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The appearance of a blue dot above a price bar indicates that this bar is a significant high defined by the sensitivity settings of the indicator.

The appearance of a red dot below a price bar indicates that this bar is a significant low defined by the sensitivity settings of the indicator.



Entry Options

1. Buy or sell at the market at the first appearance of a JFC Entry Point Indicator Dot. Higher risk.

2. Use this indicator as a confirmation of the trend as established by the JFC Exhaustion Indicator, the JFC Real Time Pivot Indicator and/or the JFC Reversal Indicator. Enter when the market trades through the blue or red dot thereby confirming the trend. Lowest risk. User Customizations

Inputs: Strength: Practical range will be 2 - 5. Two will probably be optimum. Lower numbers will give a higher sensitivity.

The most important aspect of this indicator is to realize that for a bar to be marked as a high or low there must be an equal number of bars both prior to and following the bar which, in the case of a high, have lower highs than the market bar, or in the case of a low must have an equal number of bars both prior to and following the bar which have higher lows. The strength input defines the requisite number of bars necessary to form the high or low.

Since there must be the requisite number of bars following the bar in question, the high or low will not appear on your screen until the correct number of bars have been plotted. Therefore, in the case of a high, the high bar will not be marked when it appears - it must wait the strength number of bars to be marked. This feature of the indicator reduces the effectiveness of the highs or lows since their appearance is delayed in real time.

The prime use of this indicator is its ability to identify short term support and resistance. If the market trades through a blue dot which marks a high (resistance) the trend is confirmed as an uptrend. If the market trades down through a red dot (support) the trend is confirmed as a downtrend.

This indicator is most useful when used in combination with a second trend defining indicator. There are many indicators which can be referred to as trend definition indicators. We use the JFC Reversal Indicator as our prime trend definition tool. Others are the JFC Real Time Pivot Indicator, the Clayburg Directional Day Filter Indicator, and the JFC Volatility Stop Indicator. Other indicators can also be used for trend definition i.e., stochastic, RSI, Percent R, MACD, etc.

A practical demonstration of the use on this indicator would be the case in which the JFC Reversal Indicator was displaying cyan dots below the price bars. When the cyan dots cease to appear the downtrend becomes suspect. When the market trades up through the last blue dot formed by the pivot indicator the trend is confirmed as being higher for the short term. Conversely, when the magenta dots cease to appear the uptrend becomes suspect. When the market trades down through the last red dot formed by the pivot indicator the trend is confirmed as being lower for the short term.

Optimal settings will vary with the market to which the indicator is to be applied, the data compression in use and the degree of sensitivity desired by the individual user.

The trick to making this indicator as individually useful as possible is the constant observation of its activity in real time as well as on historical data. It is also important to periodically adjust settings and data compressions to obtain settings which closely match current trend changes in the market being observed.