| TCBR
System
 The
Trending Candle / Body Reversal (TCBR) investment technique
is a system that was developed by a professional investor
named Geert Strubbe. Mr. Strubbe is a personal friend
of mine and volunteered this system for inclusion within
the CSF and PFP software applications. The TCBR system
is an investment technique that embodies many of the
same principles of the Japanese Candlestick technique.
More information on the TCBR trading system can be found
within the PFP programs help file.
The
most obvious benefit of the TCBR system is that it works
very well in trending markets (such as the S&P,
the Currency markets and others). If an investor is
attempting to trade a market that exhibits a good capability
to trend, the investor should review the signals generated
by the TCBR system for effectiveness. When a PFP user
first loads a chart, the chart is scanned using the
TCBR system and users can enable the Vision Flags to
see where and when the TCBR system generated investment
signals. The TCBR system generates multiple investment
signals allowing investors to scale into a market position.
If investors do not choose to scale into a market, then
they should simply buy or sell into a market position
and watch as the trend continues. Remember to trail
your protective stop levels accordingly as new TCBR
signals form.
The
TCBR system tracks the markets ability to trend up or
down by identifying a pattern formation called a Trending
Candle (TC). A TC can be a black candle or a white candle.
If it is a black candle, the trend is presumed bearish.
If it is a white candle, the trend is presumed bullish.
Each subsequent TC of the same color will generate an
additional buy or sell signal and move a protective
stop level up or down. The only drawback to this technique
is when the market enters a congestion area. The TCBR
system will likely generate signals too later to be
profitable when the using it on a congesting market.
The
Trending Candle/Body Reversal (TCBR)principle is on
of the most unique and effective investment techniques
to be developed on the basis of Japanese Candlesticks.
Mr. Geert Strubbe is a market technician and trader
in Belgium. He has been using our software products
for over 4 years (as of 11/1997) and has been an active
speaker in Europe regarding his findings and investment
techniques. Mr. Strubbe has allowed us the rights to
include his techniques into our software applications.
The
TCBR trading system is a market trend tracking system
that incorporates a trailing stop, or breakout, level.
The breakout level is used to assist in insuring consistently
profitable trading results as well as to attempt to
limit the initial risk within the trade.
The
basic rules of the TCBR system:
1.
A trending candle = a candle whereas the open~close
range is greater than half the high~low range.
2.
The body reversal level is always the open price of
the current trending candle.
Although,
if a trending candle is found after a gap in price activity,
the body reversal level is moved to the lowest point
of a bullish gap, or the highest point of a bearish
gap.
3.
The trending candle is used to establish the existing
current trend. For example, if a white trending candle
is found initially, the trend is considered bullish.
If a black trending candle is found initially, the trend
is considered bearish.
Once
the initial trending candle is found and the direction
of trend and body reversal level is established, the
following rules apply:
1.
Any trending candle of the same color with a higher
close (in the case of a bullish trend), or a lower close
(in the case of a bearish trend), following the initial
trending candle is considered a takeover candle. With
this candle, the body reversal level changes to the
new level of the current trending candle and one should
watch for the next trending candle of the same color.
2.
Any trading session that closes below or above the body
reversal level (depending of the existing trend identified
by the initial trending candle) creates a Neutral body
reversal. The Neutral body reversal indicated that the
existing trend is Neutral and the existing body reversal
level is ignored. At this point, traders need to back
to the beginning of the rules for this investment technique
and wait for a new trending candle to establish the
trend and body reversal level again.
3.
Any existing trend and body reversal level established
by a previous trending candle can be reversed by an
opposite colored trending candle that closes below the
body reversal level (in the case of a bullish trend),
or closes above the body reversal level (in the case
of a bearish trend). This type of formation is called
a Trending Candle/Body Reversal.
Trading
with the Trending Candle/Body Reversal System:
1.
The first instance of the Trending Candle is the traders
first instance to enter a trade. Use the Body Reversal
level as a trailing stop level.
2.
Any additional instance of a Trending Candle of the
same color as the first instance is the traders chance
to add to their existing position in the market. Use
the Body Reversal level as a new trailing stop level.
3.
Any Trending Candle/Body Reversal is an instance where
traders should liquidate their initial positions in
the market and reverse positions. Use the new Body Reversal
position as a new trailing stop level.
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