David,
The trading of gaps, either up or down, is in vogue and I think this is what his system entails. There is at least one principal tutor on these boards who advocates the same principle. However, as traders know, the first half hour can blow the retail trader to pieces with Market Maker manipulation and the inherent spikes - some of them quite dramatic - carefully designed to take out stops.
I telephoned the guy (Mr. Sheridan) at CMS and put it to him that it was, at the end of the day, a trading method of anticipated gaps based on news gathered from internet sites such as Reuters or Quote.com, with the knowledge that at least 85% of gaps of significant size do indeed become filled (see interesting article on this phenomenon in March edition of Traders' Magazine.) This was not denied by him.
I chose not to subscribe, but have retained his documentation. Having subscribed in the past to various methods advocated by tutors, without conducting due diligence to any serious degree, I have grown more cautious and have arrived at the following conclusions:
1. The Holy Grail in its purest form develops from within your own tried and tested systems, finely-tuned against a backdrop of convivial and voluntary transference of knowledge with other trusted traders. For example, I have learnt much from another member of this board who trades profitably for a living and we share ideas, observations, theories and practical application almost daily. Our motivation is that we get along and we try to help one another without the obstacle of pecuniary interest.
2. I have learnt to keep my trading style simple, using the following: Japanese candlesticks, bollinger bands, moving averages and stochastics, all with certain personal rules governing set-ups, indicators and criteria for the execution of both entry and exit to and from the trades.
3. I will never again enter a position (particularly in Forex) minutes prior to the release of Non Farm Payroll Figures just because CNN and Bloomeberg commentators and others have indicated that A,B & C are most likely to happen!!!!!
4. Following on from 3 above, trade what you see and not what you hear.
5. Treat Fib levels with caution. They work consistently well on Nasdaq stocks, but are, nevertheless, self-fulfilling prophecies. The big boys lie in wait around fib levels like pike, as the minnows place their trades just above and below the water lilies. The pike know where you are; they are watching - hungrily!
I could go on, but will stop - for I feel I have little right to proffer advice when so many on this huge and expanding board are more skilled and experienced in trading than this comparative novice.
Off to catch a flight to Glasgow. I wonder if I shall meet the legendary Martin Walker?
Sean