Smart Volume Spread Analysis Shakeouts (When is a signal not a signal part 2)
I had a discussion with a client earlier about this type of observation on volume spread analysis shakeouts and how you can very easily change the way you “see” things on a chart using Smart Volume Spread Analysis, and how a simple observation about a signal can completely transform your trading and your trading results.
Continuing on from our last article “When is a Signal Not a Signal” I want to discuss a favorite signal of mine and how easy it can be to trade successfully.
Take a look at the following screenshot.
I only include a few examples to keep it simple for the article. Smart is real-time so you can follow along very easily and know exactly what’s going to happen in the markets you trade. It’s very simple and only takes a short time to master… literally.
The screenshot shows a few examples of one signal you would take vs one you would not. Aside from the real-time tools that tell you which is worth taking you can easily see just noting the differences which worked and which did not. Can you see the difference?
Click to enlarge
The “squat” ones are the ones that get you in at the start of a nice reversal.
The other is an extremely wide range bar. These will generally fail as shown clearly on this example.
The first example of a “squat shakeout” trading signal to signal (which is one of my favorite methods for Smart Volume Analysis trading) you would have been exited at the red bar for about 230 pips in a single trade on the volume spread analysis shakeout on this chart. Start adding other charts and you get a pretty good idea what is possible when using Smart Volume Analysis Software.
As a user of our software and methods/concepts you already know these trades would have been taken or not based on the adviser warnings but it helps to see why these work or not just using your eyes to find them.
This is the daily chart but the same can be seen with minimal effort on any time frame. Take a look at any signal on any chart and you’ll start to see things like this over and over. This type of exercise is demonstrated in the “classic” chart time exercises within the documents area.
As always if you have any questions about the smart volume spread analysis shakeouts discussed in this article, or our volume spread analysis software, please contact me using the support link on our website.
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