The Results Are Excellent

The power of system No. 2 is in the smart high-volume zone indicator. It is extremely easy to read the custom six color VSA bar charts and with the binary trend cycle analyser it’s never been easier to determine the trend direction.

The parts of the system

License Information Panel: your name, license code and other important information

Trend Bars: The four-color trend bars are the heart and soul of System No2. These provide excellent VSA visualisation so even traders with zero VSA knowledge can follow the signals easily. Light-gray bars indicate a standard bullish candle and dark-gray bars are standard bearish candles. Green bars mean strong bullish power (buy signal) while red bars mean strong bearish power (sell signal).

Trend Rainbow: The multi-color ribbon is an unique and smart trend filter. „Trend is your friend” – this is one of the basic and widely known concepts of the technical analysis. However unfortunately it is not just that easy, as identifying a trend in the beginning of it is one of the hardest tasks in chart analysis. The Trend Ribbon indicator is the best help in identifying a trend. We only buy above the Rainbow and only sell if the price is below the Rainbow.

MainTrend Indicator: The MainTrend Indicator is a smart step-histogram that shows the direction of the main, long-term trend.

SubTrend Indicator: The SubTrend Indicator is a smart step-histogram that shows the direction of the short-term trend cycles.

Volume Meter: The volume meter shows is a secondary confirmation tool that shows the strength of the signals.

Watermark: The Watermark helps traders to trade on different charts at the same time with showing the instrument’s name with capital letters. It can be a big help for anyone who prefers to switch the charts frequently.

The rules of the system

Buy Entry Rules:

1. The price is above the Trend Ribbon.
2. The MainTrend histogram is bullish (light color)
3. The SubTrend histogram is also bullish (light color)
4. A green TrendBar appears on the chart.
5. (As a secondary confirmation check that the VolumeMeter stripe for the entry bar is longer than for the previous bar.)

Sell Entry Rules:

1. The price is below the Trend Ribbon.
2. The MainTrend histogram is bearish (dark color)
3. The SubTrend histogram is also bearish (dark color)
4. A red TrendBar appears on the chart.
5. (As a secondary confirmation check that the VolumeMeter stripe for the entry bar is longer than for the previous bar.)

Safety Stop Loss:

Put your safety stop loss to the last high/low.

Exit Rules:

You can choose between 3 exit rules, please choose the one that fits to your trading style and money management better.

1. Exit with SL:TP 1:1 , eg if you put your SL to 40 pips, use a 40 pips TP (“automated” trading)
2. Exit when the volume becomes weak (the volume-meter shows tiny stripes)
3. Exit at the nearest round number level (eg 1.2200, 1.4600, etc)

Additional tips:

– You can re-enter every time the TrendBars signal as long as the entry confirmation tools support the entry.

– You can also use the Fibonacci lines as targets (or even find good stop loss zones with it).

– The system performs best on M30, H1, H4 charts, however it can be used on smaller timeframes too with reduced risk. Experience the different timeframes and currency pairs and find your favorites.

– If the Rainbow is very thin and the lines cross each other like a grid, it means the trend is ranging and entering into a trade can be risky.

Illustrations

Here we entered long when the green candle appeared because the price was above the TrendRainbow and both the MainTrend and SubTrend histograms were light color (bullish). We put the stop loss below the last low. Then we exited when the volume bars became insignificantly tiny and gained about 40 pips. Alternatively it is also possible to exit with SL:TP 1:1, in this case we would gain a 15 pips profit.

Here we got a sell signal and as both the MainTrend and SubTrend histograms were dark color (bearish). We put the safety Stop Loss to the other side of the Rainbow as the last high level was close. Finally we exited the trade when the volume bars became insignificantly tiny and gained about 215 pips. If we would have used the 1:1 SL:TP exit strategy here, then we would gain (a very quick and easy) 40 pips.

Of course not all signalled exits end entries are perfect all the time, but as the main concept of the system is to trade high-volume trend bars in the direction of the main trend, the strategy is very promising and has good performance.