Tuesday 5 February 2008

Re-entry Using Trend Lines, Volume and Hilbert Sine Wave

Trend lines, volume climax and Hilbert Sine Wave charts today that show 3 different ways to re-enter a strongly trending market. I was lucky and got short in after hours yesterday at 1,379 using the Better TRIN Indicator System. Most day traders woke up to a 20 point gap down in the Emini. So how could you re-enter?

My favorite leading indicators are trend lines, volume and the Hilbert Sine Wave. The 3 charts below show how they signaled short re-entry points.

Emini Trend Line Image

Trend Line Re-Entry (Emini 699 tick)

 

Emini Volume Climax Image

Volume Climax Re-Entry (Emini 2,097 tick)

 

Emini Hilbert Sine Wave Image

Hilbert Sine Wave Re-Entry (Emini 2,097 tick)

Trend lines and Congestion zones gave the least number of signals but were the most accurate (i.e. least amount of "heat" or draw down). Volume climax gave the most number of signals are tended to lead price action - volume is truly a leading indicator. Lastly, the Hilbert Sine Wave signals were mixed, with one early, one on time and one late. This shows that the Hilbert Sine Wave works best on range bound conditions.

The secret is to use non-correlated indicators for signals, so using 2 or 3 of the above would give you the best mix of accuracy and number of signals.

If you're interested in learning about the automatic trend line indicator I use and Congestion zones, check out the trend line video I recently uploaded.

Good luck with your Emini trading.

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