The Spectrum trades are the latest additions to the trading signals provided by GemsBot. They differ from the Power trades in a number of ways. They are auto refreshing eight times per second instead of the usual five seconds steps. This way they respond better in a market environment where high frequency trading is on the increase.
They are designed so that you can scale in and out of a trade using either the five distinct entry and exit signals or any combination that suits your market exposure profile. You will find them much easier to trade since there are no numbers involved. Entries and exits are to be executed as soon as possible at the prevailing bid or ask price. You enter a trade the moment you see the cells you follow to have a value in them and you exit when the value of the cell is removed. So the time for entries and exits is given while the price is always the current bid or ask.
If your trading platform has at the bid or ask buttons, like Ninja Trader does, all you do is to click that button to enter or exit a trade. Needless to say that you should have preset trade management profit taking and stop loss that suits your own trading profile.
The five distinct levels of entries and exits are color coded with the corresponding cells background color. There is also an additional color coding with the cells font color, which groups the three middle levels into one level, and should be used if you wish to scale in and out of a trade in three steps as outlined below.
Trading the Spectrum trades
The recommended way of trading the Spectrum trades is by using a maximum exposure to the market at any time of three contracts or multiples of three. This way scaling into and out of a trade is feasible.
Early Bird trade The first contract should be entered when the row with the level +1 or level -1 change from gray to either greenish or reddish background. You should enter a long trade at the current ask price or a short trade at the current bid price respectively. This trade is in effect an Early Bird trade that develops at the preliminary stages of a trend.
Entering profit taking and stop loss values simultaneously with your order is essential. There are recommended values in the Trade Management page in this site for the Spectrum trades and you should adjust them to suit your own tolerance to risk. Bear in mind that they differ according to the current volatility of the instrument that you are trading and the number of contracts that you are trading with.
Exit signal for the Early Bird trade is triggered when the row with the level +1 or level -1 reverts to gray color, unless of course the trade has been previously closed with profit taking or stop loss.
Confirmation trade The second contract should be entered when anyone of the rows with the levels +2, +3, +4 or levels -2, -3, -4 change from gray to either greenish or reddish background. You should enter a long trade at the current ask price or a short trade at the current bid price respectively. This trade takes place when a trend has been confirmed and is the mainstay of the Spectrum trades.
Exit signal for the Confirmation trade is triggered when anyone of the rows with the levels +2, +3, +4 or levels -2, -3, -4 reverts to gray colors, unless of course the trade has been previously closed with profit taking or stop loss.
Completion trade Finally the third contract should be entered when the row with the level +5 or level -5 change from gray to either greenish or reddish background. You should enter a long trade at the current ask price or a short trade at the current bid price respectively. This trade appears when the trend has been completely established and it remains to be seen how long it will last.
Exit signal for the Completion trade is triggered when the row with the level +5 or level -5 reverts to gray color, unless of course the trade has been previously closed with profit taking or stop loss.
Comments In any trend period the Spectrum trades can open and close more than once and they should be followed each time.
If your maximum exposure to the market is only one contracts at a time, which by the way is the most difficult way to trade, then you should follow the Confirmation trades only.
If your maximum exposure to the market is up to two contracts at a time, then you should follow the Confirmation and Completion trades.
