SONIC RV3

Overview of the System

The Sonic R trading system revolves around several indicators and a wave analysis method to identify potential buy and sell opportunities in the market. Here is an overview of the system and buy and sell rules:

Indicators Used:

  • QQE (Quantitative Qualitative Estimation): An oscillator similar to RSI, used to gauge market trends and conditions.
  • CCI (Commodity Channel Index): An oscillator set to a period of 63, used to show the trend direction.
  • NVO (Normalized Volume Indicator): Displays the volume of trades for a certain period, with different colors indicating volume levels relative to the average.
  • 89EMA (Exponential Moving Average): An exponential moving average set to a period of 89.
  • ZZFractal (Optional): Helps visualize market waves.
  • TRO Tunnel Dragon: Includes three moving averages (34-period EMA applied to high, close, and low).

Time Frames and Trading Times:

  • Recommended time frames: M5 and M15.
  • Recommended trading times:
    • 1 a.m. – 4 a.m. EST (UK session)
    • 7 a.m. – 11 a.m. EST (US session)

Currency Pairs:

The system can be used with any currency pair, though EUR/USD and GBP/USD are suggested. Adjust stop-loss levels for XXX/JPY pairs.

Wave Analysis:

Key terms: L (Low), H (High), LL (Lower Low), HH (Higher High), LH (Lower High), HL (Higher Low)

  • Uptrend: Series of HH and HL
  • Downtrend: Series of LH and LL

Buy and Sell Rules

Buy Entry:

  • Identify a LOW in the price, followed by HIGHER LOWs (HL).
  • Look for a candle closing above the upper white line (upper band of the tunnel dragon indicator).
  • Place a buy stop a few pips above the high of the candle.

Conditions for Buy:

  • QQE above the 50 line and sloping up.
  • CCI above the zero line and sloping up, with the middle line preferably green.
  • A volume surge in the NVO indicator is preferable.
  • The slope of the Tunnel Dragon should be steep (1 to 2 o’clock angle).
  • General trend should be checked on higher time frames (H1, H4, daily).
  • Price should preferably be above the 89EMA.
  • Lookout for divergences in QQE or CCI.

Stop Loss for Buy:

  • Set a few pips below the lower white line (lower band of tunnel dragon indicator) or nearest support, or at least 40 pips.
  • More conservatively, set below the last HIGHER LOW (in wave analysis).

Take Profit for Buy:

  • Use Pivot Point Zones (PPZ), resistance levels, or round numbers.
  • Alternatively, use a trailing stop, e.g., 40 pips.

Sell Entry:

  • Reverse the buy rules. Identify a HIGH in the price followed by LOWER HIGHS (LH).
  • Look for a candle closing below the lower white line (lower band of the tunnel dragon indicator).
  • Place a sell stop a few pips below the low of the candle.

Conditions for Sell:

  • QQE below the 50 line and sloping down.
  • CCI below the zero line and sloping down, with the middle line preferably red.
  • A volume drop in the NVO indicator is preferable.
  • The slope of the Tunnel Dragon should be steep (4 to 5 o’clock angle).
  • General trend should be checked on higher time frames (H1, H4, daily).
  • Price should preferably be below the 89EMA.
  • Lookout for divergences in QQE or CCI.

Stop Loss for Sell:

  • Set a few pips above the upper white line (upper band of tunnel dragon indicator) or nearest resistance, or at least 40 pips.
  • More conservatively, set above the last LOWER HIGH (in wave analysis).

Take Profit for Sell:

  • Use Pivot Point Zones (PPZ), support levels, or round numbers.
  • Alternatively, use a trailing stop, e.g., 40 pips.

Re-Entry:

  • Use price action signals (e.g., inverted hammer or bearish engulfing for shorts).
  • The middle line of the CCI changes color (red to blue for long, blue to red for short).
  • Place stop loss above the previous high for short or below the previous low for long entries.

This system emphasizes the importance of wave analysis and following the rules strictly to achieve consistent profits. It also suggests staying cautious and having stop-loss settings in place to manage risks effectively.

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