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<DIV>See my previous mail("Re: Equis & Millinium") send to the
List as to why upgrading<BR>to newer and therefore also usualy better versions,
in the end, always pays off.</DIV>
<DIV>Anyway here
goes..........<BR><BR>================================================================<BR>
SMARS - Dennis Tilley for METASTOCKv6.0<BR>----Simple Moving Average crossover
trading system using Resistance &
Support----<BR>---------------------------------------------------------------------------------------------------------------------<BR>Rewritten
980929 by Ton Maas - <A
href="mailto:Ms-IRB@xxxxxxxxx";>Ms-IRB@xxxxxxxxx</A> - Amsterdam - the
Netherlands.<BR>(The article + original Equis formulas written for Metastockv6.5
are printed further below).<BR><BR>In the TASC Sept98 issue, Dennis Tilley uses
support and resistance to confirm price<BR>and simple moving average (SMA)
crossover signals in his article "Moving averages<BR>with resistance and
support."<BR><BR>In MetaStock for Windows, you can easily recreate the
SMARS indicators discussed<BR>in Tilley's article. First, choose Indicator
Builder from the Tools menu in MetaStock 6.0.<BR>Next, choose New and enter the
following formulas:<BR><BR>Resistance<BR>ValueWhen (1,Cross(Mov(C, 10,
S),C),HHV(H, 10))<BR><BR>Support<BR>ValueWhen (1,Cross(C,Mov(C, 10, S)),LLV(L,
10))<BR><BR>Resistance *
F<BR>ValueWhen(1,Cross(Mov(C,10,S),C),HHV(H,10))*((100-10)/100)<BR><BR>Support *
F<BR>ValueWhen(1,Cross(C,Mov(C,10,S)),LLV(L,10))*((10/100)+1)<BR><BR>(Note that
it's much easier to see the difference between the resistance and support
lines<BR>-individualy- and the 2 sets of resistance and support lines -as a
set-, if you change the<BR>color and the style for all of them, first per set,
then per line.)<BR><BR>To display the indicators in MetaStock 6.0<BR>1. Drag 2x
the standard build-in "Moving Average" indicators from the Indicator
QuickList<BR> into the price window. Choose simple as
the method, enter the time periods 50<BR> and 100 (for a
"10 weekly" and a "20 weekly" on a daily chart) and then
click OK.<BR><BR>2. Drag the "Resistance" and the "Support"
indicators from the QuickList into the price<BR>
window.<BR><BR>3. Drag the "Resistance * F" and "Support *
F" indicators into the price window.<BR><BR>(Note that the no.3 indicators
are a standard 10% difference from the no.2 indicators.<BR>The time periods used
are a standard 10 for all of the in the formulas internaly used<BR>moving
averages.)<BR><BR>Regards,<BR>Ton Maas<BR><A
href="mailto:Ms-IRB@xxxxxxxxx";>Ms-IRB@xxxxxxxxx</A><BR><BR>=======================================================<BR><BR>In
METASTOCK 6.5(the original formulas)<BR><BR>Resistance and Support<BR>LookBack
:= Input("Look Back Periods",1,1000,10);<BR>Resistance :=ValueWhen
(1,Cross(Mov(C, LookBack, S),C),HHV(H, LookBack));<BR>Support :=ValueWhen
(1,Cross(C,Mov(C, LookBack, S)),LLV(L,
LookBack));<BR>Resistance;<BR>Support;<BR><BR>Resistance and Support *
F<BR>PrCnt:=Input("Percentage",0,100,10);<BR>LookBack:=
Input("Look Back
Periods",1,1000,10);<BR>Resistance:=ValueWhen(1,Cross(Mov(C,LookBack,S),C),HHV(H,LookBack));<BR>Support:=ValueWhen(1,Cross(C,Mov(C,LookBack,S)),LLV(L,LookBack));<BR>Resistance
* ((100-prcnt)/100);<BR>Support * ((prcnt/100)+1);<BR><BR>(Note that it's much
easier to see the difference between the resistance and<BR>support * F lines and
the actual resistance and support lines if you change the<BR>color and/or style
of one of them.)<BR><BR>To display the indicators in MetaStock 6.5, drag the
moving average indicator from<BR>the Indicator QuickList into the price window.
Choose simple as the method, enter<BR>the time periods and then click
OK.<BR><BR>Now, drag the resistance and support indicator from the QuickList
into the price<BR>window. You will be prompted to enter the lookback periods.
You should select the<BR>same time periods that you used for the moving
average.<BR><BR>Finally, drag the "resistance and support * F"
indicator into the price window. You will<BR>be prompted to enter the percentage
and the lookback periods. If you would like the<BR>indicator to be a 10%
difference from the resistance and support line, you would<BR>enter 10. Again,
you should select the same time periods you used for the<BR>moving
average.<BR><BR>--Allan J. McNichol, Equis International<BR>800 882-3040, 801
265-8886<BR>Internet: <A
href="http://www.equis.com";>http://www.equis.com</A><BR><BR>======================================================<BR>-----Oorspronkelijk
bericht-----<BR>Van: Matt Tway <<A
href="mailto:mtway@xxxxxxxxxxx";>mtway@xxxxxxxxxxx</A>><BR>Aan: <A
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A> <<A
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A>><BR>Datum:
dinsdag 29 september 1998 1:21<BR>Onderwerp:
SMARS<BR><BR><BR>>Hi,<BR>><BR>>Has anyone implemented the SMARS system
found in the September<BR>>issue of TASC in Metastock 6.0 ? I see they gave
the Metastock<BR>>eample in 6.5
format...<BR>><BR>>Matt<BR>======================================================<BR></DIV>
<BLOCKQUOTE>
<CENTER>
<P>
<HR noShade SIZE=1>
<B><FONT size=+1>TRADING TECHNIQUES
<HR>
<BR><BR></FONT><FONT size=+4>Moving Averages With Resistance And Support
<HR>
</FONT><I>by Dennis L. Tilley<BR>
<HR>
</I></B><I><FONT size=+1>Moving averages are a popular way to signal trends.
Here's how to combine moving averages and the classic chart analysis of
support and resistance for trading mutual funds.</FONT></I><BR>
<HR>
<P></P></CENTER>
<P><FONT size=+2>M</FONT>ost simple moving average systems require one or
two additional confirmation signals to avoid excessive whipsaw trades. Such
confirmation signals can be based on features of moving averages such as the
crossover of multiple moving averages or the reversal of the moving average
slope. Momentum, volatility, volume and other nontrend indicators can also
serve to confirm moving average buy and sell signals.</P>
<P>In an effort to develop simple and robust stock and mutual fund trading
systems, I have found that combining the simple moving average (SMA) with
the concept of resistance and support very effective. Here is a mechanical
system for combining these two tried-and-true tools to provide a robust,
minimal-whipsaw, intermediate-term mutual fund trading system. I have used
this system successfully for about four years to switch emerging markets
funds and small-cap funds to and from a Standard & Poor's 500 index fund
and/or a money market fund.</P>
<H4><BR>SMA STRENGTHS</H4>
<P>I use the most common implementation of an SMA system, which is to buy
when the price closes above the SMA and sell when the price falls below the
SMA. The strengths of the SMA system compared to other trading techniques
are objectivity, simplicity and its trend-following nature. The SMA is
objective because it provides unambiguous buy and sell signals; thus, it can
be back-tested and suitably optimized.</P>
<P>The simplicity of the SMA, in that it has only one parameter to fit (the
lookback period), generally leads to a robust system. By <I>robust</I>, I
mean that it stands a good chance of working in the future. As discussed in
a recent STOCKS & COMMODITIES article by Jeffrey Owen Katz and Donna
McCormick, a rule of thumb in evaluating trading systems is that the more
parameters there is to optimize, the less robust the system is. Taken to the
extreme, many fitting parameters can be used to curve-fit past data to
eliminate all whipsaws while maintaining good performance. The potential of
such a system working in the real world is nil.</P>
<P>The trend-following feature of the SMA is highly desirable because it
resists becoming outdated as markets change character. Independent of the
fundamentals driving the market, trend-following techniques are designed to
capture extended runs in both bullish and bearish directions. This is
especially true for intermediate time-scale movements in the stock market --
those where typical peak-to-trough and trough-to-peak movements are in the
10-30% range, with a corresponding time scale on the order of two to six
months.</P>
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<P><BR><B>FIGURE 1: MONTGOMERY EMERGING MARKETS FUND (MNEMX),
1995.</B><I>Trading when the weekly close crosses above and below the 10-week
moving average would have easily outperformed the fund in 1995.<BR>
<HR>
<BR>Dennis Tilley trades his own portfolio of mutual funds and stocks. He
received a master's degree in mechanical and aerospace engineering from
Princeton University in 1991 and works in spacecraft propulsion research and
development. He can be reached at OPIECJ@xxxxxxxx</I><BR>
<P></P></CENTER>
<BLOCKQUOTE>
<H5><I>Excerpted from an article originally published in the September 1998
issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 1998, Technical Analysis, Inc.</I> <A
href="http://www.traders.com";>http://www.traders.com</A></H5></BLOCKQUOTE>
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