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.
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.
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.