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I am a trend trader and I am interested to know what happens to these formulas
when the underlying equity enters a trading range.
Would you get whiplash?
It has been my experience the more sensitive a system is to "potential breakouts"
the more false signals are generated.
I haven't programmed everything on this thread related to this subject yet but I
have started.
David Duggan
Harvey Pearce wrote:
> Andy/
>
> You never know who's listening! Your reply was all well and good, but
> missed the point for anyone interested in using your indicator. It
> would have been helpful if you had provided your own instructions to
> implement it in MetaStock. Failing that, I invite you to criticise my
> attempt, which I append. My choice of names was not the best but I
> think the coding is accurate. I have made one revision to the Expert
> Advisor instructions, and I'll take this opportunity to revise them
> further.
>
> In my para. 3 the Uptrend Condition should read:
> C>FmlVar("Trading the Trend","HiLimit") AND
> C>FmlVar("Trading the Trend","LoLimit")
> and in my para. 4 the Downtrend Condition should read:
> C<FmlVar("Trading the Trend","HiLimit") AND
> C<FmlVar("Trading the Trend","LoLimit")
>
> I stand by my statement that the indicator is too rudimentary to be
> traded as a system, but I welcome a contrary opinion.
>
> Harvey Pearce, Victoria, B.C., Canada
> =====================================
>
> Andrew Abraham cta wrote:
> >
> > Hi Anil,
> >
> > I wrote the article and I have to tell you ... he wasn't even close to he
> > concept.. The most important thing is my indicator **Trend Alert which helps
> > you find yourself in the trend.. I would like to point out.. it is not
> > formulas and systems..It is you the trader ... The most important thing as
> > traders is that we need to be committed.. flow with our trades.. have a
> > carefree state of mind.. ..winning attitude.. stay in the oppurtunity flow..
> > don't expect the market to do anything for us.. we need just to be there
> > waiting for our low risk trades.. realize that each trade has a probable
> > outcome.. and is independant from every other trade..This is what is really
> > important.. there are a million different ways to make it in this game.. but
> > it must match your personality...
> >
> > Good luck
> > Andy Abraham cta
> > Angus Jackson Futures
> > -----Original Message-----
> > From: Anil Chugani <achugani@xxxxxxxxxxxxxxxx>
> > To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> > Date: Wednesday, September 09, 1998 11:19 AM
> > Subject: "Trade The Trend"
> >
> > >
> > >Could someone please forward the "Trade The Trend" formula, by A.J. Maas
> > >recently seen on this list, to me.
> > >
> > >Thanks in advance.
> > >
> > >Anil Chugani
> > >
> =========================================================================
>
> An article in the September 1998 TAS&C, "Trading the Trend" by Andrew
> Abraham, was about one form of stoploss exit: subtract some manipulation
> of the true range from the highest high (or add it to the lowest low)
> and exit when the close crosses that. Members of Chuck LeBeau's Traders
> Club will recognise the "Chandelier Exit".
>
> Here's my version of it (for MS v 6.5). I've written it this way to
> make it easy to change the lookback periods and the multiplier.
>
> Name: Trading the Trend
>
> Pds:=21;
> Mult:=3;
> TruRan:=Mov(ATR(1),Pds,W)*Mult;
> HiLimit:=HHV(H,Pds)-TruRan;
> LoLimit:=LLV(L,Pds)+TruRan;
> If(C>HiLimit,HiLimit,LoLimit)
>
> 1. After closing the Indicator Builder click on the Expert Advisor (the
> guy in the bowler/derby hat).
> 2. Click on New, then the Name tab, type in Trading the Trend.
> 3. Click on the Highlights tab, select the first line so that it is
> highlighted, click Edit, type in the name Uptrend, select Colour Blue,
> select Condition, type in C>FmlVar("Trading the Trend","HiLimit"),click
> OK,
> 4. Still on the Highlights tab, select the second line, click Edit,
> type in the name Downtrend, select Color Red, select Condition, type in
> C<=FmlVar("Trading the Trend","HiLimit"), click OK, click OK again.
> 5. If you have a chart open that you want to use this on, click Attach,
> otherwise click Close. In the latter case, when you open a chart and
> plot the trendline, click on the Expert Advisor, select Trading the
> Trend, and click on Attach.
>
> I've given the Expert steps in detail for any who may not be familiar
> with its use. To experiment with variations in the lookback periods and
> the multiplier you can do so in either the Indicator Builder, or
> right-click the indicator on the chart, select Properties, then the
> Formula tab, and make the changes (e.g. try a lookback period of 10, and
> a multiplier of 2.5). As implemented above, the Expert should change
> accordingly. This shows the trade-offs that have to be made between
> near and distant stops. This is too rudimentary to be traded as a
> system - the whipsaws would chop you to pieces - but the exits should
> help to limit drawdowns.
>
> A very similar stoploss is given in Chande & Kroll "The New Technical
> Trader", pp.167 - 169, "Volatility-Based Trailing Stops". My preference
> is to plot both the high and the low exit lines in contrasting colours,
> dispensing with the switch between them, and dispensing with the
> Expert. If anyone wants help with the code, just say so. And if I've
> screwed something up again, say so.
>
> Harvey Pearce, Victoria, B.C., Canada
> =====================================
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