Nirvana Systems, the creators of SignalWatch, have been creating trading strategies for over 25 years. Our award winning strategies have helped traders consistently profit even in the most difficult of markets. SignalWatch subscribers have the advantage of getting great trading signals from over a dozen of the best Trading Strategies available.

A Trading Strategy basically tells a trader when stocks are likely to make a predictable move. A Strategy is generally composed of a set of rules that identify the conditions in the chart that precede the expected move. Most Trading Strategies use price and volume data in order to determine when these optimal conditions are present, although some strategies may use fundamental data as well.

Defining the Setup

The first step for a Trading Strategy is to define the setup required for a signal to be generated. A setup could be one condition or multiple conditions. These setups use quantitative rules to identify imbalances in supply and demand. For example, a stock consistently trading above its average price indicates there is excess demand for the security. A basic trading strategy could simply require that price move above a moving average in order for a signal to be generated. Another strategy might use this same condition, but also require additional rules to further refine the situation that is occurring in the chart.

While the combination of rules used to generate a signal in the SignalWatch Strategies may be more complex than the above example, it is still analyzing patterns in the charts that identify the conditions that lead to big movements in price.

Trading Strategy Example

Here we are showing the chart for Bank of America (BAC). Our example Trading Strategy is looking for two basic conditions in order for a signal to be generated:

• Long Term Upward Trend
• Oversold in the Short Term
• (just experienced frantic selling)

When these two conditions are met we know that the stock has excess demand in the long term, and that because of the recent sell off, the sellers are likely exhausted. All said, this means we have a high probability of a large upward move in price.

In order to determine whether the stock is in a long term upward trend, we look at price's relationship its moving average. If price is currently above the moving average, then it is considered to be in an upward trend.

To define the second condition, we use technical tool known as the RSI to gauge how frantic recent selling has been. When this indicator is below the 30 level, we consider the stock the stock to be oversold in the short term.

When these two rules are met, the conditions are ripe for an extend move to the upside, so it would result in a long (buy) signal.

The World's Best Trading Strategies

SignalWatch is built on decades of strategy design research. This allows us to bring you the Robust Strategies that consistently generate great trading signals. Try SignalWatch today, and see for yourself.