Dow Index

This weeks 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 17, 2010 as well as examples on December
10, 2010 , October 16, 2010 , etc. +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 12/20/2010 Rule #2 Buy 11477 +60 +60
12/22/2010 Rule #4 Sell Short 11537 -25 -25 12/22/2010 Rule #3 Buy 11562 -4 -4
12/22/2010 Rule #4 Sell Short 11558 Total: +678 (+6.1%) +446 (+4.0%) Disclaimer:
The chart example is intended for educational purposes only and does not
constitute trading advice or make or imply any market trend prediction.