+31 points on the S&P 500

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
04/18/08	rule #4	Sell Short	1387	04/21/08	rule #2	Buy to Cover	1384	+4
04/21/08	rule #2	Buy	1384	04/22/08	rule #4	Sell	1381	-3
04/22/08	rule #4	Sell Short	1381	04/22/08	rule #2	Buy to Cover	1376	+5
04/22/08	rule #2	Buy	1376	04/23/08	rule #4	Sell	1376	0
04/23/08	rule #4	Sell Short	1376	04/23/08	rule #5	Cash	1379	-3
04/25/08	rule #4	Sell Short	1391	04/25/08	rule #2	Buy to Cover	1388	+3
04/25/08	rule #2	Buy	1388	04/28/08	rule #4	Sell	1400	+12
04/28/08	rule #4	Sell Short	1400	04/28/08	rule #3	Buy to Cover	1401	-1
04/28/08	rule #3	Buy	1401	04/28/08	rule #4	Sell	1401	0
04/28/08	rule #4	Sell Short	1401	04/29/08	rule #2	Buy to Cover	1392	+9
04/29/08	rule #2	Buy	1392	04/30/08	rule #4	Sell	1396	+4
04/30/08	rule #4	Sell Short	1396	04/30/08	rule #3	Buy to Cover	1397	-1
04/30/08	rule #3	Buy	1397	04/30/08	rule #4	Sell	1387	-10
04/30/08	rule #4	Sell Short	1387	05/01/08	rule #2	Buy to Cover	1387	0
05/01/08	rule #2	Buy	1387	05/02/08	rule #4	Sell	1411	+14
05/02/08	rule #4	Sell Short	1411	05/02/08	rule #2	Buy to Cover	1413	-2
Total:								+31

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.