The trading systems that scream from the roof about how good they are are honestly two bucks. Many systems promise you the moon on a stick – guaranteed! But often the reality falls far short of what was promised.
So when I come across a system that looks professional with less marketing, it catches my attention. Trend Signal is quietly building a good reputation in the trading community so I have made it a priority to review the software on behalf of my members.
The Trend Signal Package offers six indicators that you can combine to evaluate a potential trade. Each of these is automatically generated so all you have to do is figure out how to trade them together. Indicators work for all time frames and across all markets if there is sufficient liquidity (enough people trade in the market). Here are 6 indicators:
1. Price envelope: These work around the moving average of a stock or forex price. The most common price envelope is Bollinger Band or Keltner Channel. The reasoning behind them is similar to the law of averages, which says that everything revolves around an average or ‘normal’ state. Sometimes things go to extremes and you get activities that are much more than usual. When this happens, theoretically things slowly begin to return to normal. Price envelopes in trading revolve around a moving average with upper and lower bands. These upper and lower bands act like a stretched rope of a wrestling ring. Most of the price action will take place within the boundaries of the ring, but sometimes the price action takes extreme shape and hits the rope. The ropes are stretched so this extreme action is likely to result in a snap rebound. When this happens, you can use the price envelope to predict when a pullback will occur. Running on a rope like an American wrestler, the faster he hits, the faster he rebounds. The trend signal draws its own price envelope. The idea is to use them to identify points when the trend is likely to reverse or continue. The reversal of the trend at the bottom or top of the envelope offers the highest probability for rewards as they indicate that the price has reached volatile levels.
In the screenshot below you can see that the envelope at the top of the picture is running upwards, the moving average around the center (ending near 589) and the halfway point between the two marked by dotted lines.
2. Trend signal: This was the key indicator behind the software. There is a famous trading maxim that says “trend is your friend”. All is well, but how do you know when a new trend has started or an old one is about to end? Trading with trends can be very lucrative, but coming too early or too late can be devastating for your financial health. Trend signals help you identify trends in a simple index. When it changes from green to red, it indicates that a change in trend is imminent The trend signal sits at the bottom of the moving chart on a scale of 1 to 100. The line represents the mood of the market. The line itself turns green to represent the buying pressure and red to represent the selling pressure. The strategy is to take the signal when the trend signal turns from green to red and vice versa. The best signals are below 30 and above 70, the best signals are below 10 and above 90. The idea is that when the trend signal reaches a level as high as 90, the market buys a lot and is ready for a reversal. When the trend signal reaches a level like 10, the market sells out and is ready to bounce. It is therefore more valid to take a signal based on a change in color from red to green or vice versa.
3. Pivot point: Trend signals automatically draw horizontal lines known as pivot points. These are often based on previous heights and to represent potential future points that would reverse the trend. These pivot points can be very useful for setting stops or price targets. Prices usually stumble or tumble around these levels so that they can be incredibly effective.
4. Sniper Circles: These are the yellow circles drawn on the chart which represent a significant potential trend Conversely when trend signals detect the following:
- Being near a pivot point
- The trend signal is turning green or red.
- An inverted candlestick pattern.
Sniper Circles are relatively rare but collect 60% of high-profit businesses. The absence of a sniper circle does not mean that a trend will not be reversed
5. Vector average: It is a short term indicator compared to the trend signal and flickers from red to green and vice versa. The vector average is displayed with a value like a moving average. Green indicates and indicates uptrend while red indicates downward trend.
6. Step Stop: This indicator will follow the price up and down and adjust depending on the intensity of the trend. This stop is not perfect but a very useful guide.