simple trading system, sbv, s&p 500 chart, sp 500, index, chart example, trading system, This week SBV chart example is based on the 30-day SBV(20

This week SBV chart example is based on the 30-day SBV(20) S&P 500 chart and is a continuation of previous 30-day S&P 500 chart example on May 22, 2009.

More than 4% in a month on the S&P 500

Chart 1. Relationship between the SBV oscillator and index reversal points. S&P 500 index. 30-day view. 1 bar = 30 min. SBV(20)

1. Once the SBV indicator declines below negative signal level (the indicator will now show red), we enter a short position (if we are not already short);
2. Once the SBV indicator advances above negative signal level (after having been below that level), we will enter a long position (the indicator still shows red);
3. Once the SBV indicator rallies above positive signal level (the indicator will now show green), we enter a long position (if we are not already long);
4. Once the SBV indicator declines below positive signal level(after having been above that level), we will enter a short position (the indicator still shows green);
5. Additional Stop Loss Rule - If the SBV dropped into negative territory and started to rise without hitting the signal line, close the short position when the SBV is back in the positive territory, and stay in cash until a new buy signal is generated. Vise versa for a long position.

Note: The 20% level for the SBV indicator was determined in relation to the prevailing market conditions at the time the trading examples were selected. In order to establish the optimal critical levels for the SBV indicator, traders should consider the current market situation and review a chart history of prior volume surges including their magnitude (i.e., the level the SBV indicator reached).

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