STEP 2 - USE MECHANICAL BUY/SELL SIGNALS TO ENTER THE MARKET
The ProfitTrader Mechanical Buy/Sell signals are generally 70-90% accurate in their identification of cycle bottoms and tops.
When the trend is up, Mechanical Buy/Sell Signals in the Bressert Double Stochastic (blue setup bar; red entry dot) are taken at cycle bottoms, and sell signals (purple setup bar; red entry dot) are ignored or used to take profits. When the trend is down, Mechanical Sell Signals are taken at cycle tops and the Buy Signals ignored or used to lock in profits. When the weekly oscillator is moving up or is flat at a high level, the trend is up and we can buy the daily oscillator bottoms. When the weekly oscillator is moving down or is flat at a low level, we can sell the daily oscillator tops as the trading trend is down.

Chart 6 - When the weekly Double Stoc is rising, or flat at a high level, the trend is up; when it is declining or flat at a low level, the trend is down.

Plotting the weekly oscillator in the same panel as the daily oscillator gives us a visual representation of trend and trend reversals.

Chart 6 combines the daily Double Stoc with the weekly Double Stoc to show trend. The light blue oscillator line is the daily Double Stoc. The dark blue is the weekly Double Stoc. (Lines ABC are the same lines as in Chart 1. Line A is the Friday of the uptrend reversal week; line B is the Friday of the downtrend reversal week; line C shows the Friday of the uptrend reversal week.)
When the weekly oscillator is moving up, or at a high level, the Buy Signals generated by the daily oscillator (blue setup bar, red entry dot) should be taken; but in an uptrend, the Sell Signals (purple setup bar, red entry dot) should be ignored or used to take profits.
When the weekly oscillator is moving down, the Sell Signals should be used to short the market as the daily oscillator turns down generating the purple setup bar and red entry dot; but in a downtrend, the Buy Signals are ignored or used to take profits.
With the visual picture of trend shown by the weekly oscillator, our confidence level for trading in the direction of trend is greatly increased.

PT Users: When using the PT Trailing Stops, the Sell Signals can be turned off in a rising market; in a declining market, the Buy Signals can be turned off.

Chart 7 - When a market is in an uptrend and prices retrace back towards the green Dynamic Trend Indicator line, trading cycle bottoms can be bought with the oscillator generated Mechanical Buy Signals.

Chart 7 shows an uptrend with oscillator generated buy setup/entry bars. The blue buy setup bars are generated by the daily blue Double Stoc oscillator. The red price bars are generated by the red BLine oscillator not shown on this chart. The green Dynamic Trend Indicator line shows a strong uptrend from the trend reversal at the bottom of the chart. With the green DTI line rising, and the weekly oscillator bullish (as in Chart 6), the Mechanical Buy Signals at 1 and 2 are high probability Buy Signals with small dollar risk (entry dot to price low), and high profit potential. As prices approach the green DTI line, the market could have been bought with the Mechanical Buy Signals at 1 and 2.

Chart 8 - In a downtrend, when prices retrace back up towards the green Dynamic Trend Indicator, the cycle highs can be sold with the oscillator generated Mechanical Sell Signals.
Chart 8 shows how the short side would be traded with the EMA %Diff and MA %Diff showing a strong downtrend, and the green Dynamic Trend Indicator line also showing a downtrend. The weekly oscillator in Chart 6 (not shown in this chart) would also be showing a down market. As the daily Double Stoc oscillator rises to a high level, and prices approach the green DTI downtrend line, the oscillators turned down to generate Sell Signals at 4 and 5. The earlier Sell Signal 3 at the cycle top was a high risk trend reversal signal, not a trend following signal. But after prices dropped below the December lows in reversal week B to indicate a trend reversal, the lower cycle highs at 4 and 5 were low risk Sell Signals to be traded in the direction of trend. As the oscillators rise to a high level and prices test the green DTI downtrend line, sell signals are generated at 4 and 5.
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