Walter Bressert's ProfitTrader 7.0:
Trend Buy/Sell Signals

The Trend Buy/Sell Signals only generate entry signals in the direction of trend. This provides an initial entry signal with a very high probability of being a successful trade, and prevents you from trading against the trend.

The ProfitTrader Buy and Sell Signals are mechanically generated without consideration of trend. The ProfitTrader 7.0 Trend B/S Signals will only plot signals in the direction of trend as indicated by the EMA Trend Indicator. This will keep you in the market for longer-term moves, allowing add on positions in the direction of trend as new signals occur. However, if you are looking to take short-term profits or for trend reversals, the standard Buy/Sell Signals should also be plotted in a separate graph because they plot regardless of trend direction.

Chart 1 shows the blue 10DoubleStoc Setup and Buy Signals with the Trend Indicator acting as a filter to plot only Buy Signals in the up trending market. When the red line is above the blue, the trend is up and only Buy Signals are generated. Seven of the 11 entry signals would have been highly profitable.

Chart 2 shows only magenta 10DoubleStoc Setup and Sell Signals when the red EMA is below the blue (indicating a downtrend); two Buy Signals are shown that occurred when the red EMA was above the blue EMA. The trading trend for a short-term chart is generated by the direction of the dominant cycle in the next longer-term time frame. The trading trend for the daily chart is set by the cycle in the weekly chart. When the weekly cycle is moving down, the red EMA is most often below the blue EMA; when the weekly cycle is moving up the red EMA is most often above the blue EMA. The short-term/long-term cycle trend/EMA relationship to determine trend also applies to intraday charts.

Chart 3 also shows the Buy Signals that were generated by the standard 10DoubleStoc for the same time period shown in Chart No. 2. Of the 10 buy signals generated against the EMA direction (when the red EMA was below the blue EMA), only two would have been profitable.

The Buy/Sell Signals are generated only in the direction of trend.
The old adage "trade with the trend; if it is up, buy the dips; if it is down, sell the rallies" is now applicable with the Trend Buy/Sell Signals. The trend is set by the EMA Trend Indicator -- the dips are cycle bottoms; the rallies, cycle tops.

END - Close this window to return to Additional Top and Bottom Indicators page.