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"The Ducati Stop & Go Indicator"

First let's recap the "The Ducati blue bar strategy". The strategy is simple in its execution by buying a position on the bar after the first "Blue" bar & "Sell" that position on the bar after the first "Red" bar. The new "Ducati Stop & Go Indicator" is just as simple. "The Ducati Stop & Go Indicator" displays red & green bars indicating when it's safe to trade & when it's not.

How does the indicator work?

Quite simply if you have a "Green" bar you are good to buy, if the bar is "Red" stop trading. My initial research uses the correlation of the "S&P/ASX 200 Accumulation Monthly Index (XJOA)" applied to individual stocks. The indicator uses a "Monthly Periodicity" of the (XJOA) for smoothing effect. The periodicity of your trading strategy is insequential.

When is it safe to trade?

When it comes to answering "when is it safe to trade?" & "when do you decide to pull the trigger?" is answered by "The Ducati Stop & Go Indicator" that uses traffic lights. Green means GO & Red means Stop, the yellow ribbon means to be cautious.

Charts to come

In the next post I'll throw up some charts to see if the traffic lights picks up the scary trading periods correlated against "S&P/ASX 200 Accumulation Monthly Index (XJOA)". 

Skate.