An Overview of V-Coils & NR-Breakouts Page 2. V-Coils : Contraction & Expansion Volatility Thresholds Page 4

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An Overview of V-Coils & NR-Breakouts Page 2 V-Coils : Contraction & Expansion Volatility Thresholds Page 4 - Compression Signals Page 5 - Coil Zone Signals Page 6 - V-Coil Signals Page 7 - Mega

2 An Overview of V-Coils & NR-Breakouts Page 2 V-Coils : Contraction & Expansion Volatility Thresholds Page 4 - Compression Signals Page 5 - Coil Zone Signals Page 6 - V-Coil Signals Page 7 - Mega V-Coil Signals Page 8 - Filtered Volatility Signals Page 9 NR Breakouts Indicator Page 10 - NR-4 through NR-50+ and Inside Bar Setups Page 11 Automated Scanning Capabilities: Scanning for Volatility Signals Page 12 - NinjaTrader Market Analyzer Page 12 - TradeStation RadarScreen Page 15 - MultiCharts Market Scanner Page 17 Expert Advice & Tips Page 19 Straddles & Strangles: Profiting From Volatility Page 20 Extensive Customer Support Page 21 Risk Disclosure Statement Page Fibozachi LLC All Rights Reserved. 1

3 Each of the indicators within the V-Coils & NR Breakouts Indicator Package is specifically designed to highlight noteworthy contractions and expansions in volatility and Average True Range (ATR), which often lead to explosive price action within a relatively short time period. The NR-Breakouts Indicator issues Narrow Range signals if the high-low range of the current bar is smaller than the previous X bars. This usually results in an immediate increase in ATR and volatility over the next 1-3 bars. The V-Coils Indicator issues special volatility signals which often mark the end of a consolidation period, leading to big price moves that allow traders to make larger gains by identifying the earliest stage of breakouts and selloffs Fibozachi LLC All Rights Reserved. 2

The V-Coils Indicator is extremely effective at accurately predicting large expansions in volatility and ATR just before they actually occur, which often leads to large, explosive price moves.

5 The V-Coils Indicator is extremely effective at accurately predicting large expansions in volatility and ATR just before they actually occur, which often leads to large, explosive price moves. The underlying concept behind V-Coils is that when volatility compresses and violates specific thresholds; sharp expansions in volatility and ATR are likely to occur, which often coincide with large, explosive price moves. In order to achieve the desired setup to generate signals, V-Coils require several bars of increasingly compressed volatility. Therefore, in direct contrast to Narrow Range and Inside Day bars, you should anticipate an extensive or prolonged expansion in volatility and ATR when a V-Coil signal plots Fibozachi LLC All Rights Reserved. 4

6 These small White bars alert the user to a significant contraction, or Compression, in volatility. When a Compression signal appears, the user should remain on high alert for the possibility of a V-Coil signal appearing, which would signal a transition from steadily contracting to markedly expanding volatility and ATR. *** While Compression signals often appear just prior to V-Coil signals, the user must understand that this duo is not mutually inclusive, meaning that one signal can appear without the other. We routinely observe instances where Compression bars plot just prior to significant expansions in volatility and ATR without subsequently registering a V-Coil signal Fibozachi LLC All Rights Reserved. 5

These small Yellow bars reflect a transition in short-term volatility from the Compression territory and into the requisite thresholds (the Coil-Zone) that must be breached in order to register a

7 These small Yellow bars reflect a transition in short-term volatility from the Compression territory and into the requisite thresholds (the Coil-Zone) that must be breached in order to register a V-Coil signal. In other words, think of these small Yellow bars as something of a midway or fueling point, frequently occurring between the periods where volatility contracts in the Compression phase and where it begins expanding once again, possibly registering V-Coil signals. Hence, the term Coil Zone represents the transition phase that often precedes the powerful re-expansion of volatility and ATR after a V-Coil signal plots Fibozachi LLC All Rights Reserved. 6

8 These tall Red bars usually trigger after or amidst Coil Zone bars (Yellow) or Compression bars (White). V-Coil signals indicate that a significant expansion in volatility and ATR may immediately occur. *** Though highly unusual, V-Coil signals can occur without any prior Compression or Coil Zone bars Fibozachi LLC All Rights Reserved. 7

9 These tall Magenta bars trigger when multiple V-Coil signals simultaneously register across a short-term, intermediate-term, and long-term timeframe. Mega V-Coil signals are exceedingly rare. When we at Fibozachi perform a scan upon the entire list of individually listed securities, typically only one or two Mega V-Coil signals appear on any given day. Nevertheless, Mega V-Coils are the strongest and most accurate volatility signals possible, signifying the onset of an abrupt expansion in volatility and ATR. The appearance of a Mega V-Coil signal for an option trader is like finding out about a surprise party just a day or two before it happens; they each know in advance both where and when all of the action is going to be! Fibozachi LLC All Rights Reserved. 8

10 These large round dots are only generated when a volatility signal meets an additional layer of criteria and technical guidelines. A Filtered volatility signal is superior to unfiltered signals, since they are more accurate and have a higher rate of follow- through. By requiring that an extensive amount of volatility-based technical criteria has been satisfied, the Filtered signals are truly the Cream of the Crop amongst all volatility-based trading indicators. These signals have an extraordinary track record in predicting drastic increases in volatility and significant price moves, before they actually occur! Fibozachi LLC All Rights Reserved. 9

11 Narrow Range (NR) bars occur when the entire High-Low price range of a bar is smaller than the entire High-Low range of all of the previous N bars before it. An Inside Day (ID) occurs when the entire High-Low price range of a single bar fits within (is engulfed by) the entire High-Low price range of the previous bar. Though termed Inside Day, the concept is equally applicable across all fixed periods, including time, tick and volume methodologies. Combining these two concepts of Narrow Range and Inside Day bars provides valuable warnings in anticipation of significant expansions in short-term volatility and ATR Fibozachi LLC All Rights Reserved. 10

While NR-4 and NR-7 breakouts are often the only two Narrow Range signals discussed throughout the trading community, we went a step further and designed our Narrow Range Indicator to plot

NR-4 tends to be the weakest of all Narrow Range setups while NR-50+ Inside Day bars (NR-50/ID) often presage some of the most powerful price thrusts.

12 While NR-4 and NR-7 breakouts are often the only two Narrow Range signals discussed throughout the trading community, we went a step further and designed our Narrow Range Indicator to plot color-coded NR-4 through NR-50+ setups as both histograms and text signals. We also included Inside Bar signals that plot as a single White Dot atop histogram bars. NR-4 tends to be the weakest of all Narrow Range setups while NR-50+ Inside Day bars (NR-50/ID) often presage some of the most powerful price thrusts. Please note that Narrow Range - Inside Day setups typically provide follow through within their next few immediate bars, so you should not necessarily anticipate an extensive or prolonged expansion in volatility and ATR. As the duration of consecutive NR bars increases, the range of short-term volatility and ATR continually contracts. Although this point may seem obvious, it is important to reiterate. To this end, the most powerful Narrow Range setup is the NR-50/ID (the 50 period Narrow Range - Inside Day); these setups display High- Low trading ranges that are not only smaller than their previous 50+ bars but are also completely engulfed by their prior bar Fibozachi LLC All Rights Reserved. 11

As you can see from the screenshot below, using V-Coils & NR-Breakouts with the TradeStation RadarScreen and NinjaTrader Market Analyzer

13 Both V-Coils & NR-Breakouts also come with a special pre-formatted Market Analyzer Indicator and template for all NinjaTrader users. All of the columns, colors and text are completely customizable so that you can personalize it to your own preferences. As you can see from the screenshot below, using V-Coils & NR-Breakouts with the TradeStation RadarScreen and NinjaTrader Market Analyzer allows you to quickly scan an entire list of symbols for the most important information in just seconds! Fibozachi LLC All Rights Reserved. 12

14 The following is an overview of the various columns: Volatility Signals: This column displays all Volatility Signals, which are colorcoded for quick and easy identification. Filtered Signals: This column displays all Filtered Signals. NR-Signals: This column displays all Narrow Range Signals (NR-4 to NR-50+). Inside Bars: This column displays all Inside Bar Signals Fibozachi LLC All Rights Reserved. 13

15 A special pre-formatted Market Analyzer template is included for all NinjaTrader users, although some traders may still choose to create their own templates. You must adhere to the following values when setting up your own cell conditions: Fibozachi LLC All Rights Reserved. 14

Both V-Coils & NR-Breakouts also come with special pre-formatted RadarScreen Indicators

All of the columns, colors and text are completely customizable so that you can

As you can see from the screenshot below, using V-Coils & NR-Breakouts with the

16 Both V-Coils & NR-Breakouts also come with special pre-formatted RadarScreen Indicators and template for all TradeStation users. All of the columns, colors and text are completely customizable so that you can personalize it to your own preferences. As you can see from the screenshot below, using V-Coils & NR-Breakouts with the TradeStation RadarScreen allows you to quickly scan an entire list of symbols for the most important information in just seconds! Fibozachi LLC All Rights Reserved. 15

17 The following is an overview of the various columns: V-Signals: This column displays all Volatility Signals, which are color-coded for quick and easy identification. Filtered: This column displays all Filtered Signals. NR-Breakouts: This column displays all Narrow Range Signals (NR-4 to NR-50+). Inside Bars: This column displays all Inside Bar Signals Fibozachi LLC All Rights Reserved. 16

As you can see from the screenshot below, using V-Coils & NR-Breakouts with the MultiCharts Market Scanner allows you to quickly

18 Both V-Coils & NR-Breakouts also come with special pre-formatted Market Scanner Indicators and template for all MultiCharts users. All of the columns, colors and text are completely customizable so that you can personalize it to your own preferences. As you can see from the screenshot below, using V-Coils & NR-Breakouts with the MultiCharts Market Scanner allows you to quickly scan an entire list of symbols for the most important information in just seconds! Fibozachi LLC All Rights Reserved. 17

19 The following is an overview of the various columns: V-Signals: This column displays all Volatility Signals, which are color-coded for quick and easy identification. Filtered: This column displays all Filtered Signals. NR-Breakouts: This column displays all Narrow Range Signals (NR-4 to NR-50+). Inside Bars: This column displays all Inside Bar Signals Fibozachi LLC All Rights Reserved. 18

20 We at Fibozachi use the TradeStation Scanner Tool or NinjaTrader Market Analyzer both intra-day and after the close to compile lists of trading vehicles that have registered Compression, Coil Zone, V-Coil or Mega V-Coil signals. We then have these lists ed to us for further review and after isolating our ideal candidates; we prepare our course of action and patiently wait for our entry criteria to be met. You can add any trading vehicle to the list of symbols you want to scan for, preschedule scans and establish notification to have the results ed to you for further review. Repeating this process each day will help you grow more organized and disciplined while also experiencing less stress when trying to determine what to trade Fibozachi LLC All Rights Reserved. 19

21 Two powerful strategies for options traders that do not concern themselves with the direction of price are the long straddle and the long strangle. These bilateral strategies are not concerned with directionality, but rather the rapid expansion of volatility and ATR that results from a relatively large dislocation (1.5% or greater gap) and outsized short-term trend in price. Traders can profit from straddles and strangles if volatility picks up and price moves enough in EITHER direction. The goal is to determine when a large price move is about to occur, not whether price will move up or down. Therefore, the V-Coils and NR-Breakouts indicators are ideal for options traders who can profit by predicting when volatility is most likely to re-expand or increase. As always, the goal of trading is not to be omniscient but rather to achieve consistent profitability. Any valid strategy or legitimate methodology can be of value if it helps a trader reduce his discretionary input. Furthermore, any valid strategy or legitimate methodology can be extremely constructive if it helps a trader further develop his own personalized trading plan. We at Fibozachi firmly believe that our V-Coils & NR Breakouts: Volatility Compression Package provides not only some of the most accurate and robust volatility indicators on the market today, but also a much needed volatility component to complement any personalized trading plan that seeks to minimize discretion and risk Fibozachi LLC All Rights Reserved. 20

We take great pride in our customer support and are happy to

22 Have a question about the V-Coils and NR-Breakouts Indicator Package? Contact us at support@fibozachi.com. We take great pride in our customer support and are happy to help our fellow traders! Fibozachi LLC All Rights Reserved. 21

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