Monday, April 2, 2007

Tips for TradeRadar Users - in the Zone

I would like to introduce a new concept for TradeRadar users: the Zone.

The area below the green line on TradeRadar charts is "the zone".

Following the normal TradeRadar analysis process, you would use the trailing (rightmost) edge of peaks to identify reversal points. When the red signal peak falls well below the green line, a reversal in trend has been identified.

Example: you are tracking a stock and you get a signal peak indicating BUY. The stock has now entered the BUY zone.

After a peak has occurred, continue to review the path traced by the TradeRadar signal. If it remains below the green line, it can be considered to be confirming and continuing the trend identified by the peak - it is still within the zone.

Example: if a peak indicated a BUY signal and subsequently the path of the red signal line stays below the green line, this stock is still within the "BUY zone" and can be presumed to be continuing an upward
trend.

When the signal comes out of the zone, it definitely signals the end of the previous trend; however, it may or may not signal a tradable reversal. The new trend may be sideways or the opposite of the previous trend. Avoid trading into a sideways trend. Use the TradeRadar signal to test for a reversal using the last peak as a start point. The reversal would provide a tradable signal.

On the other hand, you may find a stock you like but you missed the reversal point. If the upward trend is still intact and the stock is still within the BUY zone it may still be well worth establishing a position.



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