From the May 01, 2011 issue of Futures Magazine • Subscribe!

Software Review: TriggerPointTrading

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.

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