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The BLAM breakout system was developed by Brad Matheny as a means to compliment the Japanese candlestick trading technique. The Japanese believe that Moving Averages are one of the most powerful trading tools developed by the West. Keeping this in mind, Mr. Matheny developed the BLAM system using moving averages of the open, high, low and close prices. The concept is to identify market breakouts and potential stalling areas in market trend.
The BLAM system uses multiple moving averages and compares the reactions of the averages against the market price. The BLAM system also uses pattern recognition to assist in finding the potential signals.
The chart to the right shows the BLAM system at work. You can see it generates multiple trading signals as the market trends. Traders should only react on the first 2 or 3 signals. Any subsequent signals should be considered 'Trend Continuation' signals.
This trading system is proprietary and the actual rules have not been released to the public. The BLAM breakout system is available within both the PFP 1.0 and PFP 2.0 programs. Visit www.ment.com if you would like to learn more.