Indicators and Drawing Tools

To begin using OT Signals, select a trading vehicle (e.g. GOOG, Figure 1), then select a timeframe. You will have the option of selecting settings and indicators according to your preferences and in three different timeframes: intraday, daily and weekly. Please allow up to 24h for your account to be set up, and for your login credentials to be emailed to you (see Welcome to OT Signals for more details).

Once you chart a new symbol, and select your favorite indicators, that symbol will be automatically saved to My Stocks. You can later delete symbols from that list, or chart them directly by clicking on them. The last symbol saved in My Stocks will keep its indicator selection and determine the indicator settings for all other symbols in the list. Typing a new symbol in the "Symbol" window (above the chart) will result in a chart with default indicators (Swing, Pivot Line, Swing Time and Volume).

(Note: Buys, Sells and Holds are our daily ratings, swings are intermediate term, and trends are longer-term indicators.)

At the end of the Indicator section we discuss briefly how to use the Drawing tools.

It is recommended that you clear your web browser's cache regularly so you wont miss any new features when they are first introduced (Ctrl + F5).

The indicators are divided into three groups depending on the panel in which they are displayed: top (price panel), middle (indicator panel) or bottom (volume panel). 


PRICE PANEL (top):


Figure 1

1. Buy, Sell, and Hold (BSH) Indicators 
Our algorithms categorize every price bar as a Buy, Sell or Hold. Buy bars are assigned a value of 1, sell bars are assigned a value of -1, and hold bars are given a 0. These BSH ratings can be viewed two different ways (Figure 1).

A. Candlesticks and OHLC Bars (top panel): Buy bars are painted green, sell bars are red, and hold bars are blue/white (light red with the new color scheme).

B. BSH Line Indicator (top panel, grey line): The BSH line displays the cumulative total of the assigned values of the buy (1), sell (-1) and hold (0) bars over the selected period. For example, if there are 3 buy bars in a row, the BSH line will advance 3 points. If a hold bar follows, the BSH line will remain flat. After 2 sell bars, the line will decline 2 points. The absolute value of the BSH line is not important. It is the direction of the line that determines the signal while also showing the signal’s past action. 

2. BSH LTF Indicator 
One of the biggest challenges for traders is to stay with the trend and avoid whipsaws. One way to mitigate this risk is to adopt a top-down approach to analysis i.e. to consider what the indicators you are using in the current time frame (e.g. daily or weekly) are doing in a longer time frame (LTF, e.g. weekly or monthly). To help simplify this type of analysis we introduce the LTF group of indicators. These indicators will allow you to view in the same chart information for two different time frames. How to interpret and use this information is explained in Trading Strategies section.

The BSH LTF Indicator displays the same information as the BSH indicator, however, in a longer time frame (in daily chart it will display weekly results).

3. BSH Combo Indicator 
Combines the power of the BSH and the BSH LTF Indicator to create a composite two time frame indicator

4. Swing Indicator
The Swing Indicator filters out certain Hold and Sell bars when prices are making higher highs, and certain Hold and Buy bars when prices are making lower lows, to isolate price swings. This indicator is particularly useful to swing traders trying to capture short-term price moves. The Swing Indicator can also double as a reference tool for identifying Elliott waves and their types (motive or corrective). An OT Signals “swing” is equivalent to an Elliott Wave Theory “wave” (Figure 2). 
In an uptrend, the length of upswings should exceed the length of downswings (counter-trend moves), and vice versa. Please keep in mind that the Swing indicator  is meant to show where swings, as identified by the algorithm, start and end. The absolute level of the indicator has no real meaning, and has nothing to do with the price levels displayed on the chart. 


Figure 2

5. Swing LTF Indicator
The Swing LTF Indicator displays the same information as the Swing Indicator but in a longer time frame (in daily chart it will display weekly results).

6. Swing LTF Combo Indicator 
Combines the power of the Swing and the Swing LTF Indicator to create a composite two time frame indicator

7. Swing Angles Indicator
Solves the age old problem of finding the correct angle rise (step) for a given price price level adjusted for volatility. Automatically calculates the correct step (price incremental increase/decrease for drawing the angles) and displays 1 x 1 angles from swing highs and swing lows. Users have the ability to select harmonic angles. Works great as a filter for the Swing Indicator by showing you when to avoid being taken out of a trade by minor counter trend swings.
In the current version, for ease of use and to avoid cluttering the screen, the Angles are separated into two different indicators: Swing Angles Up, and Swing Angles Dn.
NB  The problem with the appearance of all the Angles indicators has been. Please clear your browser's cache.

9. Up/Down Channels
These two indicators let you automatically display channels based on the Swing Angles indicator. Channels help greatly in estimating future price targets, and areas of support/resistance. They also make it easy to compare current with past cycles and swings. Use the width multiplier to adjust the width of the channel.

10. Swing Degrees Indicator
Similar to the Swing Angles indicator it automatically calculates and displays 1 x 1 angles from swing highs and swing lows but the step is calculated in terms of degrees. Users have the ability to select harmonic angles. Works best with daily and weekly charts. It can be used as a filter for the Swing Indicator by showing you when to avoid being taken out of a trade by minor counter trend swings.

11. Swing % Target Indicator
Calculates and displays long/short targets based on input values derived from the Swing % Indicator (see below). Triggered only if there was a new price swing within the last 10 bars.

12. Stop/Loss (S/L) Indicator


The S/L Indicator assists with money management by identifying the price level above or below which to place a stop loss order (Figure 3).

 
Figure 3

13. Trailing S/L Indicator
The Trailing S/L Indicator helps you manage your risk by adjusting the S/L level once you're in the trade. When this indicator is selected, the exact S/L levels are visible in the chart pop-up window which appears when you hover over a price bar (Figure 4).

Figure 4

14. Simple and Exponential Moving Averages
Moving averages are the most popular technical analysis tools. Both SMAs and EMAs smooth price fluctuations and help identify trend directions.

15. Pivot Line
The Pivot Line is our proprietary indicator that is meant to be used mainly as an entry or exit signal along with the Swing Indicator. The horizontal purple dotted line shows the current level of the Pivot Line indicator, while the dashed curvy line shows the previous values. Please note that our Pivot Line is not the same as a floor traders' pivots. More details will be provided in the Trading Strategies Guide (Figure 5). 

Figure 5

16. Hashi
Hashi is a proprietary, dual purpose indicator which takes its name from the Japanese word for chopsticks. Hashi identifies the short ( red ) and longer ( blue ) trend and can also serve as price entry and/or exit tool such as a stop loss indicator. The Hashi lines are not regression lines (Figure 6).


Figure 6

17. Channels
Channels are based on J.M. Hurst's theory described in his book The Profit Magic of Stock Transaction Timing. Channels are a powerful visual aid for defining a trend and determining the trading range. A properly drawn channel should include all but one or two extreme data points. Users can adjust the range of the channels to suit their individual trading objectives (Figure 7).


Figure 7

18. TITM (The Idiot and the Moon)
The TITM Indicator is part of a three-timeframe system developed by Randall Ashbourne and based on the lunar cycle (Figure 16). It is supposed to be viewed together with the Moon Phase indicator (see below). [Visit Ashbourne’s website to learn more.]


19. Swing Combo
The Swing Combo combines the best features of the Swing Indicator and the TITM setup.


20. Bull Trend Indicator
The Bull Trend Indicator keeps you invested in a bullish market when countertrend bearish moves shakeout other investors. You can control its sensitivity to a countertrend selloff by adjusting its settings (Figure 8).


Figure 8

21. Bear Trend Indicator

The Bear Trend Indicator keeps you short in a bearish market in the face of countertrend rallies. You can control its sensitivity to fit with your risk tolerance (Figure 9). Both Bull/Bear Trend overlays work well in conjunction with the % Bulls and Liquidity Indicators described below


Figure 9

22. Trend Bars™  Indicator 
Trend bars are designed specifically to eliminate noise from random price moves, and provide a novel visual approach to defining trend. They tend to get longer, when the trend strengthens, and shorter when it weakens or is about to end. It is recommended that Trend Bars™ be viewed along with a line dot, line or step price line to avoid cluttering the screen.
As the name implies, Trend Bars™ incorporate a trend component, and should be expected to be a little less responsive to price swings compared to the Swing indicator. It won't be unusual, however, for both indicators to change direction at the same time or within one price bar.
In addition, the Trend Bars™ values can be used as hidden support/resistance/reversal levels.


 22. SAR Angles  Indicator 
This is a stop-and-reverse indicator based on angles drawn from swing highs and lows. The correct step of the angles is automatically calculated for the specific security and time frame. The indicator changes direction when the price crosses above or below the angles, or remains flat if price is caught between the angles. In summary, it tells you at a glance whether the security is in a strong or weak position, and whether it is trending up, down, or sideways.




INDICATOR PANEL (bottom) 

1. BSH Bars Indicator
The green BSH Bars Indicator displays the same information as the BSH Candlestick Indicator and the grey BSH Line Indicator but in a different +/- form (Figure 10).


Figure 10

2. BSH LTF Bars Indicator 
The BSH LTF Bars Indicator displays the same information as the BSH Bars Indicator but in a longer time frame (in daily chart it will display weekly results).

3. BSH Combo Bars Indicator 
Combines the power of the BSH and BSH LTF Bars indicators

4. Swing Bars (Duration) Indicator
The Swing Bars (Duration) Indicator helps you gauge whether the current swing is nearing exhaustion. It is based on the Swing Indicator and shows whether the current swing duration is less than average (0 value), more than 2 times average (2), more than 3 times the average (3), etc. (Figure 11).


Figure 11

5. Swing LTF Bars Indicator 
Swing LTF Bars Indicator displays the same information as the Swing Signals Indicator (point 9 below) but for the next longer time frame. Upswings are assigned a 1, downswings are assigned a -1 value. 

6. Swing Combo Bars Indicator 
Combines the power of the Swing and the Swing LTF Bars indicators.

7. Swing Time Indicator
Swing Time is a dual indicator which shows the beginning and end of the current swing while displaying the average duration (dotted purple line, Figure 12). It is a convenient visual aid for identifying swings lasting longer than the historic average.


Figure 12

8. Swing Time Plus

Swing Time Plus displays the same information as the Swing Time Indicator but in a slightly different form. Upswing bars are displayed as positive numbers; downswing bars are displayed as negative numbers. Swing Time Plus also displays two averages, one for upswings and one for downswings (Figure 13). The black dotted line represents the ratio between the length of upswings and downswings. Stocks in an uptrend usually have a Swing Time ratio > 1, while stocks in a downtrend have a Swing Time ratio < 1. Non-trending stocks have a ratio close to 1. This indicator is used as the basis for the Trending scan.


Figure 13

9. Swing % Indicator 
Swing % is a dual indicator showing the % Gain/Loss for the current swing while displaying the average historical % Gain/Loss and Swing % Ratio (dotted horizontal lines, Figure 13A). It is a convenient visual aid for identifying swings which have advanced/declined more than the historical average. Stocks in an uptrend usually have a Swing % ratio > 1, while stocks in a downtrend have a Swing ratio < 1. Non-trending stocks have a ratio close to 1. This indicator is used as the basis for the Trending % scan.

Figure 13A

10. Swing Signals
Swing Signals displays the Swing Indicator readings as positive and negative values. Upswings are given a 1, downswings are assigned a -1

11. OT MACD
OT MACD is another popular technical analysis tool but is calculated based on our own set of moving averages to avoid the lag associated with the traditional MACD. This type of calculation provides a more timely and accurate momentum reading (Figure 14).

12. Moon Phase 
The Moon Phase displays in linear format the phases of the Moon. Many academic studies show a link between the Moon’s phases and stock prices. Now you can draw your own conclusions. New Moons correspond to peaks in the line while Full Moons are troughs; Quarter Moons are on the zero line (Figure 14). When you hover over the chart, the pop-up window will tell you the Moon’s phase. The theory behind the TITM indicator (see above) is linked to the Moon's phases and is well researched and documented.


Figure 14

13. Volume

Displayed in bar format. 

14. Power
The Power indicator is a gauge of buying/selling pressure for a particular time period (intraday, daily or weekly bar). It ranges from 0 (max selling pressure) to 100 (max buying pressure). It is interesting to note that the cycle component of the Power indicator matches the readings of the Swing indicator.
When the Power indicator is > 50% there is a 75% chance that the close will be higher than the close of the previous bar.

15. Bottom Finder
Spikes in the Bottom Finder indicator are designed to isolate low risk/high reward long entry points. The indicator is helpful in confirming long swing entry points. When used in trending markets it points to opportunities to pyramid a long position. 

 
Drawing Tools

OT Signals has a growing list of drawing tools which, for the time being, include trendlines, angles and Fibonacci retracements.

To activate any one of them you need to click on Draw, and then select one of the drawing tools you want to use. Once a drawing tool is selected, you may draw as many of them as you like by moving your cursor over the price chart and clicking on the selected price bar. To prevent the program from drawing any more lines, angles or retracements, you need to click the Stop Drawing button. To erase a line or retracement you just need to click on them. To erase all your drawings click on the Clear button.

An Angle with a step of 0 will plot a horizontal line.
A step with a minus sign (-) in front of the number will draw an angle pointing down right.
To draw a channel, use the same step and draw the same Angle from a swing high or from a swing Low. 

The step from the DJIA Step list can be used to draw the proper angle for DJIA component stocks without guessing or optimizing. 
Using the Swing, the Swing Signals, or the Stop/Loss indicators can help with selecting high or low bars from which to draw the angles  (Figure 15).  

Figure 15 

HISTORICAL DATA

To help perform historical studies, OT Signals has incorporated DJIA data going back to 1885 broken into 10 year increments (symbols DJ1885, DJ1895, etc.) and SP500 data going back to 1962 (symbol SP-500). The DJxxxx data is static and will not be updated. For current DJIA data please use symbol ^DJI. The SP-500 data is being updated after the close. For current and intraday SP500 data please use symbol ^GSPC.