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Indicators
Whether you use TrendSignal End-of-Day or Real Time, we have key indicators to help you make your trading decisions, all formatted automatically. Click on any of the bookmarks below for a detailed decription of how they can be used for profitable trading. The best way to learn about our indicators and products is to attend one of our FREE seminars. Please click here to register.
The Market Action panel is highlighted above. It comprises the price chart and the main TrendSignal indicators.
All the indicators will be loaded up automatically when a chart is selected and the data downloaded. The Sniper Circles are known as “snipers””. They represent zones that are likely to stop a market going up or reverse it if it is falling. They are a good guide as to potential stops and or target for a market to move to. When used in combination with the TrendSignal Line and Vector Average (see later) they are an excellent way of deciding when to trade and just as importantly, when not to trade.
The Vector Average™ is arrowed above.
The Vector Average is GREEN when the trend is up and RED when it is down.
The Vector Average is an advanced moving average and is designed to get you in a trade and keep you in a trade for as long as possible.
It is also very useful for timing breakout trades following price congestion. When price congests and then breaks out of this type of formation, the Vector Average must support this type of move.
For a long trade the Vector Average must be green whilst a short trade must be supported by a red vector average.
“Sniper Circles” or “Snipers” are yellow circles with either a red perimeter, which denotes a sell or start of a downtrend, or a Green perimeter, which denotes a buy or the start of an uptrend.
“Sniper Circles” or “Snipers” are fully automated and are an important indicator for use in identifying trend changes.
They appear when TrendSignal detects a potential major reversal point in price and they ONLY appear when TrendSignal believes you have THREE valid reasons for entering a trade.
The chart below is an extension of the chart on the previous page. The second Sniper circle indicating a buy, resulted in a trend reversal into an uptrend, with the price subsequently rallying to 595 at the top of the envelope.
The Pivot Points or Support and Resistance numbers and lines are automatically generated by TrendSignal. Three of these Pivot Points are outlined in black boxes in the chart above.
The colour of the Pivot Point and line denotes whether it is providing support or resistance at the outset. The key point about support and resistance is that when key support is broken it then acts as resistance, and when resistance is broken it then acts as support.
Note 1: Pivot Point and support line left at 1484.75
Note 2: Price trends higher, eventually turning down and leaving Pivot Point and Resistance line at 1493.63
Note 3: Price rotates lower then reverses back up to retest the Pivot Point and resistance line left at 2.
Note 4: Price trends lower again, having failed at the 1493.63 level, and test the original Pivot Point and Support line left at 1484.75 (Note1).
Note 5: Price then reverses and trends higher to test minor Pivot Point left after the retest at 1493.63 (Note 3).
Note 6: Price fails to break resistance and trends lower again back down to original Pivot Point and support at 1484.75.
Pivot Points and support / resistance lines are best considered as magnets. They operate in a similar fashion to magnets to the extent that the lines will attract and repel prices. When the price breaches the line (whether it be support or resistance), the line will then provide the same influence in attracting and repelling the price.
In terms of application, the Pivot Lines and support / resistance lines are very useful for managing risk. When taking a short or long trade, the trend is confirmed in most cases with a Pivot Point.
The graph below is an extension of the chart on the previous page and provides a good example of the significance of a breach of the support line. When the price finally closed below the 1484.75 support line, the market subsequently fell to 1470!
The TrendSignal™ Market Trend panel is the highlighted area in the above chart.
The TrendSignal is used in conjunction with the other indicators and is useful is assessing a potential change in the trend. The TrendSignal is a momentum indicator and measures the feeling of the buyers and sellers in the market.
- A rising green line means “people expect prices to go higher” and are buying.
- A falling red line means “people expect prices to fall” and are selling.
- When the TrendSignal™ is close to the 90% line on the chart it suggests the market is oversold. Equally, then it approaches 10%, as above, there will be an increased risk that it could turn green and signal a reversal back up in the price.
The Step Stop is a guide for trailing a stop. The objective to trailing a stop is to give the trade an opportunity to develop further whilst attempting to protect un-realised profits.
The Step Stop is similar to a parabolic stop and reverse and it’s adjustment is dependent on volatility. The way volatility affects the level of the Step Stop can be seen in the highlighted area of the chart above. In the break higher (three green bars) the step Stop moved up when the price consolidated higher. One of the features on the Step Stop is that it will not move up or down when there is a sudden move – This is designed to protect the position and is based on the fact that statistically the price can retrace a percentage of any move. On a big move that retracement can be equally big.
The Step Stop is there to help you hang on to your money. In many ways the first rule of trading is stop losing money. Once this has been done, making money often seems simple.
The best way to learn about our indicators and products is to attend one of our FREE seminars. Please click here to register.
