S&P 500:
An Example of a Trading
System using the technical analysis based on the SBV Oscillator
June 27, 2008
+4% (62 points) in 2 months
This week SBV chart example is a
continuation of previous example on
June 20, 2008.
In the
last week's example we have explained the using of the trailing signal that
would help to avoid a situation when the SBV oscillator moves close to the
signal line, yet does not hit it to generate signal.
This example
continues to illustrate this rule on the practice:
|
Chart 2. Relationship between the SBV oscillator and
index reversal points. S&P 500 index. 60-day view. 1 bar = 1 hour. SBV(20) |
 |
Signal Level 1: If the SBV runs above plus 20% or drops below
minus 20% and reverses its trend without hitting 33% then use 20% as signal
line;
Signal Level 2: If the SBV runs above plus 33% or drops below
minus 33%, then use 33% as signal line.
-
Once the SBV indicator declines below negative signal level (the
indicator will now show green), we enter a short position (if we are
not already short);
-
Once the SBV indicator advances above negative signal level (after having
been below that level), we will enter a long position (the indicator
still shows green);
-
Once the SBV indicator rallies above positive signal level (the indicator
will now show red), we enter a long position (if we are not already
long);
-
Once the SBV indicator declines below
positive signal level
(after having
been above that level), we will enter a short position (the indicator
still shows red);
-
Additional Stop Loss Rule -
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 2: 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 |
|
05/06/08 |
rule #4 |
Sell Short |
1402 |
05/12/08 |
rule #2 |
Buy to Cover |
1397 |
+5 |
|
05/12/08 |
rule #2 |
Buy |
1397 |
05/14/08 |
rule #4 |
Sell |
1410 |
+13 |
|
05/14/08 |
rule #4 |
Sell Short |
1410 |
05/15/08 |
rule #3 |
Buy to Cover |
1421 |
-11 |
|
05/15/08 |
rule #3 |
Buy |
1421 |
05/20/08 |
rule #4 |
Sell |
1416 |
-5 |
|
05/20/08 |
rule #4 |
Sell Short |
1416 |
05/27/08 |
rule #2 |
Buy to Cover |
1379 |
+37 |
|
05/27/08 |
rule #2 |
Buy |
1379 |
06/02/08 |
rule #4 |
Sell |
1388 |
+9 |
|
06/02/08 |
rule #4 |
Sell Short |
1388 |
06/05/08 |
rule #2 |
Buy to Cover |
1391 |
-3 |
|
06/05/08 |
rule #2 |
Buy |
1391 |
06/06/08 |
rule #5 |
Cash |
1385 |
-6 |
|
06/12/08 |
rule #2 |
Buy |
1350 |
06/17/08 |
rule #4 |
Cash |
1356 |
+6 |
|
06/17/08 |
rule #4 |
Sell Short |
1356 |
06/23/08 |
rule #2 |
Buy to Cover |
1317 |
+39 |
|
06/23/08 |
rule #2 |
Buy |
1317 |
06/24/08 |
rule #4 |
Sell |
1310 |
-7 |
|
06/24/08 |
rule #4 |
Sell Short |
1310 |
06/24/08 |
rule #2 |
Buy to Cover |
1305 |
-5 |
|
06/24/08 |
rule #2 |
Buy |
1305 |
06/26/08 |
rule #2 |
Cash |
1295 |
-10 |
|
Total: |
+62 |
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 |
Number of Trades |
|
June 27, 2008 |
S&P 500 |
60-day |
7 "Long" and 6 "Short" trades |
|
June 20, 2008 |
S&P 500 |
60-day |
4 "Long" and 2 "Short" trades |
|
June 13, 2008 |
S&P 500 |
60-day |
4 "Long" and 2 "Short" trades |
|
June 6, 2008 |
S&P 500 |
15-day |
7 "Long" and 10 "Short" trades |
|
May 30, 2008 |
S&P 500 |
60-day |
4 "Long" and 3 "Short" trades |
|
May 23, 2008 |
S&P 500 |
60-day |
3 "Long" and 4 "Short" trades |
|
May 16, 2008 |
S&P 500 |
60-day |
4 "Long" and 3 "Short" trades |
|
May 9, 2008 |
NASDAQ 100 |
10-day |
10 "Long" and 10 "Short" trades |
|
May 2, 2008 |
S&P 500 |
15-day |
7 "Long" and 9 "Short" trades |
|
April 25, 2008 |
S&P 500 |
60-day |
7 "Long" and 8 "Short" trades |
|
April 18, 2008 |
S&P 500 |
15-day |
3 "Long" and 3 "Short" trades |
|
April 11, 2008 |
S&P 500 |
15-day |
4 "Long" and 5 "Short" trades |
|
April 4, 2008 |
NASDAQ 100 |
5-day |
7 "Long" and
6 "Short" trades |
|
March 28, 2008 |
S&P 500 |
60-day |
6 "Long" and
7 "Short" trades |
|
March 20, 2008 |
S&P 500 |
5-day |
3 "Long" and
4 "Short" trades |
|
March 14, 2008 |
S&P 500 |
5-day |
6 "Long" and 5 "Short" trades |
|
March 7, 2008 |
S&P 500 |
60-day |
9 "Long" and 9 "Short" trades |
|
February 29, 2008 |
S&P 500 |
60-day |
8 "Long" and 8 "Short" trades |
|
February 22, 2008 |
S&P 500 |
15-day |
4 "Long" and 5 "Short" trades |
|
February 15, 2008 |
S&P 500 |
60-day |
7 "Long" and 7 "Short" trades |
|
February 8, 2008 |
S&P 500 |
60-day |
6 "Long" and 6 "Short" trades |
|
February 1, 2008 |
S&P 500 |
60-day |
5 "Long" and 5 "Short" trades |
|
January 25, 2008 |
S&P 500 |
60-day |
5 "Long" and 5 "Short" trades |
|
January 18, 2008 |
S&P 500 |
60-day |
4 "Long" and 5 "Short" trades |
|
January 11, 2008 |
S&P 500 |
60-day |
5 "Long" and 5 "Short" trades |
|
January 4, 2008 |
S&P 500 |
60-day |
4 "Long" and 5 "Short" trades |
|
