Four Steps Trading Course
JFC Self Adaptive Indicator Signals
JFC Volatility Stop - System Trailer Indicator Manual
Volatility Stop – System Trailer Exit Manual
only a limited number of characters are allowed for the name of any study the
JFC Volatility Stop – System Trailer Indicator will be found in the Indicator
Listing as JFC VolStop SysTrail .
inputs for this indicator are
those used for the Volatility Stop Indicator.
Sens1 must be whole number, as decimals used here may result in an unreliable plot. The usual useful range here will lie between 7 and 35, although any whole number can be used. Values of 21 to 28 will be optimal. The lower the number used in this input value the more sensitive will be the plot. A more sensitive plot is defined as one which will plot closer to the actual price bars and will not adjust as quickly or as far away from the price bars. A more sensitive setting will result in an earlier exit than a less sensitive plot created by a higher input value.
Sens2 is also used to adjust sensitivity. In this case, decimal values may be used. In fact, I would encourage you to experiment extensively with fractional inputs for this value. Small changes in this input can make significant alterations to the resulting plots. It may be necessary for you to use decimal values to achieve the results you desire from this tool.
As with the Sens1 input, lower values will result in a more sensitive plot while greater values will decrease the sensitivity.
The useful range will be from 2 to 8, with being optimal.
Style, Scaling, Properties
Style, Scaling and Properties parameters are also identical to those used by the
JFC Volatility Indicator. Please refer to the manual section for the JFC
Volatility Indicator for further details on these settings.
The JFC Volatility Stop – System Trailer Indicator is virtually the
same indicator as the JFC Volatility Stop Indicator with one significant
The Volatility Stop
Indicator indicates a trend change when a price bar penetrates the red or blue
line. The trend changes from up to down when the market penetrates the blue line
plotted under the price bars. The trend changes from down to up when the market
penetrates the series of red lines plotted above the charted price activity.
Note that in each instance
the red or blue lines begin immediately after a trend change.
While the Volatility Stop
Indicator is very useful as an indicator of the present trend, it is not exactly
what is needed when the trader desires to use this tool to place an accurate
trailing stop behind an open position. Often the plots of the indicator will not
begin at the exact point on the chart where the system entered a trade since the
equations defining the system entry and those which set the plots for the
Volatility Stop Indicator may not indicate a trend change at the identical point
on the chart.
This can create a
significant problem for the trader in that the trailing stops as indicated by
the Volatility Stop Indicator may not reflect the exact trailing stop which is
To solve this problem the
Volatility Stop – System Trailer Indicator was created.
This Volatility Stop –
System Trailer Indicator plots only when there is an open position on the chart.
It will begin to plot as soon as a blue or red arrow appears, signifying a new
position. The indicator will begin its plot in the same manner as the Volatility
Stop Indicator. It will then trail along behind the position, showing the exact
location of the volatility stop for the long or short position.
Stop Exit Signal
The Volatility Stop Exit
Signal is a programmed exit that can be used to exit a trade from any entry
signal. It will automatically cause any position to be closed out when the price
activity penetrates the trailing red or blue line on the chart.
It is vital that the inputs
for this signal, which are identical to those used for the JFC VolStop
SysTrail indicator, be set to the
same values as those being used by the indicator. It these settings are not
identical the system exit will not occur at the same point as the indicator
When the Volatility Stop
Exit Signal is used as a part of the trading strategy you will notice that the
position is exited by the system as the System Trailer Indicator is intercepted
by the price bars.
The chart below displays the
relative plots of the System Trailer Indicator and the actual buy and sell
signals as placed by the strategy.
The Reversal Entry Point
Sell strategy has entered a short position slightly above 1112 at 12:36 pm. Note
that the System Trailer Indicator has begun its plot at the exact time that the
position is taken.
In much the same fashion as
the Volatility Stop Indicator, the JFC VolStop SysTrail plots a trailing
stop as the market moves lower in favor of the short position. When the price
bar crosses the trailing stop the system automatically exits the position. Note
that the exit designation at the point of the trade exit is labeled “System