Track 'n Trade Bulls 'n Bears Trading System
Adding a Position, and Market Re-Entry
Let’s talk just for a quick minute about the settings within the Bulls 'n Bears System.
The first thing I want to cover is the Style settings.
The Style settings are an easy way of setting up the software to give you a visual clue as to when the market changes from Bullish to Bearish.
The default setting is Price Bars, which changes the color of the overall trend, green for bullish, red for bearish, and yellow for neutral. When you see a chart with the historical price perspective, you can instantly see the power of this tool.
Here’s an example chart without the Bulls ‘n Bears indicator.
Here’s the same chart with the Bulls ‘n Bears indicator.
It’s like turning on a light in a dark room.
Rather than changing the price bar colors to red, yellow and green, the Bulls ‘n Bears system can also place small dots, squares, or X’s above the price bars, allowing you to still use traditional Open, High Low, Close bar coloring, or Candlestick coloring schemes in addition to the Bulls ‘n Bears simultaneously.
The next setting is the Formula setting.
There are three basic mathematical formulas built into the Bulls 'n Bears Trading System. We've apply named them the Traditional, the Progressive, and the Aggressive. The differences are basically how aggressive the signals are generated.
The formulas used for creating the Bulls ‘n Bears color coding and signals are proprietary, but what we can tell you is that the Traditional formula generates Buy and Sell signals more conservatively, waiting for markets to make a more substantial move prior to giving its Buy and Sell indications, after crossing a wider calculated neutral (yellow) zone.
The Progressive formula is just slightly more aggressive than the Traditional formula, producing a smaller neutral (yellow) zone, which in return provides the Buy or Sell signals a bit more quickly. Sometimes this formula may get you into the market a little prematurely, but the advantage of an earlier entry signal will usually produce higher profits.
The Aggressive formula produces the most active Buy and Sell signals, with the earliest possible signals. This formula eliminates the Yellow or Neutral zone altogether, and displays the buy sell arrows immediately as the market crosses the Bullish Bearish threshold.
This formula is usually the choice for day traders, who trade on very small time frame charts, such as range bar charts, or 1, 5, 10, or 15 minute time periods, and is more akin to traditional indicators you might already be familiar with.
This formula has a tendency to create some whipsaw, so use it with caution; I think you’ll also find that it works best in very active markets.
Adjusting the variables behind these different formulas is done through the Sensitivity Slider located at the top of the Bulls ‘n Bears Control Panel.
Each formula is made up of several different mathematical models that determine the nature of the trend within the market. A single sensitivity slider is used to adjust all the formulas simultaneously since they’ve been hyperbolically linked together; in other words, when we change one variable, it automatically adjusts the other variables within the formula to match. This is what makes the Bulls ‘n Bears indicator so powerful and dynamic.
The next setting I want to talk about is the Blue Light system.
The Blue Light settings allows us to turn on the mathematically calculated auto-trailing stop loss lights, which allows us to trail the market with mathematically calculated Stop orders, calculating when the proper time to exit the market is.
The Blue Light System is dynamically linked between our modified Parabolic SAR and the Bulls 'n Bears formulas, which allows us to create a another hyperbolic link between the different formulas used to create the Buy and Sell signals vs. the Stop Loss signals.
Adjusting the sensitivity slider adjusts the hyperbolic link between these two indicators. A wise trader once said, “Never use any one tool exclusively.” It's for that reason that we've combined so many powerful tools and methods into a single dynamic trading system.
The Blue Light also has the ability to turn on buy and sell arrows, providing early entry and exit signals based on the dynamic relationship between the Blue Light System and the Bulls ‘n Bears formulas. These entry and exit arrows are controlled by the same sensitivity slider as well, providing a complete multi-system trading tool designed to cover all aspects of trading.
The next setting is the Display History setting.
If you turn on the show Full History setting, this allows you to look back in time and see the historical visual cues provided by the Bulls 'n Bears.
This is important, because we use these historical visual cues to “tune-in,” or to setup the indicator. Once we’ve tuned-in the indicator by sliding the sensitivity slider to the optimal setting, based on the historical visual cues, we then use those settings to move forward in time with our trading plan.
Next, let’s talk about the Bullish/Bearish arrows.
These arrows tell us when a market has changed direction from Bullish to Bearish. We use these arrows to help us determine our entry and exit points along the trend. We also use other visual and mathematical cues such as the change from Yellow to Green or from Yellow to Red, therefore we don't look at the arrows as buy, sell arrows exclusively.
And of course, you have the ability of having the arrows displayed, or not.
Filters are used to help us filter-out bearish buy or bullish sell signals, to reverse our math formulas, and to also ask the software to add additional buy and sell signals.
In another video we talk about which is which and why we use one or the other, but it’s here in the Settings Panel where we can ask the software to actually filter those signals out for us, if we so choose.
If a Buy or Sell Signal happens to fall on a Price Bar that happens to be an Inside Day and we have this filter selected, the software will disregard that Buy or Sell signal, and wait for another Price Bar before issuing the signal.
What is an inside day? An inside day is a price bar where the high of the bar is lower than the previous price bar, and the low is higher than the previous price bar.
If the Higher/Lower filter is turned on, the system will skip any buy signals where the signal bar closes lower than it opened. Inversely, filtering out any sell signals where the signal bars close is higher than it's open.
The Higher/High, Lower/Low filter
This filter is a bit more aggressive, if this filter is turned on, the system will skip any signal bar where the signal bar close is not higher than the previous bars high, or any sell signals where the signal bar close is not lower than the previous bars low.
Have you ever thought to yourself, “Wow, if I would have just bought every time I got a sell signal, or sold every time I got a buy signal, I would have won every single trade.”
Well, we’ve thought the same thing. Sometimes you can tune an indicator or system to such an extreme, that it makes for a fantastic contrarian indicator, and so we have added this reverse formula filter functionality that we may consider if we ever tune the sensitivity to one extreme or the other.
Arrows On All Color Change Filter
Some indicators, such as the Stochastics indicator, throw multiple buy signals in a row, some indicators don’t, they only have one buy signal for each sell signal, such as Moving Averages.
The Bulls ‘n Bears indicator has the ability to do both, you can set it up to provide you with a new arrow each time the market moves from yellow green, or from yellow to red, or you can tell the indicator to only provide one bull signal for each bear signal, which will only throw a signal on the first bullish or bearish move, which the software is set to do by default.
In this chart, you can see that we only have one buy signal for each sell signal, allowing for a smooth swing trading strategy.
In this same chart, you can see that we’ve turned on the filter “Arrows On All Color Changes.” This filter has the Bulls ‘n Bears throw a new signal each time the market moves from neutral to bullish or from neutral to bearish.
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