Additional Top and Bottom Indicators

Most cycles top and bottom when a market is overbought or oversold. While the BLine and Double Stoc oscillators show these extremes when the oscillators are above 90 and below 10, the Keltner Bands and Real-Time Detrend will often show the extremes a market can reach. When the oscillators are overbought/oversold and the markets reach the extremes indicated by the Keltner Bands and Detrend, a trading signal in the opposite direction will frequently confirm a cycle top or bottom.


The Cycle Top and Bottom ID and the %A Indicator
The Cycle Top and Bottom ID Indicator in combination with the %A (for Accuracy) Indicator allows you to see how cycle tops and bottoms (Chart 1) occur at oscillator turning points (Chart 2), and to evaluate the ProfitTrader Buy/Sell Signals to determine your odds of making money in any market, any time frame (Chart 3).

The higher the %A, the more likely an entry is to be followed by a profitable move. The higher the %A, the greater your odds are of making money using a trading signal generated by an oscillator. Consideration of trend direction is necessary as trading against the trend will often result in a quick move in the direction of the oscillator followed by a sharp reversal.
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Keltner Bands
Keltner Bands are standard deviation based channels that often provide support/resistance at the channels or the center line. Keltner Bands are an excellent analytical trading tool to determine support and resistance levels in trending markets and to identify support/resistance levels and breakouts of congestion ranges. A Keltner Band is based on a 45-day moving average (day, week, month, intraday price bar, etc.), and a standard deviation move away from the 45-bar based on the average true range.

Combining Keltner Bands with the timing of cycles, the Bressert Double Stoc, and other technical indicator gives you price objectives for tops and bottoms, and support and resistance levels for trend reversals. The accuracy of top and bottom identification is greatly increased.

The Keltner Bands default to cyan bands above and below price activity.

Real-Time Detrend
The Real-Time Detrend shows cycle tops and bottoms by subtracting a moving average one-half the length of the trading cycle for the price bar. To see highs and lows for a 20-day cycle, insert 10 into the Average Length Input.

This indicator can be used with the oscillators to help pinpoint cycle bottoms and tops.

The Real-Time Detrend subtracts a moving average one-half the length of the cycle from the price bar.