Turn Up The Volume And HEAT UP YOUR PROFITS!

Nirvana’sVolume Systems 2.0Turn up the Volume andHEAT UP YOUR PROFITS!11% Profit Per Trade!And plenty of Signals! See page 9.INSIDE“Beat the Pros attheir own game!With the Volume Heat Indicator,you can see the Professionalsentering and exiting themarket.and that’s informationyou can profit from.”– Ed Downs, CEO and FounderNirvana Systems, Inc.BONUS STRATEGY: Our BestDivergence Strategy Ever!p. 103 The Key to SEEING the Market6 Detect Change in Trend Early7 Volume Flow Systems8 Improved Moving Averages9 NEW Long Term Power Strategy10 Bonus: New Divergence Strategy11 Volume Systems 2.0 Special Offer

Let Volume Systems 2.0Heat Up Your Profits!Over the years, we have continuedour relentless pursuit of profitabletrading methods. A big part ofthis process has involved listeningto our customers to understandwhich things are working thebest for them. A recent surveyindicated that many of them haveEd Downsbeen profiting handsomely fromCEO and FounderNirvana Systems, Inc.our first Volume Systems plug-in,which we released back in 2002.So, we went back to our originalresearch, intent on improving it.The result is Volume Systems 2.0,a collection of new Indicators andSystems based on Volume Flowanalysis. Volume Flow can actuallydetect professional accumulationand distribution. On page 4, JeremyWilliams explains this importantaspect of market behavior and onpage 5, he shows how you to profit fromit using the new Volume Heat Indicator.Volume analysis tends to generate better and fasterSignals, which can lead to bigger profits. In fact, ourlong term Strategy has averaged over 11% profit pertrade since the beginning of 2009, with a large selectionof trades to prospect from!Then there is our new Volume Flow DivergenceStrategy, which we are including for a limited timeas a FREE bonus with this offer. This remarkableStrategy produces an almost 80% hit rate—tradingLongs AND Shorts, which is incredible for a 100%Mechanical Strategy.Volume Analysisgenerates FasterSignals. Faster Signalsmean Bigger Profits!To capture Volume Flow, we created a new indicatorcalled Volume Heat which helps us visualize the overallmovement of money into and out of a stock. WithVolume Heat, not only can you see the professionalsentering and exiting the market, but also the resultingimbalance between supply and demand as the heatshifts from bullish to bearish and vice versa. This isinformation we can profit from!Starting with the Volume Heat concept, our teamdeveloped the additional Volume Flow Indicatorsdescribed in this mailer, including a VolumeWeighted Moving Average and Volume WeightedMACD. As you will see from the examples, theseindicators provide a clear cut advantage over theirnon-volume counterparts.I am confident this plug-in isgoing to give you a tremendousadvantage in your trading. Andif you use the new Volume-basedIndicators and Systems withother proven techniques availablein OmniTrader or VisualTrader,you’ve got a dynamo waiting tobe unleashed.Once you see this product in action, you’re going to getas excited about it as we are! Remember, volume fuelsthe market. It’s time to let Volume Systems 2.0 heatup your profits! You’re going to love it.Sincerely,Ed DownsCEO and FounderNirvana Systems, Inc.

Volume Flow AnalysisThe Key to SEEING the MarketVolume is the lifeblood of any market. Weknow that it is the imbalance in supply anddemand that makes a market move. Andclosely related to this is the concept ofliquidity—how rapidly a market will absorbour shares when we decide to sell them.A quick look at any chart will tell you thattrading volume is not uniform, but rathercomes in waves or spikes. We know that onlarge volume days, sudden buying or sellinghas entered the market for a reason, anddepending on supply and demand for theshares, price will either continue a priortrend or form a reversal.Volume Flow analysis is the study of pricemovement in the context of these unusualvolume events. In Volume Systems 2.0, webuilt several indicators designed to show ushow much movement potential exists in achart at the point one of these events occurs.Volume Heat, shown on this page anddiscussed in the article on page 5, is afabulous visual tool for quickly SEEINGthe events, because you can’t miss thechange from red to green. Using VolumeHeat as our base technology, we developedour Volume Flow Oscillator, described onpage 6, and additional Volume WeightedIndicators, Systems, and Strategies thatare showing phenomenal performance.The study of Volume Flow can show thetell-tale “signature” of professional traders.On the next page, Jeremy Williams’ articleexplains this phenomenon and expands onthe Volume Heat concept. I am extremelyproud of this research—Volume Systems 2.0is going to give our customers a decidedadvantage in their trading.Bearish VolumeHeat PredictsDecline.Volume Heat in action. By examining past price and volume behavior, theindicator can predict changes in trend, as shown here.Bullish VolumeHeat PredictsRally!Volume Heat makes it easy to see changes in trend. The other Indicators andSystems in Volume Systems 2.0 are based on this.3

An Introduction toVolume Flow Analysisby Jeremy WilliamsTrading Systems Researcher,Nirvana Systems, Inc.AThe Importance ofSupply and DemandThe analysis of volume to predict futuremarket prices has been used for more than100 years, starting with the innovativemethods of Richard Wyckoff in theearly 1900’s. In recent years, advances inthese techniques have been made usingVolume Spread Analysis to decode marketmovements using certain principles regardingsupply and demand.The concept is simple and intuitive. Whendemand exceeds supply, markets will rise.When supply surpasses demand, prices fall.If supply and demand are equal, price willremain the same. By analyzing volume datain addition to the price chart, it becomespossible to not only understand the historicalroles of supply and demand, but also topredict supply and demand conditions forthe near future.The ProfessionalsThe key to predicting future supplyand demand is the behavior of the largeprofessional stock traders, sometimesreferred to as “professional operators”or the “smart money.”These major market players have a hugeeffect on the movement of stocks as theyconsistently “fleece” the less savvy smallertraders. The chart and discussion to the rightexplains the mechanics of how this happens.This “shell game” has been going on sincethe early 1900’s, yet to most small tradersthe process has remained entirely invisible—until now.4BCDDThe phases of market movement.A. AccumulationDuring a down trend professional traders wait forthe herd to panic (usually on a large bad news day) before buying. Whilethe stocks are at the low “wholesale” pricing, the professionals start coveringshorts and buying to accumulate shares to sell at a later time. The panicof the herd ensures there is an ample supply for the operators to purchasewithout moving price upward.B. MarkupWhen the panic subsides, the professionals now hold asignificant percentage of the actively traded shares in the market. Thiscauses prices to steadily rise, not because the professionals are buying, theyalready did that. The price moves up because the professionals own thestock and they are not selling.C. DistributionThe next phase occurs when the operators havedetermined that the price has risen as far as it can. Here they look to sellinto an emotional buying frenzy, usually coming on the back of bullishnews. At this point, the smart money distributes their shares to the herd,who are buying the stock at hyper-inflated (retail) prices.D. MarkdownOnce the herd is again holding a large portion of theactively traded shares, the prices fall. Without the buying power of the prosit is very hard to sustain demand in excess of supply.

Beat the Pros at their own Game!The Missing LinkThe key piece of this puzzle that most tradersmiss is volume. When the professionalsaccumulate or distribute shares, they leave atell-tale “signature” in the form of the volumeand price data.In the chart to the right you can see largevolume spikes around the key reversal points.On these extreme movement days, theprofessionals’ actions are directly reflected inthe volume. For example, on June 23, 2009 arelative low bar was formed on CYT. We seea large volume spike on that day, showing usthat buying AND selling increased to form anaccumulation event.The Volume Heat IndicatorTo capture Volume Flow, we created a newindicator called Volume Heat which helps usvisualize the overall movement of money intoand out of a stock. The indicator is shown inboth of the examples to the right.With Volume Heat, not only can you seethe professionals entering and exiting themarket, but also the resulting imbalancebetween supply and demand as the heatshifts from bullish to bearish and vice versa.This is information we can profit from!In the days following the major accumulationbar in February, Sprint shows a marked shiftin the balance of supply and demand. TheVolume Heat Indicator undergoes a colorshift from red to grey then finally to green.This is due to the major accumulation by thepros removing supply from the market place.Until they sell (at the next distribution pointin the chart) the market will have a solidupside bias.Volume Heat will let you see whether anaccumulation or distribution event has justoccurred, giving you an important piece ofinformation that will improve your odds.Volume Spikes Tip-off Operator BehaviorOn major accumulationdays, you will see alarge daily downsideon extreme volume.Distribution days have alarge daily upside pushwith a spike in volume,as the pros sell theirinventory.Volume Heat Indicator shows spikes as pros accumulate and distribute sharesof CYT.Major accumulation baras evidenced by largevolume spike near lows.Volume Heat turningfrom red to grey togreen as demand nowexceeds supply.Volume Heat shows supply and demand imbalances as money flows into andout of the stock of Sprint (S).5

Detect Change in Trend EarlyThe NEW VolumeFlow OscillatorThe Volume Flow Oscillator, orVFO, is an advanced indicatorbased on the Volume Heat concept.It is formed by averaging bar-tobar price differences and weightingthose differences by volume. Theresulting indicator is sensitiveto changes in volume, giving usan early indication of a potentialchange in trend.The charts to the right illustratehow VFO can be used to give us atrading advantage. In the markedzones, you can see the raw VFO(the blue line) is moving rapidlyaway from the smoothed VFO (thegreen line). When this occurs, anew trend is typically beginning.Small changeBig changeThe Volume Flow Oscillator indicates a potential change in trend when it suddenlymoves a large distance away from its moving average, compared to movement inthe price chart.A good example of this occurredon JPM in April. Note the largemove in VFO, as well as the relativeposition of VFO at the end of themove, compared to price. Theprice chart ended slightly abovethe values from early April (about 45.50), whereas the VFO chartwas easily 3 times lower than whereit was in early April. The marketproceeded to drop over 20%.If you closely examine the chartsin these examples, you can see theincrease in volume, but it would bevery easy to miss if you were notwatching VFO! That’s the value ofthe indicator. VFO was also used tocreate the Dual Volume Flow andVolume Flow Divergence Systemsdescribed on the next page.6Another Volume Flow example showing sudden movement away from the movingaverage, indicating a large amount of volume in the direction of the move, at eachof the shaded zones. These events often occur ahead of strong rallies or declines.