401 Congress Avenue, Suite 1540
Austin, TX 78701
Price: Monthly subscription fee of $99.95
TriggerPointTrading uses ideas from Wyckoff to identify upmoves (named “springs”) and pending downmoves (confusingly named “upthrusts”) to help you time your trades. An important Wyckoff component is volume, which for retail spot FX is estimated using tick volume from about 20 contributing brokers. The TriggerPoint software places colored dots on your chart to identify “possible springs” (yellow) to “confirmed springs” (green, meaning buy), and the same thing for upthrusts (meaning sell) along with a dot that says “possible trend change.” We were not able to get the proprietary Buy/Sell “pressure indicator” to display on the screen.
By right-clicking on the chart, you can draw your own lines and channels and add some standard indicators (MACD, stochastic oscillator, Bollinger bands, etc.). Multiple timeframes from one minute to one month are not only offered, but recommended—you may not see a confirmed spring on the 60-minute chart, but it’s visible on the 30-minute chart, for example. Your list of charts along one side of the screen has a column with the appropriately colored dot alongside each time frame. We always preach that using multiple time frames is the right way to analyze price action, and here is a direct application. You can’t change the time frame of an existing chart, however; you have to type in the specs for an entirely new chart with the new time frame.
Some of the outcomes are a bit mysterious. On the 60-minute chart of USD/JPY, for example, the price moved from 83.26 at 7 a.m. on March 11 to 76.32 at 9 p.m. on March 16 and never generated a confirmed upthrust (sell signal). USD/JPY then reversed from 76.32 to 81.49 the next day without ever issuing a confirmed spring (buy signal). We would say that missing a nearly 700-point move and then a 517-point move for a total of 1217 points is a serious flaw. We tried to check the 30-minute version, but the chart wouldn’t scroll back that far. The futures version of the same currency pair in the 60-minute time frame, however, came up aces and called both the top and the bottom, although the bottom was still only a possible spring followed by a possible trend change, not a confirmed spring.
Why the discrepancy? The answer seems to lie in the definition of support, which is always placed (in this software) at the last significant low. In other words, support and resistance always are horizontal lines and never the connector along a series of rising lows or progressively lower highs. A test of support, therefore, is defined in only one way. Because Wyckoff viewed each price move as though it came from a single mind—an astute acknowledgment of crowd behavior—you have to wonder what he would make of such an unrealistic and unworkable assumption. TriggerPoint was launched only at year-end 2010, so changes still are being made, including planned adjustments to the definition of support.
We also ran a real-time trading test in the ERU/USD from March 4 to March 18, 2011 on the 15-minute chart. TriggerPoint delivered nine confirmed signals, but blindly following the signals would have resulted in a net loss. The “strength of trend” coloring system could be useful, though. In one period, TriggerPoint had been showing bright green bars (strong uptrend) that changed to brown and then bright red along with a confirmed upthrust. These changes in the bar colors correctly signaled that prices were reversing to the downside. So while you wouldn’t want to follow every signal, you could get entry and exit confirmation from another system or avoid an unhappy surprise.
Wyckoff also stressed the risk management aspect of trading and was an early proponent of always specifying the exit from a trade ahead of time, including stop-losses. TriggerPoint Trading doesn’t offer—nor can you add—stops and targets, a shortcoming the programmers attribute to the heavy regulatory hand of the NFA. You can get ongoing discussion of stops and targets at TriggerPoint’s webinars and chats, including the website of TriggerPoint’s education guru (www.ltg-trading.com), who also is an introducing broker.
On the practical side of things, TriggerPoint loads beautifully and is easy to use, but pricey ($99.95/month plus the cost of live data from one of three vendors), especially for software with no user guide (there is a barebones color guide FAQ at the website). Equity traders with a big budget may find TriggerPoint a useful sanity check, especially in the longer time frames, but to consider tick volume in retail spot FX a proxy for actual volume is awfully high risk.