Smart Volume Analysis Four Step Method 2.0

Smart Volume Analysis Four Step Method 2.0

Most visitors to our website are familiar with the Four Step Method.  It was/is a huge game changer in terms of making our software very easy to master and profit from.  Even though there are many ways to use and profit from Smart Volume Analysis and our software the Four Step Method is still widely used and for good reason however, one thing became apparent after the release of our Smart Trade Advisor…  The VBS (Visual Background Scanner) step in the original method would tend to be a bit more restrictive than is necessary.  The original version of this method was written before the creation of our Smart Trade Advisor Module which up until that point was a checklist of sorts in the client area.  This new version of the popular method replaces the VBS step with an advisor warning check instead and is an excellent filter for most entries and it opens up many more trade possibilities without increasing risk.  I will put some notes at the bottom as a guide to some other uses for the Advisor (2) and VBS (5) for trade selection.

I am trying to be as succinct as possible with the guidelines for this newer version of the method but if you have any questions please contact us at the support link above and I can help. This document will also reference a few links in the article as part of the process so let us know if you have any questions regarding those as well.

In this newer version of the Four Step Method there is only one significant change to be aware of.  Instead of checking the VBS (5) for trade entry confirmation, we look to the Advisor (2) instead.

  1. Look and see if a trade signal has just appeared on our chart (1) (If no signal exists it will be clear from the Signal Information Text Area (Number 6 on the screenshot and in brackets) If a signal exists it’s name and meaning will appear in the signal information area (1)
  2. Check the advisor warning if any (2)  If no warning exists, a trade can be opened in the direction of the signal’s meaning (Long for Strength and Short for Weakness)
  3. The signal’s EOM (3) is the target for this method.  Typically the safe target is what you would select as your “Take Profit” level (23 pips in this example).  Catalyst signals and those with or without warnings can change this (Refer to the notes below) Please also refer to the EOM document for information on how these targets are derived.
  4. If the trade hits the target (EOM) it should be closed.  If the trades goes for the full bar it should be closed at the end of the bar.

Screenshot of Smart Volume Analysis Four Step Method 2.0 Steps:

Click Here To Open The Smart Volume Analysis Four Step Method 2.0 Screenshot

 

Screenshot Text:

Smart Volume Analysis (Four Step Method 2.0 Advisor Variation)

1. Signal Bar (Smart Signal is Painted Here)
1. Signal Name and Meaning Appears Here
2. Smart Trade Advisor Warning Area (Trade Warnings (If Any) Appear Here)
3. Signal Target (Safe EOM is Target for most trades)
4. Trade Bar (Trade is opened at start. If trade doesn’t close at target (23 pip profit), close once bar has ended.)
5. MTF Visual Background Scanner (Refer Here *if* General Trade Warning Exists for Current Time Frame Background)
6. Signal Information Area (Enclosed in bracket)

Notes:

  • *If* the Smart Trade Advisor is showing a warning for the trade but not one we specifically avoid as per the advisor document in the client area, it makes sense to consult the VBS for the current time frame at that point for additional confirmation.
  • A trade should always be closed after one bar for this method by design however, I sometimes wait to see what, if any signal appears on the next bar and will leave the trade open if a new trade with the above criteria presents itself.  This is risky and should only be used by those with a fair amount of experience with Smart and Smart Volume Analysis

There are a number of methods you can use with Smart but the four step is one of the easiest to master which is why we use it as the introductory method to get started trading Smarter. As you gain more experience with Smart and Smart Volume Analysis, you can move on to other methods (such as the Smart Signal to Signal Method). Smart is a visual system and as such you will likely start to notice patterns and develop your own methods very quickly as well.

For more information or if you have any questions about SMART Volume Analysis (SVA) and Smart Volume Spread Analysis (VSA) the methods, or our Software (Smart Trader) please contact us using the support link.

You can also visit our Live and Free VSA (Volume Spread Analysis) Chat, Trading Rooms, and our other free volume spread analysis resource sites (linked below) to learn more.

For information on our real time, volume based trading alerts, Click here.
Good luck trading and see you in the groups.

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