The interpretation of the SmartMass indicator assumes that on periods when volume increases, the "uninformed" investors are in the market. Conversely, on periods with decreased volume, the professionals and smart investors "smart money" is quietly taking positions. The indicator is based on the concepts Explained in Stock Market Logic, by Norman Fosback. I added a proprietary algorithm to give more reliability selecting the best entry.
SmartMass is a usefull indicador. Combining this indicator with a basic study of the price action becomes a reliable tool that will help us make our trading decisions. After two years testing the different signals, the best setups are described in the examples (graphics attached). There are four types of setups:
- Breakouts and pullbacks in strong bull breakout and strong bear breakout
- Breakouts and pullbacks in strong bull channel and strong bear channel
- Breakouts and pullbacks in weak bull channel and weak bear channel
- Reversals after breakout the major trend line (different reversal patterns: flags, wedges, double tops and bottoms, head and shoulders, triangles,...)
Always use protective stop loss. Never use this indicator to make decisions into tight trading ranges. Only trends, channels or reversals.
Thanks and good trading.