Color-Based System. Here is a daily chart of the SPY with Kraut’s indicator and strategy plotted. Entries are on the next bar following a green or blue volume bar, and the exit is a trailing stop based on a percentage amount below the highest bar close since entry.

-In “A Color-Based System For Short-Term Trading” in this issue, author Edgar Kraut describes a swing-trading system that utilizes the color of volume bars. It is based on the relationship of the current bar’s close and volume as compared to the close and volume 10 bars ago.