DJI Index

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This week's SBV chart example is based on the 30-day SBV(20) Dow Jones Industrials (^DJI) chart and this chart is a continuation of the DJI chart example that was published on December 10, 2010. +6% on the DJI 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: 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); 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); 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); 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); 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. Table 1: Trades based on the 5-rule system. Time Motivation Signal Index Profit(points) 100 points Stop-Loss No Stop-Loss 10/21/2010 Rule #4 Sell Short 11147 +16 +16 10/22/2010 Rule #2 Buy 11131 +44 +44 10/25/2010 Rule #4 Sell Short 11175 +49 +49 10/27/2010 Rule #2 Buy 11126 -33 -33 10/29/2010 Rule #4 Sell Short 11093 -27 -27 10/29/2010 Rule #3 Buy 11120 +58 +58 11/01/2010 Rule #4 Sell Short 11178 -10 -10 11/02/2010 Rule #5 Cash 11188 11/03/2010 Rule #2 Buy 11198 +186 +186 11/08/2010 Rule #4 Sell Short 11384 +36 +36 11/10/2010 Rule #2 Buy 11348 -80 -80 11/10/2010 Rule #5 Cash 11268 11/15/2010 Rule #2 Buy 11270 -100 -196 11/16/2010 Rule #4 Sell Short 11074 +84 +84 11/17/2010 Rule #2 Buy 10990 +178 +178 11/19/2010 Rule #5 Cash 11168 11/23/2010 Rule #2 Buy 11029 +81 +81 11/26/2010 Rule #4 Sell Short 11110 +57 +57 11/29/2010 Rule #2 Buy 11053 -47 -47 11/30/2010 Rule #4 Sell Short 11006 -100 -238 12/01/2010 Rule #3 Buy 11244 +102 +102 12/03/2010 Rule #4 Sell Short 11346 -36 -36 12/03/2010 Rule #5 Cash 11382 12/07/2010 Rule #4 Sell Short 11408 +64 +64 12/09/2010 Rule #2 Buy 11344 +151 +151 12/14/2010 Rule #4 Sell Short 11495 -15 -15 12/15/2010 Rule #5 Cash 11510 12/16/2010 Rule #2 Buy 11493 -19 -19 12/17/2010 Rule #1 Sell Short 11474 0 0 12/17/2010 Rule #2 Buy 11474 +20 +20 12/17/2010 Rule #5 Cash 11494 Total: +657 (+5.9%) +425 (+3.8%) 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. Disclaimer: The chart example is intended for educational purposes only and does not constitute trading advice or make or imply any market trend prediction.

DJI Index