S&P 500:
An Example of a Trading
System using the technical analysis based on the SBV Oscillator
May 16, 2008
+18% in 2 months
This week SBV chart example is a
continuation of previous
example on
April 25, 2008. In this week's example we use
33% signal line.
|
Chart 1. Relationship between the SBV oscillator and
index reversal points. S&P 500 index. 60-day view. 1 bar = 1 hour. SBV(20) |
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By comparing the current week example with
SBV chart analysis represented on
March 28,
2008 we may see that that this
week's examples generates fewer signals over similar period of time. We even see
that there could be prolonged periods when system can stay in cash (from April
24, 2008 until May 12, 2008). The main difference between these two examples is
that the current example uses 33% signal line while the example on March 28 uses
20% signal line.
Below we summarized a few points about using higher a lower signal line:
- Higher signal line generates signal
earlier;
- Higher signal line generates fewer trades;
- In average a positive trade generated by the
higher signal line would be more profitable than the average trade generated
by the lower signal line, yet, keep in mind that the lower signal line may
generate more positive trades over the same period of time;
- In average a negative trade generated by the higher signal line would
have bigger loss than the average negative trade based on the lower signal
line, yet, keep in mind that the lower signal may generate more negative
trades over the same period of time.
It's
Simple and profitable
In our trading example, we applied the following
simple system which is based on our SBV indicator:
-
Once the SBV indicator declines below minus 33% (the
indicator will now show green), we enter a short position (if we are
not already short);
-
Once the SBV indicator advances above minus 33% (after having
been below that level), we will enter a long position (the indicator
still shows green);
-
Once the SBV indicator rallies above plus 33% (the indicator
will now show red), we enter a long position (if we are not already
long);
-
Once the SBV indicator declines below plus 33% (after having
been above that level), we will enter a short position (the indicator
still shows red);
-
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 |
|
03/18/08 |
rule #2 |
Buy |
1303 |
03/24/08 |
rule #4 |
Sell |
1358 |
+55 |
|
03/24/08 |
rule #4 |
Sell Short |
1358 |
03/31/08 |
rule #2 |
Buy to Cover |
1321 |
+37 |
|
03/31/08 |
rule #2 |
Buy |
1321 |
04/04/08 |
rule #4 |
Sell |
1374 |
+53 |
|
04/04/08 |
rule #4 |
Sell Short |
1374 |
04/15/08 |
rule #2 |
Buy to Cover |
1334 |
+40 |
|
04/15/08 |
rule #2 |
Buy |
1334 |
04/21/08 |
rule #4 |
Sell |
1384 |
+50 |
|
04/21/08 |
rule #4 |
Sell Short |
1384 |
04/24/08 |
rule #5 |
Cash |
1389 |
-5 |
|
05/12/08 |
rule #2 |
Buy |
1397 |
05/14/08 |
rule #4 |
Sell |
1410 |
+13 |
|
Total: |
+243 |
Note: The 33% 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.
| Disclaimer: The chart
example is intended for educational purposes only and it does not
constitute trading advice, nor does it make or imply any market trend
predictions. |
More Examples:
| Date |
Index |
Timeframe |
Result |
Number of Trades |
| Dec. 26, 2008 |
S&P 500 |
60-day |
+294 points (+31%) |
13 "Long" and 12 "Short" |
| Dec. 19, 2008 |
S&P 500 |
60-day |
+290 points (+30%) |
12 "Long" and 12 "Short" |
| Dec. 12, 2008 |
S&P 500 |
10-day |
+91 points (+11%) |
9 "Long" and 8 "Short" |
| Dec. 5, 2008 |
S&P 500 |
60-day |
+354 points (+36%) |
10 "Long" and 10 "Short" |
| Nov. 28, 2008 |
S&P 500 |
60-day |
+420 points (+43%) |
10 "Long" and 9 "Short" |
| Nov. 21, 2008 |
S&P 500 |
60-day |
+244 points (+20%) |
14 "Long" and 10 "Short" |
| Nov. 14, 2008 |
Nasdaq 100 |
10-day |
+69 points (+5.1%) |
5 "Long" and 6 "Short" |
| Nov. 7, 2008 |
DJI |
30-day |
+3,137 points (+30%) |
5 "Long" and 6 "Short" |
| Oct. 31, 2008 |
S&P 500 |
5-day |
+42 points (+4.7%) |
9 "Long" and 9 "Short" |
| Oct. 24, 2008 |
DJI |
30-day |
+3,004 points (+27%) |
5 "Long" and 6 "Short" |
| Oct. 17, 2008 |
DJI |
30-day |
+2,886 points (+26%) |
4 "Long" and 4 "Short" |
| Oct. 10, 2008 |
DJI |
30-day |
+2,262 points (+20%) |
5 "Long" and 6 "Short" |
| Oct. 3, 2008 |
DJI |
30-day |
+958 points (+8.3%) |
8 "Long" and 9 "Short" |
| Sept. 26, 2008 |
S&P 500 |
60-day |
+74 points (+5.8%) |
7 "Long" and 7 "Short" |
| Sept. 19, 2008 |
S&P 500 |
60-day |
+114 points (+9.0%) |
6 "Long" and 7 "Short" |
| Sept. 12, 2008 |
DJI |
30-day |
+1,232 points (+11%) |
5 "Long" and 5 "Short" |
| Sept. 5, 2008 |
DJI |
30-day |
+734 points (+6.3%) |
5 "Long" and 5 "Short" |
| Aug. 29, 2008 |
DJI |
30-day |
+600 points (+5.2%) |
6 "Long" and 6 "Short" |
| Aug. 22, 2008 |
DJI |
30-day |
+995 points (+8.7%) |
5 "Long" and 5 "Short" |
| Aug. 15, 2008 |
S&P 500 |
15-day |
+41 points (+3.2%) |
7 "Long" and 8 "Short" |
| Aug. 8, 2008 |
S&P 500 |
15-day |
+44 points (+3.5%) |
6 "Long" and 7 "Short" |
| Aug. 1, 2008 |
S&P 500 |
15-day |
+45 points (+3.6%) |
4 "Long" and 8 "Short" |
| July 25, 2008 |
S&P 500 |
15-day |
+28 points (+2.2%) |
1 "Long" and 3 "Short" |
| July 18, 2008 |
S&P 500 |
60-day |
+7 points (+0.0%) |
9 "Long" and 5 "Short" |
| July 11, 2008 |
S&P 500 |
15-day |
+103 points (+7.8%) |
4 "Long" and 6 "Short" |
| July 3, 2008 |
S&P 500 |
15-day |
+69 points (+5.2%) |
4 "Long" and 6 "Short" |
| June 27, 2008 |
S&P 500 |
60-day |
+62 points (+4.4%) |
7 "Long" and 6 "Short" |
| June 20, 2008 |
S&P 500 |
60-day |
+113 points (+8.5%) |
4 "Long" and 2 "Short" |
| June 13, 2008 |
S&P 500 |
60-day |
+108 points (+8.1%) |
4 "Long" and 2 "Short" |
| June 6, 2008 |
S&P 500 |
15-day |
+47 points (+3.4%) |
7 "Long" and 10 "Short" |
| May 30, 2008 |
S&P 500 |
60-day |
+201 points (+15%) |
4 "Long" and 3 "Short" |
| May 23, 2008 |
S&P 500 |
60-day |
+222 points (+16%) |
3 "Long" and 4 "Short" |
| May 16, 2008 |
S&P 500 |
60-day |
+243 points (+18%) |
4 "Long" and 3 "Short" |
| May 9, 2008 |
NASDAQ 100 |
10-day |
+97 points (+5.1%) |
10
"Long" and 10 "Short" |
| May 2, 2008 |
S&P 500 |
15-day |
+31 points (+2.2%) |
7 "Long" and 9 "Short" |
| April 25, 2008 |
S&P 500 |
60-day |
+251 points (+18%) |
7 "Long" and 8 "Short" |
| April 18, 2008 |
S&P 500 |
15-day |
+91 points (+6.6%) |
3 "Long" and 3 "Short" |
| April 11, 2008 |
S&P 500 |
15-day |
+39 points (+3.0%) |
4 "Long" and 5 "Short" |
| April 4, 2008 |
NASDAQ 100 |
5-day |
+93 points (+5.2%) |
7 "Long" and 6 "Short" |
| March 28, 2008 |
S&P 500 |
60-day |
+29 points (+2.1%) |
6 "Long" and 7 "Short" |
| March 20, 2008 |
S&P 500 |
5-day |
+53 points (+4.2%) |
3 "Long" and 4 "Short" |
| March 14, 2008 |
S&P 500 |
5-day |
+77 points (+6.0%) |
6 "Long" and 5 "Short" |
| March 7, 2008 |
S&P 500 |
60-day |
+222 points (+15%) |
9 "Long" and 9 "Short" |
| Febr. 29, 2008 |
S&P 500 |
60-day |
+211 points (+14%) |
8 "Long" and 8 "Short" |
| Feb. 22, 2008 |
S&P 500 |
15-day |
+85 points (+6.4%) |
4 "Long" and 5 "Short" |
| Feb. 15, 2008 |
S&P 500 |
60-day |
+211 points (+15%) |
7 "Long" and 7 "Short" |
| Feb. 8, 2008 |
S&P 500 |
60-day |
+214 points (+14%) |
6 "Long" and 6 "Short" |
| Feb. 1, 2008 |
S&P 500 |
60-day |
+246 points (+17%) |
5 "Long" and 5 "Short" |
| Jan. 25, 2008 |
S&P 500 |
60-day |
+330 points (+20%) |
5 "Long" and 5 "Short" |
| Jan. 18, 2008 |
S&P 500 |
60-day |
+330 points (+22%) |
4 "Long" and 5 "Short" |
| Jan. 11, 2008 |
S&P 500 |
60-day |
+309 points (+21%) |
5 "Long" and 5 "Short" |
| Jan. 4, 2008 |
S&P 500 |
60-day |
+291 points (+20%) |
4 "Long" and 5 "Short" |
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