Emini. S&P 500. Russell 2000. Futures. Charts.

In the majority of our examples, we have used a simple trading system that is based on the SBV indicator. In these examples, a 5-point advance was pre-determined as a satisfactory profit target while a decline of 5 points was used as a stop-loss level.

There are futures traders who prefer to close their positions before a session ends, and others who do not mind holding a position overnight.

Traders who generally do not hold positions beyond the end of the trading day may wish to consider implementing additional trading rules so as to avoid closing trades out at a bad time. They could for instance:

• Refrain from opening a new trade if less than an hour remains in the trading session;
• Reduce their target profit level from 5 points (as in our example) to 2 points if one hour or less remains in the trading day.

Chart 1: Establishing a long position based on the SBV indicator.
S&P 500 E-mini. VMA1 = 30-min

Important: The 66% level for the SBV indicator, 5-point satisfactory profit target, 5 points stop-loss level and 2 points reduced profit target were determined in relation to the prevailing market conditions at the time the examples were selected. In order to establish the optimal critical levels for the SBV indicator and other system parameters, traders should consider their personal trading style, risk tolerance, the prevailing market conditions, and they should review a chart history of prior volume surges (including the magnitude - i.e., the level reached by the SBV indicator).

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