It's Simple and profitable

In our trading example, we applied the following simple system which is based on our SBV indicator:

1. Once the SBV indicator declines below minus 20% (the indicator will now show green), we enter a short position (if we are not already short);
2. Once the SBV indicator advances above minus 20% (after having been below that level), we will enter a long position (the indicator still shows green);
3. Once the SBV indicator rallies above plus 20% (the indicator will now show red), we enter a long position (if we are not already long);
4. Once the SBV indicator declines below plus 20% (after having been above that level), we will enter a short position (the indicator still shows red);
5. If the SBV dropped into negative territory and started to rise without hitting the signal line, close the short position when the SBV is back in the positive territory, and stay in cash until a new buy signal is generated. Vise versa for a long position.

Table 1: Trades based on the 5-rule (additional stop-loss rule) system.

Open Trades				Closed Trades				Profit (points)
Time	Motivation	Trade	Index	Time	Motivation	Trade	Index
03/31/08	rule #2	Buy	1322	03/31/08	rule #4	Sell	1322	0
03/31/08	rule #4	Sell Short	1322	04/01/08	rule #3	Buy to Cover	1350	-28
04/01/08	rule #3	Buy	1350	04/02/08	rule #4	Sell	1370	+20
04/02/08	rule #4	Sell Short	1370	04/03/08	rule #2	Buy to Cover	1366	+4
04/03/08	rule #2	Buy	1366	04/03/08	rule #4	Sell	1369	+3
04/03/08	rule #4	Sell Short	1369	04/04/08	rule #2	Buy to Cover	1369	0
04/04/08	rule #2	Buy	1369	04/04/08	rule #4	Sell	1371	+2
04/04/08	rule #4	Sell Short	1371	04/07/08	rule #2	Buy to Cover	1379	-8
04/07/08	rule #2	Buy	1379	04/07/08	rule #4	Sell	1376	-3
04/07/08	rule #4	Sell Short	1376	04/08/08	rule #2	Buy to Cover	1362	+14
04/08/08	rule #2	Buy	1362	04/08/08	rule #1	Sell	1365	+3
04/08/08	rule #1	Sell Short	1365	04/08/08	rule #2	Buy to Cover	1365	0
04/08/08	rule #2	Buy	1365	04/09/08	rule #1	Sell	1355	-10
04/09/08	rule #1	Sell Short	1355	04/09/08	rule #2	Buy to Cover	1355	0
04/09/08	rule #2	Buy	1355	04/10/08	rule #4	Sell	1365	+10
04/10/08	rule #4	Sell Short	1465				1333	+32
Total:								+39

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time the trading examples were selected. In order to establish the optimal critical levels for the SBV indicator, traders should consider the current market situation and review a chart history of prior volume surges including their magnitude (i.e., the level the SBV indicator reached).

Our charts are unique in that they give traders the option to choose specific chart settings that best fit their personal trading styles and risk tolerance. Traders can thus develop and test their own trading systems. On our charts, you can scroll back in history to test any system you created.