I have often been asked about the blue and yellow lines plotted over the price bars on my trading charts. Those two lines, combined, make up my proprietary technical indicator named “Relative Momentum Indicator” (RMI). The RMI is the one thing that truly sets TBL apart from any other trading method.

The RMI is used to determine the locations of the SRVs that are so important to the TBL method of short term trading. Additionally, the RMI, is used to predict short term price direction, a potential change in trend direction and last, but not necessarily least, to tell me when it’s time to exit a trade. The RMI is my most trusted means of executing a trailing stop.

It is possible to implement the TBL trading method without the RMI – but the RMI makes it so much better. Currently, the RMI is only available to TradeStationTM users. However, we will be looking for other charting platforms capable of producing the RMI. If you have a charting platform that you would like to have the RMI made available for, please contact me – use the contact form on the website. Please check with your software provider prior to making your request and confirm that the software is capable of:

1. Creating custom indicators within their platform.

2. The ability to plot technical indicators (2) over the price bars without axis values.

Without the above capabilities I cannot create the RMI.

The RMI for TradeStation is available from the Strategy Network for an extremely modest cost – I did not want anyone to be deprived of using the RMI because of cost. If you are a TradeStation user, by all means try the RMI – we find it invaluable. If you are not a TradeStation user you might want to give it a try – I understand that they have several programs available to new users providing the platform without a monthly charge.

The RMI is shown in Figure 1.

Figure 1

The chart in Figure 1 displays the E-Mini for the period of July 5 through July 23, 2013.

Note that there has been a moderate uptrend for the period. Note that the RMI (the blue and yellow lines plotted over the price bars) have descended from above the price bars to below the price bars. This often indicates a change in trend direction may be imminent, so I will be alert to watch for a change in trend on this chart in the near future.

I will discuss the RMI frequently because it truly is an outstanding and versatile indicator and does so much to enhance the TBL method.

 

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