This week's SBV chart example is based on the 30-day SBV(20) S&P 500 (^SPX) chart.

+6% on the S&P 500 in a month

Chart 1. Relationship between the SBV Oscillator and
index reversal points. S&P 500 index. 30-day view. 1 bar = 30 minutes. SBV(20)

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

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: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

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.

This week's SBV chart example is based on the 5-day SBV Histogram(14,9) S&P 500 index (^SPX) chart.

24 points on the S&P 500 in a week

Chart 1. Relationship between the SBV Oscillator and index reversal points.
S&P 500 index. 5-day view. 1 bar = 5 minutes. SBV Histogram(14,9)

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

1. Once the SBV Histogram has advanced above zero level (after having been below that level), we will enter a long position;
2. Once the SBV Histogram has fallen below a zero level (after having been above that level), we will enter a short position;

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

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

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.

This week's SBV chart example is based on the 30-day SBV(20) Dow Jones Industrials (^DJI) chart.

+7% on the DJI in a month

Chart 1. Relationship between the SBV Oscillator and
index reversal points. DJI index. 30-day view. 1 bar = 30 minutes. SBV(16)

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

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: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

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.

+10 points on the S&P 500

1 point on the S&P 500 = $50 on S&P 500 emini

10 points on the S&P 500 = $500 on S&P 500 emini

10 points = $5,000 on 10 emini contracts

This week's SBV chart example is based on the 1-day S&P 500 chart and SBV Histogram. This week's SBV example is a continuation of the S&P 500 chart examples of February 12, 2010 - the same chart setting, the same indicators and the same rules were used.

Chart 1. Trailing stop applied to signals generated by SBV Histogram.
S&P 500 index. 1-day view. 1 bar = 1 min. SBV Histogram(14,9)

It's Simple and profitable

The difference between the SBV Oscillator and the SBV Histogram is that the SBV Oscillator uses a horizontal signal line and, as a rule, signals are generated when the SBV Oscillator crosses a certain signal level (20% for instance). In the case of the SBV Histogram, the signal line is an exponential moving average that generates a signal when the SBV Oscillator intersects the signal line (when the Histogram = 0). Furthermore, 4-rule simple trading system (detailed 4-rule system description with explanation of used rules could be found in our "SBV Trading System" tutorial) would be modified into two rules trading system:

1. Once the SBV Histogram has advanced above zero level (after having been below that level), we will enter a long position;
2. Once the SBV Histogram has fallen below a zero level (after having been above that level), we will enter a short position;
3. Additional Trailing Stop Rule - Close a long trade when price droppers down 1 point and close a short trade if price moves up 1 point.

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+15 points on the S&P 500

1 point on the S&P 500 = $50 on S&P 500 emini

10 points on the S&P 500 = $500 on S&P 500 emini

10 points = $5,000 on 10 emini contracts

This week's SBV chart example is based on the 1-day S&P 500 chart and SBV Histogram.

Chart 1. Trailing stop applied to signals generated by SBV Oscillator.
S&P 500 index. 1-day view. 1 bar = 1 min. SBV Histogram(20,14)

It's Simple and profitable

The difference between the SBV Oscillator and the SBV Histogram is that the SBV Oscillator uses a horizontal signal line and, as a rule, signals are generated when the SBV Oscillator crosses a certain signal level (20% for instance). In the case of the SBV Histogram, the signal line is an exponential moving average that generates a signal when the SBV Oscillator intersects the signal line (when the Histogram = 0). Furthermore, 4-rule simple trading system (detailed 4-rule system description with explanation of used rules could be found in our "SBV Trading System" tutorial) would be modified into two rules trading system:

1. Once the SBV Histogram has advanced above zero level (after having been below that level), we will enter a long position;
2. Once the SBV Histogram has fallen below a zero level (after having been above that level), we will enter a short position;
3. Additional Trailing Stop Rule - Close a long trade when price droppers down 1 point and close a short trade if price moves up 1 point.

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+12 points on the Russell 2000

1 point on the Russell 2000 = $100 on Russell 200 emini

5 points on the Russell 2000 = $500 on Russell 200 emini

10 points = $10,000 on 10 emini contracts

This week's SBV chart example is based on the 1-day Russell 2000 chart and SBV Histogram. This week's SBV example is a continuation of the Russell 2000 chart examples of January 22, 15 and 8, 2010. This example continues to illustrate that the simple trading system continue to work in any market. The same chart setting, the same indicators and the same rules were used a month ago when we had bullish market. Now, in bearish market, the system continue to deliver amassing returns.

Chart 1. Trailing stop applied to signals generated by SBV Oscillator.
Russell 2000 index. 1-day view. 1 bar = 1 min. SBV Histogram(20,14)

It's Simple and profitable

The difference between the SBV Oscillator and the SBV Histogram is that the SBV Oscillator uses a horizontal signal line and, as a rule, signals are generated when the SBV Oscillator crosses a certain signal level (20% for instance). In the case of the SBV Histogram, the signal line is an exponential moving average that generates a signal when the SBV Oscillator intersects the signal line (when the Histogram = 0). Furthermore, 4-rule simple trading system (detailed 4-rule system description with explanation of used rules could be found in our "SBV Trading System" tutorial) would be modified into two rules trading system:

1. Once the SBV Histogram has advanced above zero level (after having been below that level), we will enter a long position;
2. Once the SBV Histogram has fallen below a zero level (after having been above that level), we will enter a short position;

By going into lower timeframe you should remember that SBV simple trading system would generate more signals, furthermore, the odds of lost trades are higher. Because of that, it would be logical to set tighter stop-loss strategy which would help to reduce loses and protect profit. You have to bear in mind that, form one side, any stop-loss strategy protects a system from big losses and secures the profit. From other side, there will be trades with missed profit. Furthermore, the same as in previous week's chart example, we used 0.3 point trailing stop rule in our trading system:

3. Additional Trailing Stop Rule - Close a long trade when price droppers down 0.3 points and close a short trade if price moves up 0.3 points.

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Stop-Loss Level and Volatility

If you compare current chart example with similar Russell 2000 chart examples we published in January 2010 you may notice that the main difference is that in January 2010 all major trends within a single session were caught by SBV Histogram. In the current chart example we have all major intraday trends caught as well, yet, in some cases 0.3 point stop-level (which worked very nice a month ago) did not allow to achieve greater profit from stronger intraday trends. Still the system has generated the amazing result.

The difference between the current market and the market a month ago is that the volatility level is much higher now. General theory of technical analysis states that in order to achieve better results, stop-loss should be adjust to the volatility - the more volatile market the wider stop-loss should be. In more volatile market intraday trends are stronger, yet they are more volatile. Wider stop in volatile market is more risky, yet it may allow to avoid choppy trading and receive potentially higher profit from intraday trends.

For volatility monitoring we recommend using ATR Or Bollinger Bandwidth.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+41 points on the S&P 500 in a week

This week's SBV chart example is based on the 5-day SBV(20) S%P 500 chart. This week's SBV example is a continuation of the S&P 500 chart example of December 18, 2009. This example continues to illustrate this rule in practice:

Chart 1. Relationship between the SBV Oscillator and
index reversal points. S&P 500 index. 5-day view. 1 bar = 5 min. SBV(20)

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 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.

Adding a Stop-Loss to the system may substantially reduce losses and, in some cases, even double the summary profit.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+11 points on the Russell 2000

1 point on the Russell 2000 = $100 on Russell 200 emini

5 points on the Russell 2000 = $500 on Russell 200 emini

10 points = $10,000 on 10 emini contracts

This week we have introduced SBV Histogram - advanced version of SBV Oscillator. Last week's chart example was based on the the 1-day SBV(20) Russell 2000 chart. To illustrate how SBV Histogram could be used, this week's chart example has the same timeframe, the same index, the same trailing stop level and the same bar period for SBV. The only difference is that we used SBV Histogram instead of SBV Oscillator.

In the example below we added a simple trailing stop to the system.

Chart 1. Trailing stop applied to signals generated by SBV Oscillator.
 Russell 2000 index. 1-day view. 1 bar = 1 min. SBV(16)

It's Simple and profitable

The difference between the SBV Oscillator and the SBV Histogram is that the SBV Oscillator uses a horizontal signal line and, as a rule, signals are generated when the SBV Oscillator crosses a certain signal level (20% for instance). In the case of the SBV Histogram, the signal line is an exponential moving average that generates a signal when the SBV Oscillator intersects the signal line (when the Histogram = 0). Furthermore, four rules simple trading system (detailed 4-rule system description with explanation of used rules could be found in our "SBV Trading System" tutorial) would be modified into two rules trading system:

1. Once the SBV indicator has advanced above zero level (after having been below that level), we will enter a long position;
2. Once the SBV indicator has fallen below a zero level (after having been above that level), we will enter a short position;

By going into lower timeframe you should remember that SBV simple trading system would generate more signals, furthermore, the odds of lost trades are higher. Because of that, it would be logical to set tighter stop-loss strategy which would help to reduce loses and protect profit. You have to bear in mind that, form one side, any stop-loss strategy protects a system from big losses and secures the profit. From other side, there will be trades with missed profit. Furthermore, the same as in previous week's chart example, we used 0.3 point trailing stop rule in our trading system:

3. Additional Trailing Stop Rule - Close a long trade when price droppers down 0.3 points and close a short trade if price moves up 0.3 points.

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Index Or Emini charts?

We consider that index charts are more suitable for e-mini trading then e-mini charts. As an example, SP emini tracks the S&P 500 index and if the technical indicators applied to the index point to the trend reversal we think that SP emini would rather follow the index trend even if the same technical indicators applied to emini would point in opposite direction.

While index and emini price has the same trend and price based technical indicators applied to emini and index would generate the similar signals, in case with volume based technical indicators you may have different signals because index volume covers volume of all stocks from the index basket and emini volume covers only emini. In addition volume on emini depends on the time to the expiration and this affect volume based indicators as well.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+10 points on the Russell 2000

1 point on the Russell 2000 = $100 on Russell 200 emini

5 points on the Russell 2000 = $500 on Russell 200 emini

10 points = $10,000 on 10 emini contracts

This week's SBV chart example is based on the 1-day SBV(16) Russell 2000 chart.

By going into lower timeframe you should remember that SBV simple trading system would generate more signals, furthermore, the odds of lost trades are higher. Because of that, it would be logical to set tighter stop-loss strategy which would help to reduce loses and protect profit. You have to bear in mind that, form one side, any stop-loss strategy protects a system from big losses and secures the profit. From other side, there will be trades with missed profit.

Before applying any strategy into real trading it is recommended to test it on the chart. All settings in our example are for educational purposes only to show how our indicators could be used. You may scroll our charts back in history and test various chart setting to see which one would fit your personal trading.

In the example below we added a simple trailing stop to the system.

Chart 1. Trailing stop applied to signals generated by SBV Oscillator.
 Russell 2000 index. 1-day view. 1 bar = 1 min. SBV(16)

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 has fallen below a negative signal level (the indicator will now show red), we will enter a short position (if we are in long position);
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 in short position);
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 Trailing Stop Rule - Close a long trade when price droppers down 0.3 points and close a short trade if price moves up 0.3 points.

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

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Index Or Emini charts?

We consider that index charts are more suitable for e-mini trading then e-mini charts. As an example, SP emini tracks the S&P 500 index and if the technical indicators applied to the index point to the trend reversal we think that SP emini would rather follow the index trend even if the same technical indicators applied to emini would point in opposite direction.

While index and emini price has the same trend and price based technical indicators applied to emini and index would generate the similar signals, in case with volume based technical indicators you may have different signals because index volume covers volume of all stocks from the index basket and emini volume covers only emini. In addition volume on emini depends on the time to the expiration and this affect volume based indicators as well.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).

+4.8 points on the Russell 2000

1 point on the Russell 2000 = $100 on Russell 200 emini

5 points on the Russell 2000 = $500 on Russell 200 emini

5 points = $5,000 on 10 emini contracts

This week's SBV chart example is based on the 1-day SBV(16) Russell 2000 chart.

We constantly receiving emails from our subscribers on applying SBV Oscillator on lower timeframes. By going into lower timeframe you should remember that SBV simple trading system would generate more signals, furthermore, the odds of lost trades are higher. Because of that, it would be logical to set tighter stop-loss strategy which would help to reduce loses and protect profit. You have to bear in mind that, form one side, any stop-loss strategy protects a system from big losses and secures the profit. From other side, there will be trades with missed profit.

Before applying any strategy into real trading it is recommended to test it on the chart. All settings in our example are for educational purposes only to show how our indicators could be used. You may scroll our charts back in history and test various chart setting to see which one would fit your personal trading.

In the example below we added a simple trailing stop to the system.

Chart 1. Trailing stop applied to signals generated by SBV Oscillator.
 Russell 2000 index. 1-day view. 1 bar = 1 min. SBV(16)

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 has fallen below a negative signal level (the indicator will now show red), we will enter a short position (if we are in long position);
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 in short position);
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 Trailing Stop Rule - Close a long trade when price droppers down 0.3 points and close a short trade if price moves up 0.3 points.

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

Adding a Stop-Loss to the system may substantially reduce losses and even double the summary profit. See details of the trades generated by our simple trading system in the table below.

Index Or Emini charts?

We consider that index charts are more suitable for e-mini trading then e-mini charts. As an example, SP emini tracks the S&P 500 index and if the technical indicators applied to the index point to the trend reversal we think that SP emini would rather follow the index trend even if the same technical indicators applied to emini would point in opposite direction.

While index and emini price has the same trend and price based technical indicators applied to emini and index would generate the similar signals, in case with volume based technical indicators you may have different signals because index volume covers volume of all stocks from the index basket and emini volume covers only emini. In addition volume on emini depends on the time to the expiration and this affect volume based indicators as well.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time that 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 the history of prior volume surges, including their magnitude (i.e., the level that the SBV indicator reached).