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Market-Neutral Trading: Combining Technical and Fundamental Analysis Into 7 Long-Short Trading Systems by Thomas K. Carr

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CHAPTER 12

THE PULLBACK/RELIEF RALLY SYSTEM

The chance of bread falling with the buttered side down is directly proportional to the cost of the carpet.

—Anonymous

We come now to what I call my “bread and butter” system. It has been, over the span of my trading career, my most used system and, for that reason, the system that has most contributed to my family’s income (hence, the nickname). It is the “old faithful” of trading systems. It can be traded on the monthly chart or the one-minute chart; on stocks, indexes, forex, and commodities. It works in bull markets, bear markets, and everything in between. It is so rooted in common sense, so reasonably constructed, that it cannot fail to produce profits no matter how many people latch on to it. ...

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