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SBV Technical Analysis - Trading Volume with Confidence

Simple Trading System on SBV


Perfect correction's signals: +58% on the S&P 500

This week's SBV chart example is based on the 15-day SBV Flow (Selling/Buying Volume Flow) S&P 500 chart and it is a continuation of the previous chart example published a week ago (see HERE).

Chart 1. S&P 500 chart published now.
15-day view. 1 bar = 15 minutes. SBV Flow (24, 3)and SBV Flow (14, 5)

S&P 500 index chart volume signals

As we mentioned a week ago:

Over the past month we see increase in volatility. 14-day ATR (average True Range) has moved over 1.3% on the S&P 500 daily charts which means that over past 14 days the S&P 500 in average had 1.3% gap between high and low within a trading session. Since market condition changed, it could be recommended changing indicator's settings to avoid a situation when a signal is generated too late or too early. We were in a similar situation in the past - see our SBV example published on June 21, 2013 here
http://www.marketvolume.com/sbv/tradingsystem.asp?aid=1048&t=samp;p-500-analysis

It could be recommended go back to SBV Flow with 14-bar period and sensitivity = 5 when 14-day ATR% is back below 1.2%. We keep 0.1% difference between triggering changes in setting to avoid choppy changes if volatility (14-dat Absolute ATR) fluctuates around 1.3%. Until then we will be monitoring SBV Flow with 24-bar period settings and sensitivity = 3.

It's Simple and Profitable

  • Rule #1: Go "Long" ("Buy") when SBV Flow crosses zero line (becomes positive) and moves above it.
  • Rule #2: Go "Short" ("Sell Short") when an indicator crosses zero line (becomes negative) and starts to move below it.

How to set Alerts to the chart above

  1. Log into the members' area;
  2. Open a chart - you may use the "Open Chart" link in the left hand menu on the members' area;
  3. Select the "S&P 500" from the drop down menu at the top of the chart (second from the left);
  4. Select "15 days" view from the drop down menu at the top of the chart (fifth from the left);
  5. Make right mouse click on the chart and select "Studies" and then "Volume Studies";
  6. In the "Studies" window locate the "SBV Flow" indicator and add it to the chart with following settings: Bar Period = 24 and Sensitivity = 3;
  7. After you close the "Studies" window, press the exclamation mark button at the top right corner of the chart to open the "Alerts" window;
  8. In the "Alerts" window set alert for SBV Flow indicator on crossovers of SBV Flow and 0 (zero);
  9. After you set alert and close the "Alerts" window, press the "Save" button to save the chart setting as a chart style for future references;
  10. Keep the chart open and wait for alerts.
Table 1: Trades based on the 2-rule system and SBV Flow

DateMotivationSignalIndexProfit (points)
03/26/2013Rule#1Buy1560+1
04/01/2013Rule#2Sell Short1561-1
04/01/2013Rule#1Buy1562+4
04/02/2013Rule#2Sell Short1566+18
04/05/2013Rule#1Buy1548+37
04/12/2013Rule#2Sell Short1585+16
Skipped signals could be found here
08/22/2013Rule #2Buy1655+34
08/26/2013Rule #1Sell Short1658+20
08/28/2013Rule #2Buy1638+5
08/29/2013Rule #1Sell Short1643+2
09/04/1961Rule #2Buy1641+55
Skipped signals could be found here
01/31/2014Rule #2Buy1779+2
02/03/2014Rule #1Sell Short1781+25
02/04/2014Rule #2Buy1756-15
02/05/2014Rule #1Sell Short1741-10
02/05/2014Rule #2Buy1751+86
Skipped signals could be found here
05/21/2014Rule #1Buy1884+66
06/12/2014Rule #2Sell Short1940-1
06/17/2014Rule #1Buy1941+16
06/24/2014Rule #2Sell Short1957+2
06/27/2014Rule #1Buy1955+22
07/07/2014Rule #2Sell Short1977+12
Skipped signals could be found here
09/12/2014Rule #2Sell Short1990-6
09/16/2014Rule #1Buy1996+13
09/19/2014Rule #2Sell Short2008+18
09/24/2014Rule #1Buy1990-15
09/25/2014Rule #2Sell Short19750
09/26/2014Rule #1Buy19750
09/29/2014Rule #2Sell Short19750
09/29/2014Rule #1Buy1975-3
09/29/2014Rule #2Sell Short1972-5
09/29/2014Rule #1Buy1977-5
09/30/2014Rule #2Sell Short1972+26
10/02/2014Rule #1Buy1948+15
10/06/2014Rule #2Sell Short1963+6
10/08/2014Rule #1Buy1957-17
10/09/2014Rule #2Sell Short1940+84
On October 9 of 2014 the 14-day ATR% on the S&P 500 index moved above 1.3%. After that we used SBV Flow with Bar Period = 24 and Sensitivity = 3
10/16/2014Rule #1Buy1856+30
Total:+908 points
(+58.21%)

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

Disclaimer: The chart example is intended for educational purposes only and does not constitute trading advice or make or imply any market trend prediction.
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