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<DIV><FONT color=#000000 size=2>All,</FONT></DIV>
<DIV><FONT color=#000000 size=2> I've been playing with
the MetaStock V6.5 Profit System Test for the PV Binary Wave. As you know,
I used a simple zero cross over test to determine the appropriate variables for
each of the Binary Wave components. Now I'd like to improve on that a
little. The original test was:</FONT></DIV>
<DIV><FONT color=#000000 size=2> 05_Tema PV Binary Wave,
QStick</FONT></DIV>
<DIV><FONT color=#000000 size=2> ENTER LONG:</FONT></DIV>
<DIV><FONT color=#000000 size=2>
Cross(Fml("Tema PV Binary Wave"),0)</FONT></DIV>
<DIV><FONT color=#000000 size=2> ENTER SHORT:</FONT></DIV>
<DIV><FONT color=#000000 size=2>
Cross(0,Fml("Tema PV Binary Wave"))</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2> A zero cross over
system gives a lot of false signals and whipsaws when there is jitter around the
zero level. The first thing I want to do is to decrease the whip saws by
leaving a neutral region and having the Enter Long trigger to be greater then
zero and the Enter Short trigger to be less than zero. I also want to
optimize just a little, not enough to curve fit, but enough to get into the
right ball park. I tested several of my stocks to see what the best values
would be for opt 1 & 2. I also used Fibonacci numbers. Therefore
the test would become:</FONT></DIV>
<DIV><FONT color=#000000 size=2> 05_Tema PV Binary Wave, QStick
<DIV><FONT color=#000000 size=2> ENTER LONG:</FONT></DIV>
<DIV><FONT color=#000000 size=2>
Cross(Fml("Tema PV Binary Wave"),opt1)</FONT></DIV>
<DIV><FONT color=#000000 size=2> ENTER SHORT:</FONT></DIV>
<DIV><FONT color=#000000 size=2>
Cross(opt2,Fml("Tema PV Binary Wave"))</FONT></DIV>
<DIV> OPT 1: Min = 1, Max =
5, Step = 2</DIV>
<DIV> OPT 2: Min = -13 Max = -8 Step =
5</DIV>
<DIV> </DIV>
<DIV> That test gives some good results, but I was still
getting too many false signals. Therefore, I decided to use the Alert
function to use the crossover as a trigger. When you use the Alert
function and the trigger is hit, a signal will be issued when the other
conditions are true as long as they are true within the number of days allowed
by the Alert function. I decided that I wanted confirmation within 8 days
or I didn't want a signal. I also decided that my confirmation would be
the QStick function and the short term moving average both rising to confirm a
long signal and both falling to confirm a short signal. Therefore, the
final test became:</DIV>
<DIV> 05_Tema PV Binary Wave, QStick
<DIV><FONT color=#000000 size=2> ENTER LONG:</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT>
Alert(Cross(Fml("Tema PV Binary Wave"),opt1),8)
AND<BR> HHV(Fml("Tema QStick"),5) =
HHV(Fml("Tema QStick"),13)</DIV>
<DIV> AND HHV(Mov(C,21,VAR),5) =
HHV(Mov(C,21,VAR),13)</DIV>
<DIV> ENTER SHORT:</DIV>
<DIV> Alert(Cross(opt2,Fml("Tema PV Binary
Wave")),8) AND<BR> LLV(Fml("Tema
QStick"),5) = LLV(Fml("Tema QStick"),13)
<BR> AND LLV(Mov(C,21,VAR),5) =
LLV(Mov(C,21,VAR),13)</DIV>
<DIV> OPT 1: Min = 1, Max =
5, Step = 2
<DIV> OPT 2: Min = -13 Max = -8 Step =
5</DIV>
<DIV> </DIV>
<DIV> That's it for now. I'll attach a self
extracting zipped import file (MS65PVBW.EXE) for the Binary Wave formulas and
test. Just double click on the file and tell it the subdirectory or floppy
to unzip to. Then use the instructions on Page 215 of the MetaStock manual
to import the formulas and test. Play with them and let me know what you
think. Suggested improvements will be welcome.</DIV>
<DIV> </DIV>
<DIV>JimG</DIV></DIV>
<DIV> </DIV></DIV></FONT></DIV></BODY></HTML>
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