Introduction

I thought I would publish a blog to make the whole world know, so that they don't succumb the same fate I went through when signing with this con man "Stuart Kidney" aka Mechanical Day Trader www.mechanicaldaytrader.blogspot.com. He promises the world, trading the YM futures and says it's so easy a fifth grader could be making 100 pts minimum per day, 500 points per week. Yeah right!

I bought into his methodology which cost me $4k in the hope that I too would be making the kind of points he guaranteed. That guarantee is bullshit, as it's based on the "Kindergarten Trades", he calls, which is what the student should be learning from day 1. These trades are just bascially double bottoms / tops with positive / negative divergence of the MACD. It's easy to see these after they happen, when the MACD has crossed, but when it has crossed the trade is now too far gone to take. He would most probably find a double top/bottom that occurred, I mean, they're everywhere, in order to invalidate your claim. But shouldn't it be backed up with the main piece of software that gets you into the move, "Day Raider" through Strategy Runner.

His software "Day Raider" does nothing to get you into the move, all except, if all 3 indicators show divergence, rarely happens!!!

Day Raider was built in Strategy Runner, and we were all told that this piece of kit was proprietary, even better than institutional software. To my disgust here are the indicators:

Main chart:
Bollinger Band 14, 2 exponential
Keltner channel 8, Atrs 1 Avg not visible
Parabolic Sar Factor 0.01 / maximum 0.4
Ichimoku 18/36/6/13
Time Series Forecast - 3

Indicators:
Aroon oscillator 9
TRIX 9
MACD 6/13/6

The methodology:

Yesterdays Trade - mechanical systems (institutional get the wholesale prices these would be your naked highs (upper wick) and naked lows (lower wick)), make the AM low and high and PM low and high.

AM low = code 1
AM high = code 2
PM low = code 3
PM high = code 4

So yesterday's trade would occur from code 3 or 4, long from code 3 and conclude at tomorrows code 2 or short from code 4 and conclude at tomorrows code 1. The methodology says that if a gap up then were long from code 3 and if we gap down were short from code 4.

You need to understand when yesterday's trade finishes, this again is very ambiguous, 100 points from code 3 to code 1, 150 points, 180 points, 200 points. It's just a stab in the dark!

So if from yesterdays code 3 to the close is 50 points, it gaps up 50 points, then theoretically yesterdays trade should be finished as done 100 points already from code 3. If only it was the case. Many times it would do 120 points, 150, 170, 200, 250, and then reverse.

The first part of his course teaches you the fundamentals of futures trading, just basically how to read a chart, with the 6 reversal rules, double bottoms, double tops, reverse head and shoulders, head and shoulders. old support = new resistance, old resistance = new support. Also, he will boast to you how in one day how he made 800 points, sitting through 100 point pullbacks!!!!

He will give you some homework so that you can identify these reversals.

Then you move onto module 1 which talks about the 1 minute methodolgy and yesterdays trade.
The 1 minute methodology is based on the Dow Cash which you should base all your decisions on and also you learn about Dow behaviours. His assumption is that the mechanical systems exhibit the same behaviours day after day. The Dow Behaviours are: round numbers, trend points and time. For example, a trend has been going for 1 hour, has covered 100 points and is now at 8400, that's 3 dow behaviours, you should have a minimum of 2, it makes a double bottom, you've got positive divergence, you pull the trade with a tight stop and next you know it, it carries on down 50 more points for another 30 mins.

Stuart covers his back saying the reversals happen in 15/30/45/60/120 minutes increments. Again, another stab in the dark and just too ambiguous.

On the Dow Cash, he uses ADVFN charts which are free, and has bollinger, keltner, macd, and fast stochastic.

Stuart gives each reversal a pretty name, like a DRUP, URUP, UC, RDOWN, or DOWN. These are what he calls mechanical trades.

DRUP = Down trend reversal up
URUP = Uptrend reversal up, happens after a DRUP
UC = uptrend continutation, happens at mid keltner
RDOWN = reversal down, happens after DOWN and at >= mid keltner
DOWN = just a down move at high keltner or above

To continue