What does a Buy Signal look like in SignalBox? Below you can see we have received two confirmations on the charts and received a “Buy (maybe)” signal with a yellow proceed and a green buy maybe.
What does a buy signal mean?
A buy signal means that:
- Our signal indicator (the Trend indicator in the bottom right), has achieved it’s goal of momentum and separation, indicating for a possible reversal. You can see this in the chart represented by the large gap between the two lines with green on top.
- The overbought / oversold indicator on the second panel up from the bottom right has achieved its goal of oversold.
Should I enter a trade?
In this case, we do have confirmations on our primary two indicators that a buy trade is possible. However, there is reason for caution as the price indicator is still pointing down and the candle bars on the top left clearly show we recently had a very strong uptrend, followed by a strong down trend, and that we are currently floating midway between.
One further indication is that the candle bars show we are heading down to the level tat was previously resistance, which could now act as support.
The final decision lays in your hands whether you have enough confirmation to enter a buy trade under these circumstances.
How did this trade turn out?
As you can see above, we did get a reversal up as the indicator dictated we might, however it is still too soon to see how strong this reversal winds up being.
Ultimately, in the end, we did get a rather large upwards reversal following this buy signal. Due to the risk of this trade, as described and interpreted earlier on, there was some significant selling in the middle of this trade.
Based on the initial reversal, and significant secondary upwards movement, I would say this was a valid Buy Signal that would likely be profitable given proper risk / reward management.
Overall, I feel confident that the SignalBox and this buy signal properly identified a potential buying opportunity even amidst the risk and uncertainty.
