Clayburg.com

  

 

Try Our Indicators....
Free Trial!!!

Online Seminar  Chicago Board of Trade
May 11, 2005, 3:30 PM (Chicago time)

Click Here to Watch the 
Archived presentation

Your Resource on the Web for Self Adaptive Trading Systems and Indicators
 

Home

Cyclone System
Cyclone Dow E Mini
Directional Day Filter System
Spectrum System
Feeder Trader
Belly Trader
Forex Trader

_____________
Four Steps Indicators  Systems
Four Steps Level 1 Indicators

Four Steps Level 2 Indicators & Systems

Four Steps Multimedia

Manual Download

Directional DayFilter 
Free Download
-------------------------

Book Store

Grain Systems
Events and Appearances
Parallel Functions
Contact Information

Bio


 

 

Four Steps Indicators

Contact Information
Order Form


Download Entire Indicator Manual FREE

1. Introduction 
2. Enhance Your Own Style
3. Clayburg Directional Day Filter
4. JFC Market Direction Indicator
5. JFC Reversal Indicator
6. JFC Real Time Pivot Indicator
7. JFC Exhaustion Indicator
8. JFC Exhaustion 2 Indicator
9. JFC Cluster Indicator 
10. JFC Volatility Stop Indicator
11. JFC Entry Point Indicator
12. JFC Intraday Hi Lo Indicator
Order Form

Use These Indicators To Build Your Own Self Adaptive Trading System!!!

 

 

TradeStation® 7 is a registered trademark of TradeStation Technologies, Inc.
TradeStation® 8 is a registered trademark of TradeStation Technologies, Inc
TradeStation® 2000i is a registered trademark of TradeStation Technologies, Inc
Neither TradeStation Technologies nor any of its affiliates has reviewed, certified, endorsed, approved, disapproved or recommended, and neither does or will review, certify, endorse, approve, disapprove or recommend, any trading software tool that is designed to be compatible with the TradeStation Open Platform

Introduction

On the following pages you will find detailed descriptions of the use of each indicator listed above.
Keep in mind that these indicators are designed for use on any chart, on any time frame. Sensitivity inputs are a part of most of the studies enabling the user to adapt the indicator in question to the appropriate charting environment.

Frequently users will request that an automated system be designed using a combination of several of the tools presented here. I am available for custom programming of such a system should you wish to do so.
 

 


JFC Market Direction Indicator

Manual

The JFC Market Direction Indicator is used, in conjunction with the Clayburg Directional Day Filter, to predict the direction of the major trend early in the trading day.

The indicator will appear as two different colored histograms. As with all of these trading tools, a blue color will relate to a buying situation and a red color will indicate a selling situation is in order. The blue histogram will plot above the zero line and the red histogram will plot below the line.

This indicator measures both the positive and negative energies within the market and then does a comparison between the different energy levels. The positive energy of the market is charted by the blue histogram while a red plot depicts the level of negativity in the market.

Therefore, 60 – 90 minutes into the market day, if you observe more blue than red on the subgraph containing the indicator you can be confident in expecting an up day for the remainder of the day. Conversely, an abundance of red visible on the general plot will be telling you that the most profitable trades will be found on the short side for this day.

There is a third plot on the indicator which measures the balance between the positive and negative internal market forces. This calculation is represented by the line you will see plotted overlaying the histograms. If it is plotted on the red portion of the indicator it will appear as a yellow line while it will appear as a white line when it is in the blue portion of the subgraph.

This line is a very important one to observe occasionally during days which are identified early on in the trading day as being sideways in nature. Careful observation of this plot can give you an early warning of a general trend change for the day.

 

Contact Information
Order Form
Download Entire Indicator Manual FREE


 

JFC Reversal Indicator

Manual

The appearance of cyan squares below the price bars is indicative of a significant downtrend in progress which is exhibiting signs of exhaustion. In other words, this indicator signifies that the current downtrend has reached the point where other similar downtrends have "run out of steam" so to speak. When the cyan squares no longer appear below the price bars the probability is high that at the very least the current phase of the downtrend is decreasing in momentum.

The appearance of magenta squares above the price bars is indicative of a significant uptrend in progress which is exhibiting signs of exhaustion. In other words, this indicator signifies that the current uptrend has reached the point where other similar uptrends have "run out of steam" so to speak. When the magenta squares no longer appear above the price bars the probability is high that at the very least the current phase of the uptrend is decreasing in momentum.

Entry Options
1. Buy at the market when the  cyan squares  stop  appearing; sell at the market when the  magenta squares  stop  appearing. Higher risk.
2. Maintain a trailing entry stop after the indicator ceases to appear. For instance, buy at the highest high of the last three bars after the cyan squares are no longer appearing or sell at the lowest low of the last three bars when the magenta bars fail to appear.  The trader can also use the JFC Entry Point Indicator as a tool with which to place a trailing entry stop. Moderate risk.
3. Use the JFC Real Time Pivot Indicator to confirm the trend and enter at this point. Lowest risk.

User Customizations
    Inputs:  Sens:     Practical range will be 2 - 30. Four to 9 will be optimum depending on data   compression. Again, lower numbers will increase the sensitivity.
    Optimal settings will vary with the market to which the indicator is to be applied, the data compression in use and the degree of sensitivity desired by the individual user.
    The trick to making this indicator as individually useful as possible is the constant observation of its activity in real time as well as on historical data. It is also important to periodically adjust settings and data compressions to obtain settings which closely match current trend changes in the market being observed.

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems  

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Real Time Pivot Indicator

Manual

The JFC Real Time Pivot Indicator has the same basic uses as the JFC Entry Point Indicator in that both tools are used in an attempt to define short term high and low points in the market.

The Red Dots above the bars are sell points while the Blue Dots below the bars indicate buying opportunities.

There are, however, important basic differences in the manner in which these indicators perform their tasks. First, refer to the JFC Entry Point section and review the manner in which they are plotted.
The JFC Real Time Pivot indicator is calculated by an extensive proprietary algorithm using overbought and oversold oscillators as well as multiple momentum functions to define the interim highs and lows of the market. It is by these calculations that the indicator is able to appear in real time and not delayed by a set number of bars as is the JFC Entry Point indicator.

The obvious advantage is the quicker appearance of the indicator. Unfortunately, a degree of accuracy, when compared to the Entry Point, must be sacrificed. In a sharp, protracted uptrend or downtrend the indicator will give premature indications of a high or a low. Using this indicator in combination with the JFC Rubber Band Indicator and the JFC Entry Points can greatly increase the accuracy of this tool.
 
 
 

Entry Options

1. Buy or sell at the market at the first appearance of a JFC Real Time Pivot Higher risk.
2. Buy or Sell at the market when the JFC Real Time Pivot appears in conjunction with a signal from the JFC Exhaustion Indicator. High - Moderate risk.
3. Buy or Sell at the market when the JFC Real Time Pivot appears in conjunction with a signal from the JFC Exhaustion Indicator and the JFC Reversal Indicator is indicating a reversal within a few bars of the high. Moderate risk.
4. Use the JFC Entry Points as trend confirmation and points for buy or sell stops for entry after the  appearance of the above combinations of the JFC Real Time Pivot, JFC Exhaustion Indicator and the JFC Reversal Indicator. Lowest risk.

User Customizations

1. FDB:  On a scale of 1 - 100, the FDB input sets the indicator sensitivity for the buy signals from the indicator. A lower number equals a higher sensitivity and thus fewer, but possibly more accurate signals. Suggested range = 5 to 15; optimal setting is 9.

2. FDS:  On a scale of 1 - 100, the FDB input sets the indicator sensitivity for the sell signals from the indicator. A higher number equals a higher sensitivity and thus fewer, but possibly more accurate signals. Suggested range = 85 to 95; optimal setting is 91

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Exhaustion Indicator

Manual

Plot Explanation

    The JFC Exhaustion Indicator is one of the more complex tools to understand. On the other hand, when properly mastered, it can be one of the most rewarding when attempting to ascertain turning points in the market.
    The first components of the indicator are the two yellow bands that are generally plotted above and below the price bars. These are standard deviation plots that are a derivative of the Bollinger Band indicators available in the standard TradeStation indicator library.
    The difference is that the JFC Exhaustion Indicator takes into account the high, low and close of the individual price bars rather than just the close. This tends to give the trader a truer picture of price action as exhaustion approaches.
    The white plot which runs between the two yellow bands represents the mid point between the high and low exhaustion points. It is a simple average of the upper and lower plot.
    The red line is an average plotted on the price bars themselves and is an independent calculation from the ones which produce the exhaustion bands.

Basic Exhaustion Theory

    It is very important to realize that markets, trends, or most anything else for that matter, will not continue in one direction or another forever. There comes a time when the trend will reverse and go in the opposite direction for a while. Nature has a way of constantly trying to achieve equlibrium.
    Think of a market trend as a basketball which you have thrown up into the air. It will certainly rise for a period of time. Eventually its rate of climb will slow (exhaustion), its ascent will cease and it will begin a decline (trend reversal).

    It is fairly widely accepted that markets will trend for only 25% of the time. During the remaining 75% they are in a sideways phase. It is during this sideways phase that exhaustion indicators are valuable in detecting turning points in the markets.

Interpretation

    There are multiple interpretations that may be derived from the plots of this indicator.
    First notice that the price bars will trail along quite closely with the upper or lower exhaustion (yellow) plots. Note the abrupt change in price direction when the price bars suddenly leave the vicinity of the yellow lines.
    Now observe the red line plot which is an average applied to the price bars. This line smoothes out the price activity relative to the exhaustion bands. Observe what happens when the average (red) line passes through the exhaustion bands, makes a peak or valley, and then turns in the opposite direction. This type of action regularly appears at short term turning points in the market.
    The white line plot can have multiple uses depending on the market being traded and the data compression being used. One use of this line is as an entry point after a trade is signaled by the red line passing through the exhaustion bands and then making a turn. The more aggressive trader may wish to take a position when the turn of the red line occurs outside the exhaustion band. In this instance the white line can be used as an objective for the trade or as a point at which the trend is confirmed.
    You will also find the Exhaustion 2 Indicator helpful in the interpretation of this concept.

Alternative Interpretation of Exhaustion Indicator in a Trending Market

Although the primary use of the exhaustion indicator is the identification of turning points, there is alternative interpretation which can be used in a trending market. When a trend is identified with the use of the Market Direction Indicator, the Volume Direction Indicator and the Intraday Hi - Lo Indicator, the Exhaustion Indicator can be used to identify retracement points at which entries can be taken inthe direction of the persistent trend. In the chart to the left note the activity of the market when the red line pulls back between the yellow bands and briefly encounters the white line. These retracement areas frequently provide excellent entry opportunities.

Also, note the difference in the pattern at point B when the red line proceeds abruptly through the white line and proceeds through the upper yellow band before it goes back below the white line. This pattern, following multiple retracement signals, often signals the end of the short term trend.

Note the presence of the Intraday Hi - Lo indicator (small red dots) as it identifies the new lows being made by the market as the floor traders run the stops below the low of the day.

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Exhaustion 2 Indicator

Manual

Plot Explanations

The JFC Exhaustion 2 Indicator  will plot a dot (white) on the red line after it has crosses above the upper band and turned lower or has crossed below the lower band and turned higher.

This tool is designed as an aid for the interpretation of the JFC Exhaustion indicator.

It can be used in conjunction with  the companion indicator. When used in in this manner, it makes the turning points of the red line easier to observe and therefore determine when the trend has changed according to the JFC Exhaustion indicator.

This tool can also be used as a stand alone tool. It is quite interesting to observe the pattern created when this indicator is used along with the JFC Real Time Pivot indicator (Red and Blue Dots). You will readily note that the real time pivot will often slightly precede the actual turning point in the market while the JFC Exhaustion 2 indicator will slightly lag the turn.  The two, when used together, can  be a very powerful trading tool.

CAUTION:   When using this indicator with the JFC Exhaustion Indicator be sure the inputs for the two indicators are identical to each other. The plots will not match up if different inputs are being used.


Use this indicator in an automated Trading System :
Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Cluster Indicator

Manual

    The appearance of a larger magenta dot above a price bar indicates that the market may have reached a significant exhaustion point indicating a possible selling opportunity.
    The appearance of a larger cyan or light blue dot above a price bar indicates that the market may have reached a significant exhaustion point indicating a possible buying opportunity.


Entry Options

1. Buy or sell at the market at the first appearance of a JFC Cluster Indicator Dot. Higher risk.
2. Place a buy or sell stop at the last pivot identified by the JFC Entry Point indicator. When the market then trades through the support or resistance defined by the pivot indicator you will enter the market at the point at which support is violated following exhaustion. Lowest risk.
 

User Customizations

Inputs: Plt.  This input will define where the indicator dot will be plotted (plt) in reference to the high or low of the bar in question. For instance, on an S&P chart, a 5 entered here will plot the dot 5 points above the high of a high exhaustion point and 5 points below the low of a low exhaustion point. Experiment with this plot until you are visually comfortable with the presentation.

Use with Other Indicators

              I've found this indicator to be particularly useful in combination with the Real Time Pivot, Reversal, and Exhaustion 2 indicator. Since all of these programs utilize different pattern recognition scenarios, an area in which all 4 are signaling an upcoming price move has a higher percentage of accuracy that using any of the tools separately.

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Volatility Stop Indicator

Manual

The Volatility Stop Indictor, as with many indicators, has as its principle function the definition of the current trend. Note that when prices are above the Uptrend Volatility Line (UVL) the trend as defined by this indicator is considered to be up. When the prices are below the Down Volatility Line (DVL)  this indicator is considered to be down. The UVL should be plotted as blue as it defines an uptrend. The DVL should be plotted as red as it defines a downtrend.

    The market changes from an uptrend to a downtrend when a bar CLOSES  below the plotted UVL. Note that the low of the bar can be plotted below the UVL without initiating a trend reversal to down.
    The market changes from an downtrend to a uptrend when a bar CLOSES  above the plotted DVL. Note that the high of the bar can be plotted above the DVL without initiating a trend reversal to up.
    The unique trend defining function of this indicator is its ability to give the market additional flexibility when an increase in volatility occurs. While one may obtain several definitions of volatility, for the purposes of this indicator we will consider volatility to be higher when the range, or distance between the high and low of a bar, increases for each bar.
    IMPORTANT:  Note that as the average volatility of the price bars increases the DVL or UVL reversal lines can actually move farther away from the price bars thus giving the market time and space to work itself through a volatile time period without subjecting the defined trend to successive, frequent changes which can occur during periods of increased activity. If the increased activity is indeed indicative os a trend change the change will be confirmed when the activity is of sufficient strength to actually break the trend line.

Entry Options

None. This indicator is not intended to be used as an entry tool. Its best use is for trend definition and stop placement.

Stop Placement

Since the trend is defined to have changed when the market closes above or below the indicator lines, this indicator provides an excellent tool for the placement of trailing stops, particularly after a sustained move in the market and the line has drawn close to the price bars.

User Customizations

Length:  Range = 7 to 35;  21 to 28 is optimal. Higher numbers = decreased sensitivity.

Factor:   Range = 2 to 8;  4 to 6 is optimal. Higher numbers = decreased sensitivity.

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Entry Point Indicator

Manual

The appearance of a blue dot above a price bar indicates that this bar is a significant high defined by the sensitivity settings of the indicator.

The appearance of a red dot below a price bar indicates that this bar is a significant low defined by the sensitivity settings of the indicator.

Entry Options

1. Buy or sell at the market at the first appearance of a JFC Entry Point Indicator Dot. Higher risk.
2. Use this indicator as a confirmation of the trend as established by the JFC Exhaustion Indicator, the JFC Real Time Pivot Indicator and/or the JFC Reversal Indicator. Enter when the market trades through the blue or red dot thereby confirming the trend. Lowest risk.
 

User Customizations

Inputs: Strength: Practical range will be 2 - 5. Two will probably be optimum. Lower numbers will give a higher sensitivity.

    The most important aspect of this indicator is to realize that for a bar to be marked as a high or low there must be an equal number of bars both prior to and following the bar which, in the case of a high, have lower highs than the market bar, or in the case of a low must have an equal number of bars both prior to and following the bar which have higher lows. The strength input defines the requisite number of bars necessary to form the high or low.
    Since there must be the requisite number of bars following the bar in question, the high or low will not appear on your screen until the correct number of bars have been plotted. Therefore, in the case of a high, the high bar will not be marked when it appears - it must wait the strength number of bars to be marked.  This feature of the indicator reduces the effectiveness of the highs or lows since their appearance  is delayed in real time.
    The prime use of this indicator is its ability to identify short term support and resistance. If the market trades through a blue dot which marks a high (resistance) the trend is confirmed as an uptrend. If the market trades down through a red dot (support) the trend is confirmed as a downtrend.
    This indicator is most useful when used in combination with a second trend defining indicator. There are many indicators which can be referred to as trend definition indicators. We use the JFC Reversal Indicator as our prime trend definition tool. Others are the JFC Real Time Pivot Indicator, the Clayburg Directional Day Filter Indicator, and the JFC Volatility Stop Indicator. Other indicators can also be used for trend definition i.e., stochastic, RSI, Percent R, MACD, etc.
    A practical demonstration of the use on this indicator would be the case in which the JFC Reversal Indicator was displaying cyan dots below the price bars. When the cyan dots cease to appear the downtrend becomes suspect. When the market trades up through the last blue dot formed by the pivot indicator the trend is confirmed as being higher for the short term. Conversely, when the magenta dots cease to appear the uptrend becomes suspect. When the market trades down through the last red dot formed by the pivot indicator the trend is confirmed as being lower for the short term.
    Optimal settings will vary with the market to which the indicator is to be applied, the data compression in use and the degree of sensitivity desired by the individual user.

    The trick to making this indicator as individually useful as possible is the constant observation of its activity in real time as well as on historical data. It is also important to periodically adjust settings and data compressions to obtain settings which closely match current trend changes in the market being observed.

Use this indicator in an automated Trading System : Four Steps Level Two Indicators & Systems

Contact Information
Order Form
Download Entire Indicator Manual FREE


JFC Intraday Hi Lo Indicator

Manual

The JFC Intraday Hi Lo Indicator is a useful tool which is used to automatically notify the user when the high or low of the current day is being approached.
This indicator is used only on intra-day charts.
The JFC Intraday Hi Lo Indicator plots a series of blue dots at the high of the day and a series of red dots at the low of the day.

 

Contact Information
Order Form
Download Entire Indicator Manual FREE


Hit Counter




By John F. Clayburg

JOHN WILEY & SONS, INC.
New York  Chichester Weinheim Brisbane  Singapore Toronto
ISBN: 0-471-41482-4
June 2001
320 Pages
Hard Cover
Description
Annotations
Contents
Reader's Comments
Support Pages
Order Form