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Trading the future today

Indicator Reference Guide

“Trading the Future Today”

Trend model and mbi gam
Trend Model and MBI/GAM

This paint bar describes market trend by coloring all candles either GREEN (Bullish) or RED (Bearish). White candles represent the MBI and Yellow candles represent the GAM.

Trend Model and MBI/GAM

The Green and Red trend are generated using a specialized algorithm to quantify meaningful direction. The Morgan Buy Indicator (MBI) was originally designed to detect bottoming points in price. The Gradient Algorithmic Multiplier (GAM) has a similar function, but adds a Chaos dimension. We understand with the GAM that increased volatility both up and down, is likely and in red trend, we use this knowledge to obtain discounts to the candle signal.

Extreme histogram true overbought and oversold
Extreme Histogram-True Overbought and Oversold

The Extreme Histogram can be displayed either directly over price or in a sub graph as shown here. Never again will you be confused about whether a market is overbought or oversold. Extreme overbought is depicted when the histogram shows a positive reading. Extreme oversold is shown when the histogram dips below the red line at -60.

Extreme histogram true overbought and oversold1
Extreme Histogram-True Overbought and Oversold

Simple overbought is shown with the dark cyan box when the reading is greater than -8.5. Simple oversold is seen when the histogram dips below the -45 but not to the -60. The magenta box shows a special circumstance when coming off red trend. We do not consider positive extreme overbought until 5 bars have passed and we revisit reading.

Extreme histogram true overbought and oversold2
Extreme Histogram-True Overbought and Oversold

These extreme dips below the red line become powerful entry points. On the left side of the chart we see matching lows but on higher histogram readings. These divergences provide very safe and powerful reversals where most would be too afraid to enter (#1, #2, #3). The red box shows extreme histogram readings staying below the red line and a continuation of the downtrend.

Advanced baseline modifier abm
Advanced Baseline Modifier (ABM)

The ABM is one of the few price adaptive indicators that allows you to take an MBI/GAM signal and trail an entry until your choice of stops is breeched.

Advanced baseline modifier abm1
Advanced Baseline Modifier (ABM)

Each colored ABM line represents of different speed of trailing. Selecting the one color most suited to your trading style allows a variety of trading styles to be accommodated (quick hit, swing trader, long term).

Expanded ratio histogram erh
Expanded Ratio Histogram (ERH)

A multi-faceted oscillator providing insight into market flow. The ERH shows changes in market direction, the direction of that change and the strength of the move.

Expanded ratio histogram erh1
Expanded Ratio Histogram (ERH)

The horizontal lines of this oscillator provide context for normal and extra-normal market moves. We become particularly interested when colored lines move outside the normal highway of market flow. The analogy of leaving one highway for a new highway clearly represents the numeric change market internals are undergoing.

Expanded ratio histogram erh2
Expanded Ratio Histogram (ERH)

This chart depicts how one line (in this case the Bullish Orange Line) can assist in maintaining a trend trade. Throughout this entire series the orange line remains above the yellow line, signifying bull dominance over bears.

Expanded ratio histogram erh3
Expanded Ratio Histogram (ERH)

Reflecting bear dominance, the yellow line goes off the highway at left of chart, with bull orange line under the yellow line and remains throughout a red trend move. A unique exception are dips of the orange line below -13 without the yellow line replicating the orange.

Shakeout indicator
Shakeout Indicator

I designed the Shakeout Indicator to tell us when a new high is a real new high or a short cover shakeout. At the bottom side of the chart, it lets us know when a new low is really a buy opportunity instead of a shakeout sell.

Shakeout indicator1
Shakeout Indicator

The blue box shows the top on the left exceeding our purple sell line (+25)followed by a second top with a lower shakeout histogram (Bad News!) The third attempt at the same high on even lower shakeout histogram was the death nail. In the dark cyan box, we show a simple sell signal where the white histogram dips below the yellow line in an up move.

Shakeout indicator2
Shakeout Indicator

Lower lows always terrify traders! Not so, when using the Shakeout Indicator. The blue box may show a new lower low, but the shakeout expressed clear doubt that bears could deliver lower price. The higher histogram divergence is a classic signal produced by the shakeout indicator and of exceptional value. Use this set up ALWAYS and OFTEN!

Shakeout indicator3
Shakeout Indicator

Lower lows always terrify traders! Not so, when using the Shakeout Indicator. The blue box may show a new lower low, but the shakeout expressed clear doubt that bears could deliver lower price. The higher histogram divergence is a classic signal produced by the shakeout indicator and of exceptional value. Use this set up ALWAYS and OFTEN!

Power momentum power mo
Power Momentum (Power Mo)

Power Momentum #1 & #2 push the boundaries of traditional market understanding. In Power Mo #1, the histogram tells us day to day who is in control, Bears or Bulls. In Power Mo #2, we use advanced math theories to indicate chaotic events happening behind the scenes of normal market moves.

Power momentum power mo1
Power Momentum (Power Mo)

In Power Mo #1 histogram, the magenta rectangles depict bulls (cyan) regaining dominance over the bears (yellow) when the cyan histogram is greater than the yellow. The horizontal lines depict a general peak level of the histograms where reversal might be expected. The magenta represents an extreme push.

Power momentum power mo2
Power Momentum (Power Mo)

Chaos is our friend in Power Mo #2! Unique string algorithms give us a heads-up when the market is about to change where normal price action is not indicating anything special. While we can use simple crossovers of the magenta to white lines, or spikes in the relation of cyan to green, this indicator makes price irrelevant in choosing direction.

Morgan reverse signal mrs
Morgan Reverse Signal (MRS)

Morgan Reverse Signal is a range bound oscillator similar to an RSI, used less frequently due to its dependence on price for readings. Separated by speed, the fastest is the green line, followed by magenta and the slowest yellow. The limitation of this indicator is at the two polar ends, overbought and oversold. The right side of the chart shows that limitation as overbought never ends and generates no new signals, yet price significantly advances.

Morgan reverse signal mrs1
Morgan Reverse Signal (MRS)

The MRS becomes effective at the bottom of the range as we look for crossovers of the green fast line from under to above the yellow or magenta lines. The blue ellipse show bullish oversold when matched with a corresponding magenta dip. Note the red ellipse had no such matching magenta dip.

Morgan reverse signal mrs2
Morgan Reverse Signal (MRS)

Here we see in the red rectangle the less effective upper end of the range and the limitation of bounded oscillators as overbought becomes ineffective in a continuation of trend. The blue rectangles show bearish break downs below the 75 red line but would need confirmation from additional sources.

Buy sell ranges
Buy Sell Ranges

Buy Sell Ranges are similar concept to Bollinger Bands. Previous price movement is used to project an upper and lower range. The problem is using price for any indication of direction is lagging not projecting.

Price oscillator
Price Oscillator

The Price Oscillator was created to help identify times where price and momentum are moving in the same direction. We can identify ranges for the white price line (70+ = Bullish) (40-69 = Neutral) (Under 40=Bearish). The green momentum line has a powerful reversal property when it dips below -50. When both lines rise from lows over the +24 horizontal, I call this a 20/20. It projects positive movement in price in very short order.

Price oscillator1
Price Oscillator

Here are examples of the bullish 20/20 and note how the best moves come off extreme dips of the momentum below -50 shown with the red ellipse. Beyond this unique configuration, trading this indicators gyrations would whip saw you too frequently.

Morgan buy indicator
Morgan Buy Indicator

This is where it all began! The frustration of failing technical analysis and standard indicators forced a new direction in market analysis. The MBI oscillator produces the white MBI candles under specific set ups. More helpful on the bottom of price moves (oversold) than at the top side of overbought.

Morgan buy indicator1
Morgan Buy Indicator

The blue rectangles correspond to MBI setups. Oversold in general terms is reached at a level under 25 but it is necessary to have our green cross from under than above the cyan without the green line climbing over 45. At the top of the range, the muddle moves create ineffective signals.

Up down power
Up Down Power

With current algorithms distorting volume, we need a new way to identify Bulls and Bears in the market. Up Down Power Continuous does that! The white histogram represents the Bulls, the red histogram represents the Bears. When the histogram is above “0”, the Bulls are in charge. When the histogram is below “0”, Bears rule the day.

Up down power1
Up Down Power

Calculations above have us looking for points where bulls or bears out maneuver the other side. This is shown in a ratio of over 69% when dividing the two readings into each other. At the right of the chart, the percentage of bears to bulls is only 37% and not an imminent threat for shorts to drive price lower.

Up down power2
Up Down Power

The green and dark cyan boxes show percentages in excess of 70% and in the green case over 90%. The key signal is a rise in the bear power. Without the rise in bear power histogram you have what we see in the grey box. The grey box depicts the correct percentage but a declining bear histogram (bulls covering at lower price)

Up down power3
Up Down Power

These histogram configurations present a classic BEAR TRAP. Where the bear histogram moves negative but the declining bull histogram fails to dip below zero and becomes a buy on the next higher bull histogram (a pivot). The resulting up moves are usually fast and powerful due to short covering.

Ratio hawk
Ratio Hawk

The combination of all the indicators and oscillators within specific algorithmic set up produce these buy and sell signals in the form of colored dots. This set up produces the Ratio Hawk- Green Dot Buy Signal, as well as the Red Dot Short set up. The location of the dot represents the stop for the trade. The white dot above is the projected primary target. While not meant to ignore changing market conditions, these initial dot set ups are a compilation of TradeTheMBI indicator analysis without having to go through each indicator individually.

Catfish extreme fractal and halibut
Catfish, Extreme Fractal and Halibut

The best bottom feeder to cook up trades! The Catfish (Cyan Dot) like the MBI and GAM finds bottoms and gives a signal. This chart shows 6 months of Catfish signals, and each one is a winner. Not to be left out, the Extreme Fractal (Red Dot below price) often comes in conjunction with a Catfish but not always. Not quite a bottom feeder, the Halibut (Dark Green Dot) finds buy signals a little further into a move.

Orange dot erh
Orange Dot (ERH)

The Orange Dot is another in the series of pre-defined algorithmic set ups, again showing a stop at CLOSE – (ATR * 2). The up target is equal to CLOSE + (ATR * 1.236). This chart also shows 6 months of Orange Dot signals, all winners as well.

Pink dot yellow dot and grey dot
Pink Dot, Yellow Dot and Grey Dot

Pink Dot was the first of the algorithms and usually comes a bit off the bottom, where as the Yellow Dot is a bit more aggressive in attacking sub set divergences. Targets and Stops are the same as described previously. The alternative companion to the Pink Dot is the Grey Dot Low Retest.

Pink dot yellow dot and grey dot1
Pink Dot, Yellow Dot and Grey Dot

The Grey Dot shown here initially looks for a retest of the bars low and then depending on additional readings from other indicators, the full white dot target.

Daily trend trade
Daily Trend Trade

This automated program trades the direction of our Trend Model. It seeks a user defined percentage of the 14 period ATR. This setup is designed currently for Futures and in this case the E Mini. Win rates and profit factors can be in the 80% range but depend on how much ATR the user seeks.

Mbi opus 1 stocks
MBI_OPUS #1 (Stocks)

The MBI_OPUS collection has been adapted from its original Futures design to also accommodate individual stocks. The customizable set ups within the MBI OPUS allow for targeted optimizations of specific stocks without violating the integrity of the original algorithms that each set up is derived from.

Mbi opus 1 nq

MBI_OPUS Futures showing a decades worth of trades on the Nasdaq. Despite the uniqueness and volatile nature of the Nasdaq, the MBI OPUS collection still generates impressive win rates and profit factors. Win rates are around 75% and profit factor over 2.5.

Mbi opus 1 fs

A culmination of two decades worth of market study and specialized math applications. The MBI Opus is a symphony of twenty plus unique configurations that produce an extraordinary win rate and profit factor while minimizing adverse excursion. Since 2004 to the present day producing an 80% win rate and a profit factor of 3.75, on over 400 trades since 2004.

Performance report for the mbi opus fs
Performance Report for the MBI_OPUS (FS)

Nothing to add here, as the MBI_OPUS speaks for itself with these numbers!

Equity curve mbi opus fs
Equity Curve MBI_OPUS (FS)

This equity curve points out the minimal draw down aspects of the MBI_ OPUS strategies.

Mbi opus 2

My current work …coming to your trading platform soon! MBI_OPUS #2 A subtle change in pyramiding trades creates individual exits for each of the over 20 Opus set ups and now incorporates the latest string algorithm in Power Mo #2.