades can be exited via profit targets, which are rarely hit unless  the trade has had a huge move i.e. as over 10%.

Longs: Most longs are also exited at the closing bar.  However a few trade  types are exited on the market or bar open.  I communicate all trades  via email notification to let you know when to exit.


Q: In addition to buying ETF's like SPY and SSO for the trades, you also call out SPY call and put options for system trades?

A: Yes, for options I typically buy options with an expiration about 2 months out. For first entry trades I target a delta of 0.6, for 2nd entries I target a delta of 0.5, and for rare 3rd entries I target an even lower delta below 0.5. The thought process there is that 2nd and 3rd entry options have a higher probability and thus I I can buy options with lower delta to give more leverage.  Also PLEASE be aware that SPY options trade until 4:15 so you can buy them after the cash market close! Therefore you have 15 min to enter these after the market close, many folks are unaware of this as all other options cannot be traded in after hrs market. 


Q: How will I be notified when the system does a trade?

A: Whenever the system does a trade, I send out a trade notification to all  Breakpoint Trades subscribers.  Additionally most of the time I also send you an early trade notification in the middle of the day to notify you that there might be a system trade by the close, and I then confirm the trade with a second email near the close. I will also send SMS text messages (if  you have this service set up for your cell phone). However you don't  need to pay for the SMS service because you will be emailed for free.  I also post the trade signals on the 'Trading Community', which is our active intra-day forum for the website.  Thus it's always a good idea to check the Trading Community as well.  I also discuss the system in the newsletters from time to time,  however that's for extra or more detailed information, the official trade notifications are sent via email.

Additionally: The trades are added to this SPY Pro System section; you will see the  current trade status at the top of every page in large font bold  letters, and when the trades are closed out, they get added to the  Trades List section.  The current trade status at the top of each page:  SYSTEM Is Flat means that the system is not currently in a trade and is  in cash.  When the system is in a position such as SPY or the 2nd  entries using SSO or SDS it will be designated there as well.


Q: Can you tell me some of the typical statistics to the system, what's the  average gain? How long are the trades typically held? How often does it  do a trade, etc?

A: First off, you can view the detailed statistics to each of the 21 sub systems in the System Statistics section as well as some combination of the systems combined into a few charts.  All the statistics have trade data back to Jan 1995 or over 25 years and thus include all sorts of market condition from bull and bear markets, sideways market etc.

The majority of the systems have high profitability with 90% or greater winning trades, and high profit factors greater than 10.  A profit factor is calculated by the total net profit / total net loss. For example if a system makes $100 and loses $100, then the profit factor will be 1 i.e. 100/100.  A system that makes $100 and loses $10, has a profit factor of 10. Systems with profit factors of greater than 3 are considered good and all of our systems have profit factors greater than 10.

Again check out the Systems Statistics section, you will find addition statistics on the number of trades, average time in a trade, max historical draw downs etc. 


Q: What type of trades does the system typically do?  What's it based on, parameters etc

AWhile I can't get into secret sauce, the system is a combination of reversion to mean type trades that look for opportunities to quickly get in and  out of the market (like hitting singles baseball analogy), There's also  trending components where the system will attempt to hold trades for  longer swing trade opportunities (home run trades).  

The system is actually a macro system that is made up of, or diversified  across 21 sub systems that all work in concert with one  another.  Each sub system does different things and are actually whole  systems on their own that can be run individually.  My thought process  with this was that this gives the system a huge diversification, it's like running 21 systems vs 1.  Many systems out there are composed of only one trade type, such as a Larry Connors RSI 2 system etc, and so if that system gets out of sync with the market, you are out of luck.  Since my system is devised of 21 systems that all do and look at  different things in the market (some are reversion to mean, some are  trend following, some are breakout), the odds off all of these systems  getting out of sync with the market at once is astronomically low in my  opinion.  That's how I've approached this system; it's taken years and  thousands of hours of code and development, and of course I'm never  done, I will continue to further tweak and add new trade types and filters as I discover them, so one day there will be 25 sub systems, then 30 and so on. You can read a description of the current sub systems from the 'Overview' tab


Q: Is this system curve fitted, how do I know that it won't just stop working?

A: Well first off, there are no guarantees in life, especially trading.  Thus just like any system. it could stop working at any time (read our disclaimer). However that being said, a lot of care went into these systems, and they have been backtested against all market conditions (bear markets, bull markets, sideways markets, extreme volatile markets) by testing the systems back to Jan 1995 or over 25 years! Remember the majority of the systems are 'rubber band' type of trades i.e. enter trades when the market gets too stretched one way or the other and then quickly exit after a reversion to mean move.


  • Q: I just recently subscribed and become a member of BPT, however the system is already in a trade, should I enter the trade now?

    A: In most cases, the answer would be NO, especially if the trade is up substantially from the original entry price and you would be buying at worse prices than where the system entered, this would not be ideal from a risk/reward  scenario.  I would only consider if you can get a price close to or better than where the system entered. 

    1. Q: How much money should I invest in the system trades?

      A: That's up to you and you have to make your own trading decisions based on your objectives and personal risk/tolerance and we are not investment  advisers; however we suggest using proper money management. What we mean by this is, don't put 100% of your total capital into the system trades or leverage up your account using margin for the system trades.  It's no different when trading normal stocks, diversify your holdings, don't  place all of your eggs into one basket! On the website for simplicity we show each ETF entry as $10,000 and trade 1, 2, 3 SPY options for 1st, 2nd, and 3rd entries respectively.

Below is a table showing a summary of key trade statistics for the 21 SPY sub systems.  There are 12 long systems and 9 short systems.

Also click on the 'Longs' and 'Shorts' tabs to see images of the actual statistics

Also below is another table showing a combination by adding 10 of the long sub systems to one chart (minus the CCI and Trend/Pullback) and all 9 of the short sub systems to their own chart.



Below you will find images of detailed statistics for in each of the 12 SPY Long sub systems

QE 3.2 Exhaustion  (note trade entries are based on $10K via the SPY ETF)


QE BTS  (note trade entries are based on $10K via the SPY ETF)


QE Momo  (note trade entries are based on $10K via the SPY ETF)


Strap  (note trade entries are based on $10K via the SPY ETF)


CCI Oversold Divergence  (note trade entries are based on $10K via the SPY ETF)


Trend/Pullback  (note trade entries are based on $10K via the SPY ETF)


Bull Exhaustion 1  (note trade entries are based on $10K via the SPY ETF)


Bull Exhaustion 2  (note trade entries are based on $10K via the SPY ETF)


Bear Long  (note trade entries are based on $10K via the SPY ETF)


Bear Exhaustion  (note trade entries are based on $10K via the SPY ETF)


Sub System: RSI Oversold  (note trade entries are based on $10K via the SPY ETF)


Breakout  (note trade entries are based on $10K via the SPY ETF)



Below you will find images of detailed statistics for in each of the 9 SPY Short sub systems


Exhaustion Short 1  (note trade entries are based on $10K via the SPY ETF)


Exhaustion Short 2  (note trade entries are based on $10K via the SPY ETF)


Hi,Mid,Lo Short  (note trade entries are based on $10K via the SPY ETF)


QE BTS Short (note trade entries are based on $10K via the SPY ETF)


DVDS Short (note trade entries are based on $10K via the SPY ETF)


Stochastic Short 1 (note trade entries are based on $10K via the SPY ETF)


Stochastic Short 2 (note trade entries are based on $10K via the SPY ETF)


Stochastic Reversal Short (note trade entries are based on $10K via the SPY ETF)


Strap Short (note trade entries are based on $10K via the SPY ETF)



Below are a few images showing example trades from these 21 reversion to mean systems.  Note for simplicity I have placed 19 of the systems one one chart, 10 of the Long systems and 9 of the short systems so that you can see a good example and the frequency of the trades to expect. 

Please note that we don't trade the system in this way.  The 3rd chart below shows how we trade the systems:  I have 10 Long systems on one chart, 3 long sub systems on their own chart, and all 9 of the short systems on their own chart, so in practice I use 5 charts.


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