Money Zone 2.

0
User Guide

Money Zone 2.0 User Guide

January 2011 Edition

PF-26-01-02
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Important Information

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Under the copyright laws, this publication may not be reproduced or transmitted in any form,
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DISCLAIMER REGARDING USE OF NIRVANA SYSTEMS PRODUCTS

Trading stocks, mutual funds, futures, and options involves high risk including possible loss of
principal and other losses. Neither the software nor any demonstration of its operation should be
construed as a recommendation or an offer to buy or sell securities or security derivative products
of any kind.

Neither Nirvana’s OmniTrader™, VisualTrader™, Nirvana Systems, Inc., nor its employees and
affiliates recommends any specific security for purchase or sale, nor do they recommend any
specific approach to investing in securities. Nirvana Systems, Inc. is not an investment advisory
service nor a registered investment advisor or broker/dealer.

No representation is being made that the methods presented will guarantee profits in trading. Past
performance, whether actual or indicated by historical systems testing, is no guarantee of future
performance or success. Information presented by Nirvana Systems, Inc. is from sources Nirvana
believes are reliable. However, Nirvana has not independently verified such information.
Conventions

The following conventions are used in this manual:

» The » symbol leads you through nested menu items and dialog box options
to a final action. The sequence File»Page Setup»Options directs you to
pull down the File menu, select the Page Setup item, and select Options
from the last dialog box.

This icon denotes a tip, which alerts you to advisory information.

This icon denotes a note, which alerts you to important information.

bold Bold text denotes items that you must select or click in the software, such
as menu items and dialog box options.

italic Italic text denotes variables, emphasis, a cross reference, or an introduction

to a key concept. This font also denotes text that is a placeholder for a word
or value that you must supply.
Contents
Chapter 1
Introduction
Installing the Money Zone .............................................................................................1-1
Registering the Money Zone 2.0 Module ......................................................................1-2
The Money Zone 2.0 Module Components ...................................................................1-2
Indicators: ........................................................................................................1-2
Systems:...........................................................................................................1-3
Strategies: ........................................................................................................1-3
Trade Plans: .....................................................................................................1-3
The Money Zone Master View........................................................................1-3
The Money Zone Boundaries ..........................................................................1-3
The Money Zone Lookback ............................................................................1-3

Chapter 2
Finding the Money Zone
How We Find the Money Zone .....................................................................................2-4

Chapter 3
Money Zone 2.0 Indicators
The Money Zone Boundaries ........................................................................................3-6
The Money Zone Lookback...........................................................................................3-6
Volume at Price (VAP)..................................................................................................3-7
Use...................................................................................................................3-7
Parameters .......................................................................................................3-8
Developing Volume at Price (DVAP) ...........................................................................3-9
Parameters .......................................................................................................3-10
Money Zone (MZ) .........................................................................................................3-10
Use...................................................................................................................3-11
Parameters .......................................................................................................3-11
Developing Money Zone (DMZ)...................................................................................3-13
Use...................................................................................................................3-13
Parameters .......................................................................................................3-14
Value Line (VL).............................................................................................................3-15
Use...................................................................................................................3-15
Parameters .......................................................................................................3-16
Developing Value Line (DVL) ......................................................................................3-17
Use...................................................................................................................3-18
Parameters .......................................................................................................3-18

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Chapter 4
Money Zone 2.0 Systems
The Money Zone Boundaries ........................................................................................ 4-19
The Money Zone Lookback .......................................................................................... 4-19
The Money Zone 2 Breakout System............................................................................ 4-20
Parameters ....................................................................................................... 4-20
The Money Zone 2 Bounce System .............................................................................. 4-23
Parameters ....................................................................................................... 4-23
The Money Zone 2 Reversal System............................................................................. 4-26
Parameters ....................................................................................................... 4-26
The Money Zone Breakout System............................................................................... 4-29
Parameters ....................................................................................................... 4-29
The Money Zone Reversal System................................................................................ 4-32
Parameters ....................................................................................................... 4-32

Chapter 5
The Money Zone Trading Strategies
The Money Zone 2 Reversal Strategy ........................................................................... 5-36
The Money Zone 2 Breakout Strategy .......................................................................... 5-37
Money Zone 2 Bounce Strategy .................................................................................... 5-38
Money Zone 2 EOD Strategy ........................................................................................ 5-39

Chapter 6
Money Zone 2 Trade Plans and Stops
MZ2 Reversal Trade Plan.............................................................................................. 6-40
MZ2 Breakout Trade Plan ............................................................................................. 6-41
MZ2 Bounce Trade Plan ............................................................................................... 6-42
Money Zone 2 EOD Trade Plan.................................................................................... 6-43
Money Zone 2 Stops...................................................................................................... 6-44
MZ2 Fixed Loss Stop 1................................................................................... 6-44
Parameters ........................................................................................ 6-45
MZ2 Fixed Loss Stop 2................................................................................... 6-47
Parameters ........................................................................................ 6-47
MZ2 Fixed Profit Stop .................................................................................... 6-49
Parameters ........................................................................................ 6-49

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Chapter 7
Money Zone Master View
The Money Zone Master View Settings ........................................................................7-53
Settings ............................................................................................................7-54
Additional Resources

© National Instruments Corporation vii TitleShort-Hidden (cross reference text)

Introduction
1
Congratulations on your purchase of the Money Zone 2.0 Module. This module is the
result of extensive research by Nirvana Systems development department. Money
Zone looks to find established value in the markets. Once a value "zone" has been
identified, we can then use this information to make trading decisions.
The Money Zone looks at the relationship of price to time in order to see what price
levels the majority of trades occur. This method of analysis is similar to what is
known as Market Profile. In the eighties, J. Peter Steidlmayer developed Market
Profile in conjunction with the Chicago Board of Trade in order to evaluate the
relationship between price and value. The Money Zone Module uses a comparable
approach, but Nirvana Systems has taken this type of analysis and created a unique
way to interpret the information.

Installing the Money Zone

Before you can begin using the Money Zone 2.0 Module, confirm that you have the
latest version of OmniTrader or VisualTrader installed. Then, follow these
instructions to install the Money Zone 2.0 Module:
1. Insert the Money Zone 2.0 CD into the CD-ROM drive. The installation should
begin automatically. If it does not, click Start»Run from the Windows Start
menu.
Type x:\setup.exe (where x is the CD-ROM drive you are using) in the command
line box and click OK.
2. Follow the instructions that appear in the installation wizard dialog boxes.

© Nirvana Systems Inc. 1 Money Zone 2.0 User Guide

 Chapter 1 Introduction

Registering the Money Zone 2.0 Module

Before you can use the Money Zone 2.0 Module, you must register it.
1. Click Help»Registration.
2. Enter the Money Zone 2 Module CD key provided on your invoice or click Get
My CD Keys and your registration file will be updated automatically with your
new Money Zone Module key.

The Money Zone 2.0 Module Components

The Money Zone contains the following components:

Indicators:
• Volume at Price
• Developing Volume at Price
• Money Zone
• Developing Money Zone
• Value Line
• Developing Value Line

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Chapter 1 Introduction

Systems:
• Money Zone Breakout System
• Money Zone Reversal System
• Money Zone 2 Breakout Systems
• Money Zone 2 Bounce System
• Money Zone 2 Reversal System

Strategies:
• Money Zone 2 Bounce RT
• Money Zone 2 Breakout RT
• Money Zone 2 Reversal RT
• Money Zone 2 EOD

Trade Plans:
• Money Zone 2 Bounce
• Money Zone 2 Breakout
• Money Zone 2 Reversal
• MZ2 EOD

Stops
• MZ Fixed Loss Stop 1
• MZ Fixed Loss Stop 2
• MZ Fixed Profit Stop

The Money Zone Master View

The Money Zone Boundaries

The Money Zone Lookback

Money Zone 2.0 User Guide 3 nirvanasystems.com

Finding the Money Zone
2
How We Find the Money Zone
The Money Zone represents a price area where the majority of trades occur. This area
is derived at by looking at all of the prices at which a market transacted for a given
time period, and then calculating where 70% of the trades occurred relative to the
price with the highest number of trades. Confused yet? Let's look at an example so
that you can get a good feel of what you are actually looking at when using the Money
Zone.

Figure 2-1. Developing Money Zone and Value Line for Caterpillar in Oct. 2009

© Nirvana Systems Inc. 4 Money Zone 2.0 User Guide

Chapter 2 Finding the Money Zone

For our example, let's look at how the Money Zone would be built for Caterpillar Inc.
in the first few weeks of October 2009. The Money Zone is looking at the price
distribution for each bar of data, and then finding the price where the security is most
commonly traded. This is known as the Value Line. In this example, the white line on
the chart represents the Value Line. You can see how it adjusts as new data is being
added to the calculation based on the most commonly traded price.

Once we have the Value Line for each bar, we then look for the zone around the Value
Line where 70% of the trades occur. This is not merely equidistant bands around the
Value Line. The module actually uses a step by step process of looking at the prices
around the Value Line to find where 70% of the trades occur. This zone is known as
the Money Zone, and it represents a value range. Once we this valuable information,
we know the range at where the where the market perceives value. We can then use
this information to trade breakouts from the range (as shown in this example) or we
can trade reversals as price moves within the Money Zone.

Money Zone 2.0 User Guide 5 nirvanasystems.com

Money Zone 2.0 Indicators
3
The Money Zone 2.0 Module includes six indicators. Each Money Zone indicator
uses a boundary and a lookback period in its calculations.

The Money Zone Boundaries

The Money Zone Systems and Indicators use boundaries to start and end their
calculations. For periodicities defined in minutes, the MZ boundary by default, is
defined as the daily trading session. For periodicities defined in days or weeks, the
default boundary is defined in months. For example, if we are looking at a 5 minute
chart, the default boundary is daily trading sessions. This means that the calculations
begin at the start of session and ends when the session ends. If we are looking at daily
charts, the boundaries are defined in months.

The Money Zone Lookback

The systems and indicators in the Money Zone module all have a Lookback
parameter. Regardless of what periodicity you are in, the Lookback parameter is
always calculated using days. So for daily and weekly charts if you want an indicator
to look back to the previous month, you will want to use a Lookback setting of 20
days. In real time, if you want the indicator to refer to previous day, you would use a
Lookback setting of one. While this may seem like an elementary point, it is
important to remember when applying an indicator or system so you are getting the
desired calculation.

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Chapter 3 Money Zone 2.0 Indicators

Volume at Price (VAP)

Volume at Price (VAP) provides us with a way to see at what prices the highest
amount of volume has occurred. For each bar in a specified time frame, volume is
evenly distributed across price increments and displayed as a histogram on the left
side of the boundary.

The completed calculations are reflected on the next day's chart in real time charts or
the next months chart in daily and weekly charts. The price at which the highest
volume occurred is plotted as well.

Figure 3-1. The Previous Days VAP High Serves as Support for IBM

Use
The VAP indicator is commonly used to find price zones where high volume exists.
These zones are believed to be tips to institutional buying or selling, and they help
identify true support and resistance. While VAP is included in the Money Zone and

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 Chapter 3 Money Zone 2.0 Indicators

compliments the Money Zone components well, it has considerable value in and of
itself.

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit— The unit that will be used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc..)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—Automatically applies the common setting for the timeframe that’s
in use. For Daily timeframes the Default Boundary setting is Monthly. For
Intraday timeframes the Default Boundary is Daily.
– Daily—Boundary will use the data from the opening bar to the closing bar of
the previous day.
– Weekly—Boundary will use the data from the open of the previous week to
the close (Monday through Friday) of the previous week.

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 – Monthly—Boundary will use the data from the first trading day of a calendar
month to the last trading day of that month.
– Quarterly—Boundary will use the first trading day of each quarter to the last
trading day of each quarter.
• Levels to Plot—The number of levels to show on the right edge of the chart. A
level is the value of the indicator for a certain session (for minute periodicities) or
for a month (for daily and higher).

Developing Volume at Price (DVAP)

This is the same as Volume at Price, but it is the developing calculation for the current
session (or month for EOD). As the indicator is being built with new data, the High
Volume Line will adjust accordingly as shown in the illustration below.

Figure 3-2. The DVAP Indicator continually adjusts as new data is added to the current calculation.
 Chapter 3 Money Zone 2.0 Indicators

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit— The unit that will be used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc..)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.

Money Zone (MZ)

The Money Zone is the price range where 70% of the trades occur relative to the Value
Line. It is rendered as two lines (Money Zone Upper Level and Money Zone Lower
Level). The completed calculations are reflected on the next day's, week’s or month’s
chart according to the boundary setting.

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Chapter 3 Money Zone 2.0 Indicators

Figure 3-3. ON OCT. 16TH, The previous days Money Zone calculation provides intraday resistance for
Baxter International

Use
The Money Zone can be used as support and resistance, as it represents the range of
perceived value for a security. If the security moves outside of the value area, the
value perception has changed and a continuation move should follow.

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)

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 Chapter 3 Money Zone 2.0 Indicators

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—Automatically applies the common setting for the timeframe that’s
in use. For Daily timeframes the Default Boundary setting is Monthly. For
Intraday timeframes the Default Boundary is Daily.
– Daily—Boundary will use the data from the opening bar to the closing bar of
the previous day.
– Weekly—Boundary will use the data from the open of the previous week to
the close (Monday through Friday) of the previous week.
– Monthly—Boundary will use the data from the first trading day of a calendar
month to the last trading day of that month.
– Quarterly—Boundary will use the first trading day of each quarter to the last
trading day of each quarter.
• Levels to Plot—The number of levels to show on the right edge of the chart. A
level is the value of the indicator for a certain session (for minute periodicities) or
for a month (for daily and higher).

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Chapter 3 Money Zone 2.0 Indicators

Developing Money Zone (DMZ)

The Developing Money Zone is the developing calculation of the Money Zone which
includes the current session (or month in daily charts). As the indicator is being built
with new data, the Money Zone will adjust accordingly as shown in the illustration
below.

Figure 3-4. The Developing Money Zone plotted on the chart for Norfolk Southern

Use
It is the same concept as the Money Zone indicator - but many consider it more timely
since it reflects the current trading activity.

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 Chapter 3 Money Zone 2.0 Indicators

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks.)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.

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Chapter 3 Money Zone 2.0 Indicators

Value Line (VL)

The Value Line is the price level where the most transactions occurred for a given
period. This line is also used as the anchor for the Money Zone calculation. The
completed calculations are reflected on the next day's, week’s or month’s chart
according to the boundary setting.

Figure 3-5. The Value line from the previous session providing intraday support for American Electric
power.

Use
The Value Line can be used in a similar manner to the Money Zone Levels - it can act
as support or resistance. Many also use it as a profit target.

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 Chapter 3 Money Zone 2.0 Indicators

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—Austomatically applies the common setting for the timeframe that’s
in use. For Daily timeframes the Default Boundary setting is Monthly. For
Intraday timeframes the Default Boundary is Daily.
– Daily—Boundary will use the data from the opening bar to the closing bar of
the previous day.
– Weekly—Boundary will use the data from the open of the previous week to
the close (Monday through Friday) of the previous week.
– Monthly—Boundary will use the data from the first trading day of a calendar
month to the last trading day of that month.

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Chapter 3 Money Zone 2.0 Indicators

– Quarterly—Boundary will use the first trading day of each quarter to the last
trading day of each quarter.
• Levels to Plot—The number of levels to show on the right edge of the chart. A
level is the value of the indicator for a certain session (for minute periodicities) or
for a month (for daily and higher).

Developing Value Line (DVL)

The Developing Value Line is the developing calculation of the Value Line which
includes the current session. As the indicator is being built with new data, the Money
Zone will adjust accordingly as shown in the illustration below.

Figure 3-6. The Developing Value Line plotting on a chart for Allstate. This example shows how the current
session data dynamically builds out the indicator calculation.

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 Chapter 3 Money Zone 2.0 Indicators

Use
The Developing Value Line is used in a similar manner to the Value Line. Realize that
early in the session the line will follow price closely since we are only using the
current session's (month's) data.

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.

© Nirvana Systems Inc. 18 Money Zone 2.0 User Guide

Money Zone 2.0 Systems
4
The Money Zone 2 Module includes three different trading systems each designed to
find a particular type of trading opportunity. Each system uses the same set of
parameters which are uniquely defined for a specific type of signal.

The Money Zone Boundaries

The Money Zone Systems and Indicators use boundaries to start and end their
calculations. For periodicities defined in minutes, by default, the MZ boundary is
defined as the daily trading session. For periodicities defined in days or weeks, the
default boundary is defined in months. For example, if we are looking at a 5 minute
chart, the default boundary is daily trading sessions. This means that the calculations
begin at the start of session and ends when the session ends. If we are looking at daily
charts, the default boundaries are defined in months. The boundaries for each system
and indicator are fully configurable in Money Zone 2.0.

The Money Zone Lookback

The systems and indicators in the Money Zone module all have a Lookback
parameter. Regardless of what periodicity you are in, the Lookback parameter is
always calculated using days. So for daily and weekly charts if you want an indicator
to look back to the previous month, you will want to use a Lookback setting of twenty
days. In real time, if you want the indicator to refer to previous day, you would use a
Lookback setting of one. While this may seem like an elementary point, it is
important to remember when applying an indicator or system so you are getting the
desired calculation.

© Nirvana Systems Inc. 19 Money Zone 2.0 User Guide

 Chapter 4 Money Zone 2.0 Systems

The Money Zone 2 Breakout System

The Money Zone 2 Breakout System will fire signals based on a confirmed breakout
from the Money Zone.
.

Figure 4-1. Signal From the Money Zone 2 Breakout System

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)

© Nirvana Systems Inc. 20 Money Zone 2.0 User Guide

Chapter 4 Money Zone 2.0 Systems

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.
• Anchor Size—Specifies the number of ATR’s above or below the MZ level
relative to direction.
• Anchor Lookback—The minimal distance in ATR’s that price must be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period, relative to the point that the system becomes armed. For long signals, it is
measuring the distance from the highest high value to the MZ Lower Level. For
short signals, it is measuring the distance from the lowest low value to the MZ
Upper Level.

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 Chapter 4 Money Zone 2.0 Systems

• Arm Level—The distance in ATR’s from a Money Zone Level that price must
penetrate to activate the system. For a long signal to fire, price must penetrate the
Arm Level relative to the MZ Lower Level. For a short signal, price must
penetrate the Arm Level relative to the MZ Upper Level.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• Trigger Distance—The minimum distance in ATR’s from close price and a
Money Zone Level required for a signal to fire. For long signals, the distance is
above the MZ Lower Level. For short signals, the distance is below the MZ Upper
Level.
• Trigger Time—The number of bars from the point that the system is armed that
a signal will be allowed.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.

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Chapter 4 Money Zone 2.0 Systems

The Money Zone 2 Bounce System

The MZ2 Bounce System will fire a signal when a Money Zone level has been broken
and price pulls back in the range of the level. As long as price stays above the cushion,
a signal will then be fired.

Figure 4-2. Signal Fired from the MZ 2 Bounce System

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)

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 Chapter 4 Money Zone 2.0 Systems

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.
• Anchor Size—Specifies the number of ATR’s above or below the MZ level
relative to direction.
• Anchor Lookback—The minimal distance in ATR’s that price must be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period, relative to the point that the system becomes armed. For long signals, it is
measuring the distance from the highest high value to the MZ Lower Level. For
short signals, it is measuring the distance from the lowest low value to the MZ
Upper Level.

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Chapter 4 Money Zone 2.0 Systems

• Arm Level—The distance in ATR’s from a Money Zone Level that price must
penetrate to activate the system. For a long signal to fire, price must penetrate the
Arm Level relative to the MZ Lower Level. For a short signal, price must
penetrate the Arm Level relative to the MZ Upper Level.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• Trigger Distance—The minimum distance in ATR’s from close price and a
Money Zone Level required for a signal to fire. For long signals, the distance is
above the MZ Lower Level. For short signals, the distance is below the MZ Upper
Level.
• Trigger Time—The number of bars from the point that the system is armed that
a signal will be allowed.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.

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 Chapter 4 Money Zone 2.0 Systems

The Money Zone 2 Reversal System

The Money Zone 2 Reversal System will fire a signal when price has made a defined
move inside the Value Area, tests a Money Zone level and moves away from that
level.

Figure 4-3. Signal from the Money Zone Reversal System

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)

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Chapter 4 Money Zone 2.0 Systems

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.
• Anchor Size—Specifies the number of ATR’s above or below the MZ level
relative to direction.
• Anchor Lookback—The minimal distance in ATR’s that price must be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period, relative to the point that the system becomes armed. For long signals, it is
measuring the distance from the highest high value to the MZ Lower Level. For
short signals, it is measuring the distance from the lowest low value to the MZ
Upper Level.

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 Chapter 4 Money Zone 2.0 Systems

• Arm Level—The distance in ATR’s from a Money Zone Level that price must
penetrate to activate the system. For a long signal to fire, price must penetrate the
Arm Level relative to the MZ Lower Level. For a short signal, price must
penetrate the Arm Level relative to the MZ Upper Level.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• Trigger Distance—The minimum distance in ATR’s from close price and a
Money Zone Level required for a signal to fire. For long signals, the distance is
above the MZ Lower Level. For short signals, the distance is below the MZ Upper
Level.
• Trigger Time—The number of bars from the point that the system is armed that
a signal will be allowed.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.

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Chapter 4 Money Zone 2.0 Systems

The Money Zone Breakout System

The Money Zone Breakout System will fire signals based on a move outside of either
the developing Money Zone or the previous session's (or month's) Money Zone.

For a signal to fire, the current bar must close outside of the Money Zone, while the
previous bars low (or high for shorts) must be within the Money Zone.
.

Figure 4-4. Signals From the Money Zone Breakout System

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are

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 Chapter 4 Money Zone 2.0 Systems

looking at futures charts or if you look at various types of securities (futures,

forex, stocks, etc.)
– Points per Increment—Increments will be measured in price values (.01=1
cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.
• Anchor Size—Specifies the number of ATR’s above or below the MZ level
relative to direction.
• Anchor Lookback—The minimal distance in ATR’s that price must be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period, relative to the point that the system becomes armed. For long signals, it is
measuring the distance from the highest high value to the MZ Lower Level. For

© Nirvana Systems Inc. 30 Money Zone 2.0 User Guide

Chapter 4 Money Zone 2.0 Systems

short signals, it is measuring the distance from the lowest low value to the MZ
Upper Level.
• Arm Level—The distance in ATR’s from a Money Zone Level that price must
penetrate to activate the system. For a long signal to fire, price must penetrate the
Arm Level relative to the MZ Lower Level. For a short signal, price must
penetrate the Arm Level relative to the MZ Upper Level.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• Trigger Distance—The minimum distance in ATR’s from close price and a
Money Zone Level required for a signal to fire. For long signals, the distance is
above the MZ Lower Level. For short signals, the distance is below the MZ Upper
Level.
• Trigger Time—The number of bars from the point that the system is armed that
a signal will be allowed.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.

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 Chapter 4 Money Zone 2.0 Systems

The Money Zone Reversal System

The Money Zone Reversal System will fire a signal if the close of the current bar is
inside of the Money Zone, and the close of the previous bar is outside of the Money
Zone.

Figure 4-5. Signal from the Money Zone Reversal System

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc..)

© Nirvana Systems Inc. 32 Money Zone 2.0 User Guide

Chapter 4 Money Zone 2.0 Systems

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.
• Anchor Size—Specifies the number of ATR’s above or below the MZ level
relative to direction.
• Anchor Lookback—The minimal distance in ATR’s that price must be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period, relative to the point that the system becomes armed. For long signals, it is
measuring the distance from the highest high value to the MZ Lower Level. For
short signals, it is measuring the distance from the lowest low value to the MZ
Upper Level.

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 Chapter 4 Money Zone 2.0 Systems

• Arm Level—The distance in ATR’s from a Money Zone Level that price must
penetrate to activate the system. For a long signal to fire, price must penetrate the
Arm Level relative to the MZ Lower Level. For a short signal, price must
penetrate the Arm Level relative to the MZ Upper Level.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• Trigger Distance—The minimum distance in ATR’s from close price and a
Money Zone Level required for a signal to fire. For long signals, the distance is
above the MZ Lower Level. For short signals, the distance is below the MZ Upper
Level.
• Trigger Time—The number of bars from the point that the system is armed that
a signal will be allowed.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.

© Nirvana Systems Inc. 34 Money Zone 2.0 User Guide

The Money Zone Trading
5
Strategies

The Money Zone Module includes four Trading Strategies designed to find specific
types of trading opportunities in both real time and end of day. All of these strategies
provide excellent signals, allowing for excellent prospecting opportunities. Each
Strategy has it’s own Trade Plan for trade management.

The MZ2 Real Time Strategies are designed to use a five minute data period but can
be applied to any intraday timeframe.

The MZ2 Reversal Strategy is configured to begin trading fifteen minutes into the
trading day and stop firing signals two hours prior to the session close.
.

Figure 5-1. Money Zone 2 Signal Examples

© Nirvana Systems Inc. 35 Money Zone 2.0 User Guide

 Chapter 5 The Money Zone Trading Strategies

The Money Zone 2 Reversal Strategy

The Money Zone 2 Reversal RT Strategy is designed to trade a reversal reaction off
of a Money Zone level targeting a move to the opposite level.

Figure 5-2. Reversal Signals on MMM

The systems block uses the Money Zone 2 Reversal System which is configured to
fire a signal when price has made a defined move inside the Value area, tests a Money
Zone level and then moves away from the level.

© Nirvana Systems Inc. 36 Money Zone 2.0 User Guide

Chapter 5 The Money Zone Trading Strategies

The Money Zone 2 Breakout Strategy

The Money Zone 2 Breakout Strategy looks for a strong move through one of the
Money Zone levels.

Figure 5-3. A breakout opportunity on Apple as price breaks through the Money Zone

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 Chapter 5 The Money Zone Trading Strategies

Money Zone 2 Bounce Strategy

The MZ2 Bounce Strategy looks for a bounce off a money Zone level when price is
outside of the money Zone.

Figure 5-4. MZ2 Bounce Signals on the Five Minute Chart of Nike

© Nirvana Systems Inc. 38 Money Zone 2.0 User Guide

Chapter 5 The Money Zone Trading Strategies

Money Zone 2 EOD Strategy

The Money Zone 2 EOD Strategy uses the MZ2 Breakout and Bounce Systems for
signal generation. It uses the previous months data to find the Money Zone levels.

This Strategy applies three filters for signals to pass through in order to vote. They are
the 120 period SMA, a Volatility Filter and Price to Level filter.

Figure 5-5. MZ2 EOD Signals on Proctor & Gamble

Money Zone 2.0 User Guide 39 nirvanasystems.com

Money Zone 2 Trade Plans and
6
Stops

The Money Zone Module includes four Trade Plans and three stops to be used by the
Trade Plans.Each MZ2 Strategy includes a specially designed Trade Plan in place of
the orders block that is used to manage the trade after a signal is fired.

MZ2 Reversal Trade Plan

The MZ2 Reversal Trade Plan is created for use in the MZ2 Reversal Strategy. The
goal of the MZ2 Reversal Strategy is to trade a reversal from one Money Zone level
to the other. In the event that the target is not reached, this Trade Plan uses three other
stops, two to protect capital and one that attempts to capture profit if the trade moves
in the right direction but does not make the target.

The following stops are specifically configured for and used in the MZ2 Reversal
Trade Plan:
• Protective Stop—MZ Fixed Loss Stop 1
• Breakeven Stop—Breakeven Stop
• Trailing Profit—Trailing Profit Stop
• Target—MZ Fixed Profit Stop
• Time Limit—Trade Session Boundary Stop

© Nirvana Systems Inc. 40 Money Zone 2.0 User Guide

Chapter 6 Money Zone 2 Trade Plans and Stops

Figure 6-1. MZ2 Reversal Signal with MZ2 Reversal Stops Plotted

MZ2 Breakout Trade Plan

The MZ2 Breakout Trade Plan is designed to be used by the MZ2 Breakout Strategy.
Once a signal is fired on the Breakout of a Money Zone Level the MZ2 Breakout
Trade plan applies three stops. The protective stop references the broken MZ level. A
breakeven and trailing profit stop are used to maximize profit.

The following stops are specifically configured for and used in the MZ2 Breakout
Trade Plan:
• Protective Stop—MZ Fixed Loss Stop 2
• Breakeven Stop—Breakeven Stop
• Trailing Profit—Trailing Profit Stop
• Target—None
• Time Limit—Trade Session Boundary Stop

Money Zone 2.0 User Guide

 Chapter 6 Money Zone 2 Trade Plans and Stops

Figure 6-2. MZ2 Breakout Signal with MZ2 Breakout Stops Plotted

MZ2 Bounce Trade Plan

The MZ2 Bounce Trade Plan is designed to be used by the MZ2 Bounce Strategy.
Once a signal is fired on the bounce of a previously broken money Zone Level the
MZ2 Bounce Trade plan applies three stops. The protective stop references the
broken MZ level. A breakeven and trailing profit stop are used to maximize profit.

The following stops are specifically configured for and used in the MZ2 Bounce
Trade Plan:
• Protective Stop—MZ Fixed Loss Stop 2
• Breakeven Stop—Breakeven Stop
• Trailing Profit—Trailing Profit Stop
• Target—None
• Time Limit—Trade Session Boundary Stop

© Nirvana Systems Inc. 42 Money Zone 2.0 User Guide

Chapter 6 Money Zone 2 Trade Plans and Stops

Figure 6-3. MZ2 Bounce Signal with MZ2 Stops Plotted

Money Zone 2 EOD Trade Plan

The Money Zone 2 EOD Trade Plan is designed to be used by the MZ2 EOD Trading
Strategy. This Trade Plan uses three stops to manage a trade once a signal has been
fired from the strategy.

The following stops are specifically configured for and used in the MZ2 EOD Trade
Plan:
• Protective Stop—Fixed Loss Stop
• Breakeven Stop—Breakeven
• Trailing Profit—Trailing Profit Stop
• Target—None
• Time Limit—None

Money Zone 2.0 User Guide

 Chapter 6 Money Zone 2 Trade Plans and Stops

Figure 6-4. MZ2 EOD Signal with MZ2 EOD Stops Plotted

Money Zone 2 Stops

The Money Zone 2 Module has three Stops created for use with Money Zone
Strategies.

MZ2 Fixed Loss Stop 1

The MZ2 Fixed loss Stop 1 places a stop (N) number of ATR’s below the MZ Lower
Lever for longs and above the MZ upper level for shorts. This allows the strategy to
use the MZ level that was reacted to as support or resistance.

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Chapter 6 Money Zone 2 Trade Plans and Stops

Figure 6-5. Reversal Signal with FLS1 Stop Plotted

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—(0)Increments will be measured based on the tick size
of each security. This setting with a size of 1 is the best setting to use if you
are looking at futures charts or if you look at various types of securities
(futures, forex, stocks, etc.)
– Points per Increment—(1)Increments will be measured in price values
(.01=1 cent, .25=25 cents, etc.)
– Increments—(2)The number of increments are specified, and the
calculations will be distributed evenly across the defined size. For example,
100 increments will distribute the data across 100 different lines for display
purposes.

Money Zone 2.0 User Guide

 Chapter 6 Money Zone 2 Trade Plans and Stops

• Lookback EOD (Days)—The number of days previous to the monthly boundary

that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.

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Chapter 6 Money Zone 2 Trade Plans and Stops

MZ2 Fixed Loss Stop 2

The MZ2 Fixed Loss Stop places a stop (N) number of ATR’s above the Upper Money
Zone Level for longs and above the MZ Lower level for shorts. This enables the MZ
level to act as support or resistance.

Figure 6-6. Breakout Signal with FLS2 Stop Plotted

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—(0)Increments will be measured based on the tick size
of each security. This setting with a size of 1 is the best setting to use if you
are looking at futures charts or if you look at various types of securities
(futures, forex, stocks, etc.)

Money Zone 2.0 User Guide

 Chapter 6 Money Zone 2 Trade Plans and Stops

– Points per Increment—(1)Increments will be measured in price values

(.01=1 cent, .25=25 cents, etc.)
– Increments—(2)The number of increments are specified, and the
calculations will be distributed evenly across the defined size. For example,
100 increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.
– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.

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Chapter 6 Money Zone 2 Trade Plans and Stops

– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.

MZ2 Fixed Profit Stop

The MZ2 Fixed Profit Stop is used to target the opposite MZ level and capture profit.
It places a stop (N) number of ATR’s below the Upper Money Zone Level for long
trades or above the MZ Lower level for short trades.

Figure 6-7. Reversal Trade with MZ2 Fixed Profit Stop Plotted

Parameters
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—(0)Increments will be measured based on the tick size
of each security. This setting with a size of 1 is the best setting to use if you

Money Zone 2.0 User Guide

 Chapter 6 Money Zone 2 Trade Plans and Stops

are looking at futures charts or if you look at various types of securities

(futures, forex, stocks, etc.)
– Points per Increment—(1)Increments will be measured in price values
(.01=1 cent, .25=25 cents, etc.)
– Increments—(2)The number of increments are specified, and the
calculations will be distributed evenly across the defined size. For example,
100 increments will distribute the data across 100 different lines for display
purposes.
• Lookback EOD (Days)—The number of days previous to the monthly boundary
that will be used for the calculation. This applies to all daily, weekly and monthly
periodicities. For example, in a daily chart we use monthly boundaries. So if we
wanted to see the calculation reflect the previous month, we would use a
Lookback of 20 days.
• Lookback RT (Days)—The number of days previous to the daily boundary that
will be used for the calculation. This applies to all periodicities defined in
minutes.
• Cushion—The maximum distance in ATR’s that price is allowed to be from a
Money Zone Level for a signal to fire. This distance is measured in the Lookback
Period which is relative to the point that the system becomes armed. Once the
system is armed, the Cushion is also measured until either a signal is fired or the
Trigger Distance has expired. If the Cushion is penetrated at any time while the
system is armed, a signal will not be generated. For long signals, the Cushion is
below the MZ Lower Level. For short signals, the Cushion is above the MZ Upper
Level.
• ATR Periods—Number of bars to use for ATR (Average True Range)
calculation.
• Boundary—Defines the start and end time for calculations.
– Default—(0)Automatically applies the common setting for the timeframe
that’s in use. For Daily timeframes the Default Boundary setting is Monthly.
For Intraday timeframes the Default Boundary is Daily.
– Daily—(0)Boundary will use the data from the opening bar to the closing bar
of the previous day.
– Weekly—(1)Boundary will use the data from the open of the previous week
to the close (Monday through Friday) of the previous week.

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Chapter 6 Money Zone 2 Trade Plans and Stops

– Monthly—(2)Boundary will use the data from the first trading day of a
calendar month to the last trading day of that month.
– Quarterly—(3)Boundary will use the first trading day of each quarter to the
last trading day of each quarter.

Money Zone 2.0 User Guide

Money Zone Master View
7
The Money Zone Master View is a unique tool that allows us to see the Money Zones
and Value Lines in three different timeframes.

To activate the Master View, click on the Money Zone Icon on the toolbar. Once
activated, you will see the Money Zone Master View Interface.

Figure 7-1. The Money Zone Master View

The Master View can be configured in any way you like, but the longest term view is
required to be on the left, the medium term view in the middle, and the short term
view on right. In the example above, we are looking at the Master View for Cisco
Systems. The left pane gives us a one week view of the Money Zone, the middle pane
gives the previous session's view, and the right pane shows us the current sessions
view.

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Chapter 7 Money Zone Master View

You can also display the price chart (in bar chart format) and the Volume at Price
Histogram for each timeframe.

Figure 7-2. Master View of CSCO with Bar Chart and VAP Indicator Plotted

To display the Master View for any security in your Focus List, you can either double
click on the symbol in your list, or you can type the symbol into the Symbol field and
click Analyze.

The Money Zone Master View Settings

The Money Zone Master View is fully configurable, allowing you the ability to
personalize the settings. The settings are consistent across profile type. This means
that in real time profiles, you will have one set of settings, while you will have a
different set of settings if you are in an end of day profile.

Money Zone 2.0 User Guide

 Chapter 7 Money Zone Master View

Figure 7-3. The Master View Settings Interface

Settings
• Timeframe—This setting tells the Master View which periodicity to use for the
Money Zone calculations. In order to use a periodicity, it must exist in your
profile. For example, if you wish to have the calculations based on 1 minute
charts, that periodicity needs to exist in your profile. To add a periodicity to your
profile, click on Edit > Data Periods.
• Size—The incremental size of the unit used for calculation purposes. For
example, a size of .10 when using points as the unit means that the calculations
will be measured in ten cent increments.
• Unit—The unit that will used for the calculation.
– Ticks per Increment—Increments will be measured based on the tick size of
each security. This setting with a size of 1 is the best setting to use if you are
looking at futures charts or if you look at various types of securities (futures,
forex, stocks, etc.)

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Chapter 7 Money Zone Master View

– Points per Increment—Increments will be measured in price values (.01=1

cent, .25=25 cents, etc.)
– Increments—The number of increments are specified, and the calculations
will be distributed evenly across the defined size. For example, 100
increments will distribute the data across 100 different lines for display
purposes.
• Lookback (Days)—The number of days previous to the current boundary that
will be used for the calculation. For example, in a daily chart we use monthly
boundaries. So if we wanted to see the calculation reflect the previous month, we
would use a Lookback of 20 days.

The Money Zone Master View also provides you with a full palette of colors so that
you can customize how the information is presented to you.

Money Zone 2.0 User Guide

Additional Resources
E
This User Guide is designed to provide a reference for Money Zone owners so that they can
understand all of the components and settings in the module. If you wish to learn more about the
Money Zone, Nirvana Systems recommends the following resources:
• Introduction to Money Zone 2.0 seminar by Angela Duran

This seminar is included in your Money Zone 2.0Module purchase, and it

is highly recommended that you take the time to watch the presentation in
full. In this seminar Angela will guide you through the components of the
module and provide understanding for the MZ2 indicators and their
parameters as well as provide insight into how you can apply them to your
trading
• The Trade Master Series seminar with Jeff Drake and Frank Ochoa

Accelerate your learning curve of the Money Zone concept, its tools and
prepare for live trading with this comprehensive seminar.

Jeff Drake teaches a comprehensive Money Zone Strategy workshop,

complete with systems and stops.

Frank Ochoa will show you how to apply all the Money Zone components
to your trading for increased profits.
• Steidlmayer on Markets: Trading with Market Profile, 2nd Edition by
J. Peter Steidlmayer and Steven Hawkins

As mentioned in the introduction, the Money Zone 2.0 is based on the

concepts developed by J. Peter Steidlmayer that create a Market Profile.
This book lays the foundation for understanding and implementing the
Market Profile methodology by providing background information based
on Steidlmayer's experiences as a commodities trader, and showing how he
developed his ideas and learned to apply them successfully within the
markets. Hawkins moves on to fully discuss this groundbreaking approach
to trading the stock, options, and futures markets.

Nirvana Systems thanks you for your patronage, and wishes you the best of luck in all of
your trading endeavors.

© Nirvana Systems Inc. E-56 Money Zone User Guide