Trading signal: trend reversal based on TLB bands

Description

This signal takes position in the early stages of a potential trend reversal. The trend reversal is identified by a very interesting chart type called Three Line Break (TLB) chart.

   
Category : Trend reversal
Components : Unique Three Line Break bands
Time frame(s) : All
Usable for buy signals : Yes
Usable for short sell signals : Yes
  Video

The TLB chart is interesting because it visualizes a trend reversal. However, the TLB chart is difficult to interpret given the fact that it has a variable time axis. The strength of this signal lies in the fact that it visualizes this complicated yet useful chart as a simple band. This green-red band is visible in the main chart.

When to open a position?

A buy signal appears when the market finds itself in a negative trend and the candle closes above the red band. A short sell signal appears when the market finds itself in a positive trend and the candle closes below the green band.

3 Line Break trading signals  

This example shows three signals (pink circles) on the DAX index in a 15’ time frame. The first signal is a buy signal. The second signal is a short sell signal. The third signal is, again, a buy signal.


Free 3 Line Break trading signal  

This example shows two signals (pink circles) on the DAX index in a 15’ time frame. The first signal is a buy signal. The second signal is a short sell signal.