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◊ Trend-Traffic™ Lights quickly and efficiently diagnose the immediate short-term trend for stocks, options, etf’s, bonds, futures and forex
◊ Fibozachi Inflection Bands™ (FIBs™), a uniquely groundbreaking improvement upon Bollinger Bands, identify high probability breakouts and define support
◊ Trend-Squeeze™ Ribbon and Oscillator highlight extraordinary contractions in volatility, Average True Range (ATR) and the Composite Strength of Trend in anticipation of their immediate and explosive re-expansion alongside powerful thrusts in price action
◊ Multiple confluence-based leading indicators continuously calculate intra-bar data in real-time, accurately registering robust signals across all fractal interval periods of time, tick and volume
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Based purely on mathematical ratios between certain short-term price levels, its extraordinary accuracy has best served us as a confirming indicator and setup trigger, complimenting standard measures of price action such as candlestick pattern, Elliott Wave, momentum, volume and volatility analysis.
Trend-Traffic™ Lights remain ever sensitive to price change, requiring its user to remain somewhat nimble. If you are not interested in scalping trades during the day, simply slow down your timeframe and zoom out to the hourly, 120-minute or even daily to easily manage high probability setups. If you are interested in frequently scalping high probability trades, then enjoy using Trend-Traffic™ on any time, tick or volume chart!
We at Fibozachi have significantly increased the predictive value of Bollinger Bands by modifying their standard input values of “Length” and “Standard Deviations” to reflect harmonically reactive numbers and their derivative ratios rooted in the Fibonacci sequence. We have also coded smoother bands that much more accurately reflect price action by utilizing an average of the Open, High, Low and Close (OHLC); this stands in direct contrast with the “default” calculation of Bollinger Bands, which only measure closing prices.
We use Fibozachi Inflection Bands™ (FIBs™) as an extremely accurate and simple way of assessing both the direction as well as the underlying strength of trend. Unlike standard Bollinger Bands, which poorly attempt to constrict price within their Bands, Fibozachi Inflection Bands™ are designed for use in exactly the opposite way; we patiently wait for price action to breakout either above the Upper FIB™ or beneath the Lower FIB™ and then ‘hop on board’ when Trend-Traffic™ Lights signal confirmation.
If you have ever studied Bollinger Bands, then you might have noted, “These cute things almost work once in a while;” and if you have attempted to trade with them, then you must have realized that they do not provide accurate timing signals. Whether referring to the “20” period or the “2” standard deviation, these almost arbitrary input settings simply do not accurately reflect the highly recurring, fractal nature of market cycles. Can you decipher accurately timed buy and sell signals out of the Bollinger Band example below? We cannot either.
Now look at the exact same chart overlaid with Trend-Traffic™ Lights and Fibozachi Inflection Bands™ (FIBs™). Upon first glance, your eyes immediately discern both the direction and the strength of trend. In stark comparison to the Bollinger Band example above, note how price action continually respects the FIBs™, as if price itself knows exactly where they are. FIBs™ require NO guesswork for two simple reasons: first, since price action so clearly respects the FIBs™, you can easily see where the downtrend loses steam, begins to transition, reverses direction upward and confirms the breakout; second, Trend-Traffic™ Lights provide an added visual confirmation of trend based upon price action over the most recent 3-5 bars.
Lagging Bollinger Bands do not anticipate short-term price action or signal important turning points in the market and can only provide a technician with generalities to weigh. In marked contrast, leading Fibozachi Inflection Bands™, specifically designed for trend-based trading strategies with Trend-Traffic™ Lights, allow you to determine the direction of trend upon first glance while also providing valuable insight into market character. Where Bollinger Bands fail to account for the actual trading issues of timing and execution, FIBs™ allow for clear-cut guidelines, explicit rules and defined strategies to help identify, isolate, time, execute and manage ideal trades.
Trend-Squeeze™ is a collection of extremely smooth leading indicators that continuously calculates intra-bar data in real-time to accurately:
1) gauge a Composite Strength of Trend with very little noise;
2) anticipate the direction of price action with extremely low lag;
3) highlight extraordinary contractions in volatility, Average True Range (ATR) and the Composite Strength of Trend in anticipation of their immediate and explosive re-expansion alongside powerful thrusts in price action.
Plotted as either a Ribbon, Oscillator and PaintBar; the Trend-Squeeze™ Composite Strength of Trend Filter colors each histogram or price bar Green (bullish), Red (bearish) or Blue (SqueezePlay signal).
The Trend-Squeeze™ Ribbon provides a quick summary of the current direction of trend while the Trend-Squeeze™ Oscillator allows for a thorough analysis of the Composite Strength of Trend Filter (CST Filter). The CST Filter colors each price and histogram bar Green during bullish conditions, Red during bearish conditions and Blue when specific conditions register what we call a “SqueezePlay” signal.
Blue colored SqueezePlays highlight extraordinary contractions in volatility, Average True Range (ATR) and the Composite Strength of Trend in anticipation of their immediate and explosive re-expansion alongside powerful thrusts in price action; like a rubber band stretched to its maximum point of tension.
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