Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is another example of the Swing Projector’s Type #1 Buy Signal. In this example we will use the 5 minute chart for the Dow index symbol $INDU. The Type #1 Buy Signal uses momentum divergence and the MarketWarrior Swing Projector. In this example I am using the indicators, Detrend Momentum and the Smoothed Stochastic which are seen on the chart below. I will describe the Type #1 buy signal in the steps shown below.
1) On the first chart below the bottoms B1 and B2 identify two bottoms in the price and two related bottoms in the momentum indicators. You can see that B2 is a higher bottom in the price but B2 is a lower bottom in the momentum indicators. This is a momentum divergence that indicates the market is holding strong while the momentum falls. This indicates the market should move up and make a new higher swing top.
2) Second, while the momentum divergence in step 1 is occurring, the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a bottom is the red upward triangle with a “B” inside. On the chart below, you can see this setup at bottom B2.
3) The final step is to see the price start to move upward away from the Warning Pivot Symbol. When the price starts to turn up, the buy signal is given and you would look for an opportunity to buy long.
Type #1 Buy Signal
The chart below shows what happened after the Type #1 Buy Signal was given. You can see the 5 minute chart for $INDU formed an upward swing.
Type #1 Buy Signal
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is another example of the Swing Projector’s Type #4 Buy Signal. In this example we will use the 60 minute chart for the 30 Year Bond which is eSignal symbol $TYX. The Type #4 Buy Signal uses two indicators, the MarketWarrior Swing Projector and the ADX. I will describe the Type #4 buy signal in the three steps shown below.
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1) First, the ADX need to be at a high value. Normally this would be above the ADX Trend Level. We would also like to see the ADX start to turn down and begin to make a top. This setup is shown on the chart below.
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2) Second, while step 1 is occurring, the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a bottom is the red upward triangle with a “B” inside. On the chart below, you can see this setup. The ADX is making a top above the Trend Level and a Warning Symbol has occurred.
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3) The final step is to see the price start to move upward away from the Warning Pivot Symbol. When the price starts to turn up, the buy signal is given and you would look for an opportunity to buy long.
Type #4 Buy Signal
The chart below shows what happened after the Type #4 Buy Signal was given. You can see the 60 minute chart for $TYX formed an upward swing.
Type #4 Buy Signal
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is another example of a Swing Projector Type #4 Sell Signal. This example uses a 30 minute chart for $XAU, the Gold/Silver index. The Type #4 Sell Signal uses two MarketWarrior indicators, the Swing Projector and the ADX. The charts below show both indicators applied. There are three steps involved with this sell signal. I am going to describe each step below.
1) The first step in the Swing Projector Type #4 Sell Signal sees the ADX move above the Trend Level and up to a high level in relation to the previous ADX values. On the chart below, the ADX is above the Trend Level but is not quite at the highest levels seen on the chart. We would also like to see the ADX start to turn down and begin to make a top. In this example the ADX is starting to turn down.
2) Second, while step 1 is occurring, the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a top is the red downward triangle with a “T” inside. On the chart below, you can see this setup. The ADX is making a top above the Trend Level and a Warning Symbol has occurred.
3) The final step is to see the price start to move down away from the Warning Pivot Symbol. This has not occurred yet. Because the ADX is not at the highest levels in relation to the recent past, the final step where the price will turn down may not occur until some time on Oct 30 or Oct 31. When the price starts to turn down, the sell signal will be given.
Type #4 Sell Signal
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The Type #4 Sell Signal uses the Swing Projector and the ADX. The charts below show the 1 minute chart for Apple Inc. Both indicators have been applied to these charts. When using a stock with less activity, it may be necessary to use a 5, 10 or 15 minute chart. This sell signal will be described as steps to make the process you are looking for as clear as possible.
1) First, the ADX needs to be at a high value. Normally this would be above the ADX Trend Level. We would also like to see the ADX start to turn down and begin to make a top.
2) Second, while step 1 is occurring, the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a top is the red downward triangle with a “T” inside. On the chart below, you can see this setup. The ADX is making a top above the Trend Level and a Warning Symbol has occurred.
3) The final step is to see the price start to move down away from the Warning Pivot Symbol. When the price starts to turn down, the sell signal is given and you would look for an opportunity to sell short. On the chart below I have used the label “Top #1″ so you can identify this same top on the next chart.
Type #4 Sell Signal
The chart below shows what happened after the Type #4 Sell Signal described on the previous chart. The label “Top #1″ is the same on the chart below as on the previous chart. This shows that the market fell after the sell signal at “Top #1″ was given. The label “Top #2″ identifies where the next Type #4 Sell Signal was given. At Top #2 the ADX is above the Trend Level and is starting to make a top. The Swing Projector is also showing a top Warning Pivot Symbol. When these two events occur together, the Type #4 Sell Signal is given.
Type #4 Sell Signal
The final chart below shows the label “Top #2″ to identify the same top with this label on the previous chart. This “Top #2″ is where the Type #4 sell Signal was given. After the sell signal was given, the market had a swing back up to the price levels of “Top #2″ but then fell quite a large amount.
Type #4 Sell Signal
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
In this example we are going to work with two indicators. The Swing Projector and the ADX. The ADX is an indicator which may not work in thinly traded markets. In this example we will be using the 1 minute chart for Apple Inc. symbol AAPL because this market has a large amount of activity on the 1 minute chart. In other markets you may need to use the 5, 10 or 15 minute chart. To make this as clear as possible, I will describe the Type #4 buy signal as a series of steps that represent what you are looking for to identify the buy signal.
1) First, the ADX need to be at a high value. Normally this would be above the ADX Trend Level. We would also like to see the ADX start to turn down and begin to make a top.
2) Second, while step 1 is occurring the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a bottom is the red upward triangle with a “B” inside. On the chart below you can see this setup. The ADX is making a top above the Trend Level and a Warning Symbol has occurred.
3) The final step is to see the price start to move up away from the Warning Pivot Symbol. When the price starts to turn up, the buy signal is given and you would look for an opportunity to buy long.
Type #4 Buy Signal
The chart below shows what happened after the Type #4 Buy Signal was given. You can see the 1 minute chart for Apple formed an upward swing.
Type #4 Buy Signal
end.
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
In this example we are going to work with a daily chart for the December 2009 Globex Eurodollar contract. The Type #3 Sell Signal uses two MarketWarrior indicators: the Swing Projector and the Gann Angle Fan. The chart below shows the Gann Angle Fan starting from the Eurodollar low in June 2008. This chart is set to a fixed price time scale of 1 bar to 0.05. This same fixed value is used for the Gann Angles, so the Gann 1×1 angle moves up at a slope of 0.05 per bar.
I will describe the Swing Projector Type #3 Sell Signal in terms of 5 steps that a trader can watch for.
1) First, the Gann angle must starts up from a bottom.
2) Second, the price must have fallen below a Gann angle. I prefer to use one of the three primary Gann angles which are the 2×1, 1×1 and 1×2 angles but the other Gann angles can be used.
3) Third, the price then must move from below the Gann angle, back up to the Gann angle.
4) Fourth, while step 3 is occurring the Swing Projector must be showing the Warning Pivot Symbol. The Warning Pivot Symbol for a top is the red downward triangle with a “T” inside. On the chart below I have draw the labeled “A1″ and drawn an arrow pointing to where step 3 and 4 are occurring. The label “A1″ identifies where the price has moved up to the Gann angle and the Swing Projector is showing a large swing Warning symbol.
5) The fifth and final step is simply to see the price turn down and fall away from the Gann angle. When you see this final event you should look for an opportunity to sell short.
On the chart below the sell signal has just been given. The price should now see a downward swing which is appropriate for a swing trader so sell short and trade profitably.
Type #3 Sell Signal
end.
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here we will discuss the Type #2 Buy Signal for the Swing Projector. Below are two charts for the Dow Industrial Average using eSignal symbol $INDU. This buy signal uses two indicators: the MarketWarrior Swing Projector and the Bollinger Plus.
The Type #2 Buy Signal has four parts. First, a sideways movement in the price action must occur. On the first chart below, I have drawn a box around this sideways price action and labeled it, “Sideways Movement”.
Second, the Swing Projector, “Warning Pivot Symbol” must occur. The Swing Projector warning symbol indicates the conditions for a bottom have been met, and you should start watching for a bottom pivot. This warning symbol is the red upward triangle with the letter “B” inside.
The third part of this buy signal occurs when the price action moves below the bottom line in the Bollinger Plus.
The fourth and final part of this buy signal occurs when the price rallies back above the Bollinger Plus bottom line. When these four events occur, the Swing Projector Type #2 Buy Signal has occurred and you should look for the best opportunity to buy long.
Type #2 Buy Signal
The next chart shows what happened after the Type #2 Buy Signal was given. It took a few bars to show that the price had turned up but then the price continued to move up through the end of the day. The goal of this buy signal is to find swings that are large enough for a swing traders to trade profitably. You can see that after this Type #2 Buy Signal there was plenty of opportunity to enter a long position.
Type #2 Buy Signal
end.
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
This discussion uses two charts of the 5 minute DJIA symbol $INDU to explain the Swing Projector Type #2 Sell Signal. This sell signal uses two indicators: the MarketWarrior Swing Projector and the Bollinger Plus. The first chart below shows these two indicators applied to the 5 minute chart.
The Type #2 Sell Signal has four parts. First a sideways movement in the price action must occur. I have drawn a box around this sideways price action and labeled it “Sideways Movement”.
Second, the Swing Projector “Warning Pivot Symbol” must occur. The Swing Projector warning symbol indicates that the conditions for a top have been met and you should start watching for a top pivot. This warning symbol is the red downward triangle with the letter “T” inside.
The third part of this sell signal occurs when the price action moves above the top line in the Bollinger Plus.
The fourth and final part of this sell signal occurs when the price falls back below the Bollinger Plus top line. When this four sequence of events occurs the Swing Projector Type #2 Sell Signal has occurred and you should look for the best opportunity to sell short.
Type #2 Sell Signal
The next chart shows what happened after the Type #2 Sell Signal was given. It took several bars before it was apparent the price had turned down and then the price moved down quite a bit. The goal of this sell signal is to find swings that are large enough for a swing traders to trade profitably. You can see that after this Type #2 Buy Signal there was plenty of opportunity to enter a short position.
Type #2 Sell Signal
end.
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
In this discussion I will describe the Type #1 Buy Signal when using the swing Projector. The Type #1 Buy Signal consists of two components. First is a Swing Projector Warning symbol, and second a bullish divergence in a momentum indicator.
Below is a 5 minute chart for the DJIA, the eSignal symbol is $INDU. On this chart I have applied the Swing Projector and the indicator named “Stochastic of RSI” which is a momentum indicator. On this chart I have labeled two bottom pivots as “B1″ and “B2″. When we compare the price and the momentum indicator, we can see that B2 is lower than B1 on the price, but B2 is higher than B1 on the Stochastic of RSI. This shows that the price was losing strength at B2 while the momentum indicator diverged and was gaining strength at B2. This is Bullish Divergence and indicates the B2 bottom in the price should turn upward and form an upward swing good for swing trading.
Now notice at the B2 bottom, there is a Swing Projector Warning symbol for a large pivot bottom. This is the red upward triangle with the letter “B” inside. When we see these two items together they form the Type #1 Buy Signal. Somewhere after B2 we would be looking for an opportunity to buy long and trade the next upward swing.
Type #1 Buy Signal
The next chart shows what happened after the Type #1 Buy Signal was given. You can see that after the B2 bottom, the next upward swing was a very good up move for a swing trader to try and trade.
Type #1 Buy Signal
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
This article is a follow up to our previous article discussing the Swing Projector and volatility patterns. This volatility pattern consists of two large swings. The first swing has high volatility and the second swing has low volatility. In yesterday’s article the high volatility swing moved downward and the low volatility swing moved upward. Today we will show the opposite pattern. The chart below is a 5 minute chart for the December 2009 Globex Eurodollar.
On this chart there is a swing that moves from a large swing bottom to a large swing top, and I have labeled all the small swings 1 to 5. There are 5 small swing tops and 5 small swing bottoms also labeled 1, 2, 3, 4 and 5. These small swings show that the large swing has a high degree of volatility. After this high volatility swing, the next large swing downward identified by the Swing Projector had no small reversal swings.
The chart below shows the swing downward, which occurred after the high volatility swing up, moved consistently in one direction with no significant reversals. This pattern offers the trader an opportunity to see the high volatility swing and then trade the low volatility swing. The low volatility swing in this pattern represents the easiest type of swing to trade because there are no small reversals to hit a trader’s stop orders until the swing is actually complete.
SP Volatility Pattern
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