Trading System Labs, Vol. 2: Countertrend Trading

The September 2005 Trading System Lab examined the KT Trading System, which used stochastic %K lines on different time frames to pinpoint trade entries. The KT Opportunity System uses the same multiple time frame technique, with the additional condition that the index of a stock’s market sector must also be in an oversold condition for a buy to occur. When an individual stock’s %K lines (on multiple time frames) are oversold and the overall market is also oversold, there is a better chance for a profitable trade entry.