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Theo,
Here's a bit of the text.
"For long trades, subtract the amount 3*ATR(10) from the highest high
over the last 10 days. We'll call this quantity our preliminary long
stop. Finally, use the highest value of the preliminary stop over the
last 20 days as the actual stop for long trades.
For short trades, add the amount 3*ATR(10) to the lowest low of the last
10 days, calling this quantity our preliminary short stop. Finally, use
the lowest value of the preliminary short stop over the last 20 days as
the actual stop for short trades."
Chande goes on to suggest experimenting with the multiplier and the time
periods to suit the stop to your trading vehicle and style.
I kept Chande's terminology, so you can easily verify my coding.
As to whether one is above or below the other, I would say it is not
relevant because only one can apply at a time. The point is to have a
stop that follows the trend but strikes a balance between being close
enough that you don't take large losses yet far enough away that you
don't get bounced out too easily. There are several ways to define a
trend and you could write code to switch between between the two. That
would not be very different from Andrew Abraham's "Trading the Trend"
(TAS&C 9/98) which was resurrected on this list recently.
HHP
==============================
> "Theo E.M. Lockefeer" wrote:
>
>
> ----- Original Message -----
> From: HHP <hhp@xxxxxxxx>
> To: <metastock@xxxxxxxxxxxxx>
> Sent: March 15, 2000 11:25 PM
> Subject: Re: Stop Loss
>
> > Theo,
> >
> > Use the 'short one' when you would sell short - i.e. in downtrends,
> and
> > the 'long one' in uptrends. Stay out of the market or use something
> > else when things are flat.
>
> HHP :
>
> That i understand but can you answer my 2 questions please ?
>
> 1) Can you please give additional explanation ?
>
> 2) When i plot the short one it's below the long one
> in general : is that ok ?
>
> Thx Theo.
>
>
> >
> > HHP
> > =======================
> >
> > > "Theo E.M. Lockefeer" wrote:
> > >
> > > Thanks HHP !
> > >
> > > Can you please give additional explanation ?
> > > When i plot the short one it's below the long one
> > > in general : is that ok ?
> > >
> > > Thx.
> > >
> > > Theo Lockefeer.
> > >
> > >
> > >
> > > ----- Original Message -----
> > > From: HHP <hhp@xxxxxxxx>
> > > To: <metastock@xxxxxxxxxxxxx>
> > > Sent: March 15, 2000 6:36 AM
> > > Subject: Re: Stop Loss
> > >
> > > > Here's a stoploss from Chande & Kroll's The New Technical Trader
> > > p.167,
> > > > 'Volatility-Based Trailing Stops'. There are three input
> variables
> > > to
> > > > play with.
> > > >
> > > > {Volatility Stop (Long)}
> > > > Pds1:= Input("ATR Lookback?",2,100,10);
> > > > Mult:= Input("ATR Multiplier?",1,20,3);
> > > > Pds2:= Input("HHV Lookback?",2,100,20);
> > > > PrelimStop:= HHV(H,Pds1) - ATR(Pds1)*Mult;
> > > > ActualStop:= HHV(PrelimStop,Pds2);
> > > > ActualStop
> > > >
> > > > {Volatility Stop (Short)}
> > > > Pds1:= Input("ATR Lookback?",2,100,10);
> > > > Mult:= Input("ATR Multiplier?",1,20,3);
> > > > Pds2:= Input("LLV Lookback?",2,100,20);
> > > > PrelimStop:= LLV(L,Pds1) + ATR(Pds1)*Mult;
> > > > ActualStop:= LLV(PrelimStop,Pds2);
> > > > ActualStop
> > > >
> > > > HHP
> > > > =========================
> > > >
> > > > Simon Roberts wrote:
> > > > >
> > > > > wally,
> > > > > can't quite figure how this will work. if you leave the stop
> at
> > > 80% of your
> > > > > close it will work well all the way up; it won't ever trigger;
> but
> > > on the
> > > > > way down, it will carry on down beneath you, in a comforting
> sort
> > > of way.
> > > > > It's a bit like hanging out a sell now sign on the end of a
> rope
> > > hanging
> > > > > from your hot air balloon, you only catch up with it when you
> hit
> > > the
> > > > > ground.
> > > > >
> > > > > one way to plot some price offsets is with the moving average
> > > indicator,
> > > > > which is on the toolbar, indicator quicklist, which lets you
> input
> > > say 1 day
> > > > > average, at any displacement from the price, up down and or
> > > sideways.
> > > > > Simon
> > > > >
> > > > > -----Original Message-----
> > > > > From: j seed <jseed_10@xxxxxxxxxxx>
> > > > > To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> > > > > Date: 14 March 2000 16:04
> > > > > Subject: Re: Stop Loss
> > > > >
> > > > > >Wallie,
> > > > > >Pie of cake! First go to the Indicator Builder...click on
> > > new...name your
> > > > > >new indicator(Wallie's 20% Stop Loss Indicator). Now the hard
> > > part...how
> > > > > >does your original indicator plot? Is it an oscillator or a
> > > simple line
> > > > > >study? Oscillators plot above and below a specific point
> usually
> > > zero. Line
> > > > > >studies plot price values. If you are willing to accept a
> value
> > > that is 80%
> > > > > >of your original indicator value then go to functions and
> select
> > > your
> > > > > >indicator (ie. let's use CCI(14)...) Finally, we want a value
> of
> > > 80% so
> > > > > >we'll multiply by .80 . So here's your indicator:
> > > > > >W20SLI
> > > > > >CCI(14) * .80
> > > > > >
> > > > > >You may also want to use the other side of the equation by
> > > multiplying by
> > > > > >120%; so your indicator would be:
> > > > > >
> > > > > >CCI(14) * 1.20
> > > > > >
> > > > > >You can plot both lines at the same time in the same
> indciator by
> > > defining
> > > > > >them in an indicator as follows:
> > > > > >
> > > > > >{W20SLI}
> > > > > >MINUS:= CCI(14) * .80;
> > > > > >PLUS:= CCI(14) * 1.20;
> > > > > >MINUS;
> > > > > >PLUS;
> > > > > >
> > > > > >Okay, we've helped you and now it's your turn to help us!
> Share
> > > the results
> > > > > >of what you get!
> > > > > >
> > > > > >J.
> > > > > >
> > > > > >
> > > > > >>From: "Norman Walsh" <nwalsh@xxxxxxxxxxx>
> > > > > >>Reply-To: metastock@xxxxxxxxxxxxx
> > > > > >>To: <metastock-list@xxxxxxxxxxxxx>
> > > > > >>Subject: Stop Loss
> > > > > >>Date: Mon, 13 Mar 2000 20:47:02 -0000
> > > > > >>
> > > > > >>Hi
> > > > > >>As a new comer to metastock I would like to know how to plot
> an
> > > Indicator
> > > > > >>20% below a line chart, as a stop loss. Also how to start it
> at
> > > a specific
> > > > > >>date.
> > > > > >>
> > > > > >>Thanks in advance.
> > > > > >>
> > > > > >>wallie.
> > > > > >
> > > > > >______________________________________________________
> > > > > >Get Your Private, Free Email at http://www.hotmail.com
> > > > > >
> > > > > >
> > > >
> >
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