This week's SBV chart example is based on the 10-day Nasdaq 100 SBV Oscillator (20) chart.

+6.6% on the Nasdaq 100
in two weeks

Chart 1. Relationship between the SBV Oscillator and
index reversal points. Nasdaq 100 index. 10-day view. 1 bar = 10 minutes. SBV Oscillator (20,9)

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

1. Once the SBV indicator has fallen below a negative signal level (the indicator will now show red), we will enter a short position(if we are not already short);
2. Once the SBV indicator has advanced above a negative signal level (after having been below that level), we will enter a long position (the indicator still shows red);
3. Once the SBV indicator has rallied above a positive signal level (the indicator will now show green), we will enter a long position (if we are not already long);
4. Once the SBV indicator has fallen below a positive signal level (after having been above that level), we will enter a short position (the indicator still shows green);
5. Additional Stop Loss Rule - If the SBV had dropped into negative territory and has begun to rise without having hit the signal line, close the short position when the SBV is back in positive territory, and stay in cash until a new signal appears.
   
   Do the opposite for a long position: if the SBV had moved into positive territory and has begun to decline without having hit the positive signal line, close the long position when the SBV is back in negative territory, and stay in cash until a new signal appears.

Detailed system description with explanation of used rules could be found in our "SBV Trading System" tutorial.

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.