Proof of item:
THE MOST ACCURATE PRICE ACTION CONFIRMATION TOOLS IN OUR FAMILY OF INDICATORS
- FLUX Volume Barrier
- FLUX Volume Vacuum
- FLUX Scalpel Signal
- FLUX Sentiment Zone Indicator
- FLUX Trend Membrane
- FLUX Hair Trigger
FLUX VOLUME BARRIER
The Volume Barrier takes the concepts of the Volume Vacuum, and incorporates a third element – price action, or more specifically, a candle pattern into the calculation of the dotted line used to indicate critical accumulation and distribution areas along the DOM of the markets. These accumulation or distribution areas, “supply and demand zones” are the areas of the market where the institutions are huddled and prepared to move upwards or downwards. This Volume Barrier will create a signal when volume divergence is present, with a reaction candle exposing the supply or demand zone with a dotted horizontal line that can be used as an entry area, a stop area, or a re-entry area upon retest of the supply and demand zone.
As with the Volume Divergence Indicator, the Volume Barrier translates well across both non-time and time based chart bars. Our favorite setup so far involves Volume Barrier signals that are in line with the Trend Membrane, or what I call “pocket” signals, where the Volume reversal bar occurs in that soft rubbery band at a correction with trend. These signals are equally powerful as breakdown or breakout indications in strong up trends and down trends on both the first break out, and then the re-test return to the accumulation/distribution area that was tested for interest and exposed.
FLUX VOLUME VACUUM
Bullish and bearish divergence signals can be used to anticipate a trend reversal. These signals are truly based on the theory that volume precedes prices. A bullish divergence forms when on volume moves higher or forms a higher low even as prices move lower or forge a lower low. A bearish divergence forms when volume moves lower or forms a lower low even as prices move higher or forge a higher high. The divergence between volume and price should alert traders that a price reversal could be in the making.
This indicator can be used directionally with trend entry signals, or as an indicator to determine profit targets when strength is weakening and hidden buying/hidden selling is occurring. What makes the Volume Vacuum especially interesting to us is the apparent ability of this technique to work on both non-time frame (renko,range,tick) bars as well as minute bars. We didn’t expect this phenomenon to occur, based on our observation of our other trigger indicators like the Broadhead. One aspect of this indicator that increases accuracy is the duration of the bar being measured. The longer the period of volume included in the calculation, the more volume patterns there are to analyze for divergent indications.
From our experience using this tool, the Volume Vacuum will almost always precede a Flux Time Cycle Marker, indicating before the time that the Institutions are preparing to move by shuffling their volume around before the drop or the next push up.
FLUX SCALPEL SIGNAL
When you’re a parent, they tell you that you’re not supposed to have a favorite child. Every parent knows though, that there’s one kid that just gets to your heart quicker than the others. That indicator for us, is the Scalpel Signal.
The Scalpel Signal is loosely based on the fairly complex Flux Sentiment Zone framework, which incorporates a leading Time/Price comparison with regards to market exuberance, or depression. We took the same rationality behind the Flux Broadhead indicator however, and conformed the code of the Flux Sentiment Zone around that framework, and were astounded by what we found.
The Time/Price cycles of the Sentiment Zone tool were quantifiable, and equally reliable. Moreover, we discovered that we could , like the Broadhead, incorporate a sensitivity component into the parameters allowing users to either see primary trend geneses/exhaustion’s or intermediate corrections and swing legs inside the overall trend. As such, this indicator can be used on 240 hour bars, or on 2 tick bars. This signal is currently a contender for most powerful price action reversal indicator in our arsenal.
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Based on its Fluz Sentiment Zone roots and genealogy, we’re particularly encouraged by its use as a “buy” indicator…as it seems to find prices where people are willing to purchase and come into the market very well which is extremely useful in a bull market like this one.
FLUX HAIR TRIGGER
The Flux Hair Trigger is a scalping indicator based on a sub-variant of the popular Flux Broadhead code. Its code variant incorporates a price and time based algorithm that identifies a market shift that historically precedes the stereotypical “impulse move” that occurs when the market is driving away from an exhaustion high, or exhaustion low.
There are two features that allow the Hair Trigger to be used with increasing accuracy and ability – namely the trend filtration parameter, and the “display histogram in separate panel” feature.
When employing filtration against a known trend (SMA,EMA) the indicators sensitivity can be exploited allowing for the display of breakouts from tight congestion areas which lead to impulse moves between lows and highs. The sensitivity of the time-price algorithm allows early detection at these turning points which allow traders an opportunity to quickly scalp or get to a “break even” condition.
When employing the histogram panel, traders can see the turns occurring in real time, as well as understand the “unoccupied” space left uncharted on the histogram. After the Hair Trigger signal appears, traders can gauge the space between the firing candle and the max extreme of 100 to understand how much profit is left in the impulse leg move, using this blank gap as a leading indication of potential profit.
FLUX TREND MEMBRANE
Although this appears to be a very simple indicator, it is extremely powerful when used in a proper manner. As per most of our techniques, it encourages traders to adopt a trend following setup and when used correctly will help keep traders out of choppy markets.
There are 3 very powerful ways that we’ve identified as having a distinct setup for traders using the Flux tools The first involves applying the indicator to an anchor time frame to establish what the dominant higher time frame trend is. When applied on the lower, trigger time frame, the color rotations from bearish to bullish and vice versa tend to be powerful impulse moves…fresh pushes into that first A to B leg of the market when it corrects and launches.
The second method involves seeing the Barrier as an “area” and not so much a line. Many of the trigger trades will pull back to, and respect the barrier average, settling into that area like a big, wide, rubber band. Setups that occur like this encourage traders to wait for confluence between the pullback to the averages band, as well as a signal from a secondary source, like a Flux TCM, or a Trigger like the Broadhead. Having a “band” as opposed to a “line” helps traders see an over-correction as opposed to a fake break out.
The 3rd way is just a brute force entry and exit on fresh color rotations.
The membrane width acts as a visual “stop” allowing traders to analyze short term risk for possible trades that can become quick “break even” entries. We’ve also noticed that the first pullback to the MA band after a fresh break through is often a very high probability reversal after each color rotation. The few traders we’ve allowed to see this indicator before release have described being able to clearly see the stereotypical “3 movements”, or the 1-2-3, A-B-C patterns of the markets with the candles colored the way that we’ve programmed them, as well.
FLUX SENTIMENT ZONE
The Flux Sentiment Zone (FSZ) is a leading contrary oscillator that measures the extreme emotions of a single market or share. It measures and defines both extremes, bullishness (over optimism) and bearishness (over pessimism), that could lead to a change in sentiment, eventually changing the trend of the time frame under study.
The FSZ was devised on the belief that after several waves of rising prices, investors begin to get bullish on the stock with increasing confidence since the price has been rising for some time. The FSZ measures that bullishness/bearishness and marks overbought/oversold levels. When the FSZ goes above 7, it indicates extreme optimism. When the FSZ goes below -7, it indicates extreme pessimism. The Flux Sentiment Zone is based off an article written in the May 2012 issue of TASC written by Walid Khalil.
We’re perhaps most excited by the broad strength of the tool, being useful on the smallest of tick and range charts, as well as the larger daily, monthly and weekly bars for entry areas. Conversations with professional swing traders have also confirmed that large funds are using a very similar indicator to find options entry areas for their portfolio trades.
I did some preliminary research and discovered that some traders have programmed their own versions of this indicator as well – and have even built strategies around it. Here’s a few examples of some of those rules I came across:
“ The Sentiment Zone strategy is based on values of Sentiment Zone and their relation with dynamic overbought and oversold levels. The strategy adds a BUY_AUTO order when any of the following conditions is fulfilled:
- 30 period SMA of FSZ crosses above the zero level and price is higher than its 60 period EMA.
- FSZ is below the oversold line, its 30 period SMA is rising and price is higher than its 60 period EMA.
- FSZ crosses above the oversold line, its 30 period SMA is positive and 60 period EMA of price is rising.
- The strategy adds a SELL_AUTO order when any of the of the following conditions is fulfilled:
- 30 period SMA of FSZ crosses below zero.
- FSZ crosses below the “+7” level while its 30 period SMA is declining.”
The Flux Trigger Pack collection of confirmation, price action indicators perfectly compliments the data mined Time and Price areas of the Flux Basic, Professional, and Investor class tool set. In short time, you’ll be combining two or more of these powerfully accurate trigger signals and incorporating them into your own personalized trading plan.
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