Trendlines - a short explanation

["Jacek Artymiak \(Hope Publishing\)" <jartymiak@xxxxxxxxxxxxxxxxxxxxxx>]

Hi,

Since so many of you asked how to implement trendlines in MetaStock, 
I put together a short how to for everyone to use. This is based on 
my article, so anyone who wants to know more will have to read it :-)

Please note that to keep things simple I've shown the most basic 
formulae. You may want to make them more complicated if you want :-)

Ok. To implement a trendline or a channel system, one needs to know 
the slope of the line, and the day it is supposed to start on.

There are two choices:

1) a horizontal line
2) a sloping line

Now, a horizontal line in MetaStock talk is just a number, i.e. a 
horizontal channel system, where the boundaries of a chanel are set 
at 10.25 and 15.125 would consist of the following formulae:

Enter long:

P<10.25

Close long:

P>15.125

2) A sloping line can be implemented in two ways:

a) when you know the daily (or other period's) increment value
b) when you know the angle of the line (easier to use than option a), 
since you can measure the angle using the Trendline by Angle tool)

Since option a) is not very useful, we'll see how option b) looks in 
MetaStock lingo:

Suppose that the boundaries of a channel are set at 10.25 and 15.125 
at the beginning of a trend and that we know that the slope of the 
channel is 23.234 degrees (we were smart and used 
the Trendline by Angle tool to measure it)

Here are the channel system formulae:

Enter long:

P<10.25+(sin(23.234)/cos(23.234))

Close long:

P>15.125+(sin(23.234)/cos(23.234))

If you try to implement these systems, they won't work for because 
you haven't set the time when they're supposed to kick in. 

Here's a hack that will let you specify the day when they're supposed 
to become operational:

Suppose you want to start the horizontal channel system to begin 
generating signals on 1st Sep 1996

Enter Long:

P<10.25 + 0 * BarsSince( ( DayOfMonth()=1 ) AND ( Month()=9 ) AND (
+ Year()=1996 ) )

Close Long:

P>15.125 + 0 * BarsSince( ( DayOfMonth()=1 ) AND ( Month()=9 ) AND (
+ Year()=1996 ) )

The appropriate formulea for the sloping channel are as follows:

Enter long:

P<10.25+(sin(23.234)/cos(23.234)) * BarsSince( ( DayOfMonth()=1 ) AND ( Month()=9 ) AND (
+ Year()=1996 ) )

Close long:

P>15.125+(sin(23.234)/cos(23.234)) * BarsSince( ( DayOfMonth()=1 ) AND ( Month()=9 ) AND (
+ Year()=1996 ) )

I hope this explains the principles behind my channel systems. You 
must remember thoug, that such a system will be working for one 
security only. You will need to copy it and change parameters for a 
different security.

Any comments, rants and raves are welcome!

Jacek Artymiak

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