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The Trend Change Index

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The Trend Change Index.

What is the Trend Change Index? The TC Index is a filter that tells you if the price action of the bar on your bar chart is bullish or bearish. When the bar is bullish is turns green, when the bar is bearish it turns yellow. Are all bars bullish or bearish, what about a sideways market? If the bar is green before the market goes sideways then the bar will stay green. If the bar is yellow in a down trending market then it will stay yellow until the market turns bullish which will change the color of the bar to green.

 

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How do I trade the Trend Change Index? Let's start with a long trade, a trade where you buy the contract. Simply buy a few ticks above the high of the first green bar after the bars have been yellow, Notice point [1] above the TC Index is telling you when the trend is changing. We can expect a change in trend at a Long term 2 low coming in with the Medium term 5 low at the Intermediate 4 low. Add a few ticks to the high of the first green bar or wait for two green bars and then buy the high of the second green bar on the next trading day. Call your broker before the market opens and place a buy stop. If the market goes through your buy stop you are long. Place a protective stop below the low of the previous yellow bar.

At [2] our protective stop moves to the next set of yellow bars, set the stop a few ticks below the low of the first yellow bar. We get stopped out of our long trade on the second yellow bar. Our filter on this trade is to use Delta for direction. We do not trade against Long term and Medium term swings, therefore we are now flat, meaning no position. Point [3] gives a buy signal when the TC Index turns green. One of our filters is Delta Timing. We only take long trades because we are moving up to a Long term 3 high and a Medium 8 high.

 

At [4] the market moves sideways after an up trend, notice the TC Index stays green. The TC Index turns yellow at [5] telling us to move our stop a few ticks below the yellow bar. We call our broker before market opens and place the sell stop on this long trade. The long trade is stopped out as the market moves down to M-7 low. The TC Index allows us to buy the market at [6] for the next up trend. We are approaching Medium 8 high and now on the right side of Long term 3. The Delta filter will keep us from taking any more long trades. The TC Index system traded this trend profitable. Delta timing gave us the direction. Use this combination when tradingthe markets and with proper money management we expect you will have a profitable year.

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