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I'm not sure I understand all of your quesions.
It doesn't sound like you set it up first before trying to read the
code. You open the expert advisor, open new, put a title in the box,
click on hightlight's. paste the code we've provided into the box,
pick green for the color and close it up.
Open the a chart with the Valueline Arithmetic Index as your
security, use a line for the price, color it red and attach this
expert.
The Valueline expert is simply a rise and fall by 4% trend change
expert. If you feel you need to understand more about it, read Martin
Zweig's Winning on Wall Street. The system doesn't look back at any
thing except that 4% change. It's always slightly imprecise because
we are working with daily highs, lows and closes which never hit
exactly on the 4% when the line changes color. However, the model is
close enough to maintain correct buy and sell signals.
A lot people have made some variations to the model, using Friday to
Friday closing prices for a weekly version, daily highs to lows and
daily closing to closing. They all work similiarly. This is one
version that works well, especially when you apply other indicators
to these signals. The models signals alone generate over 22% a year,
but you can improve on that by not taking some of the signals that
are whipsaws.
For example, in July the model crossed back and forth over the 20
dma. My indicators held during those crosses so I wouldn't have taken
those signals and sure enough the model popped back up over the 20
dma quickly. I eliminated a quick turnaround trade that wouldn't have
made me any money and would have cost me time and expense.
If you follow the model, you'll make money. You can test it by hand
by looking over the last two or three years and taking each buy and
sell signal to see where you would have come out. I would never
follow a model that I had not done that kind of testing on. This
model has held up for many years.
Set it up and try it.
JO
--- In equismetastock@xxxxxxxxxxxxxxx, "metastockuser"
<metastockuser@xxxx> wrote:
> I'm not a programer and I'm trying to figure out how this formula
works.
>
> when you use the command >lowest(c)< I take that to mean the lowest
> close. But how many closes is it looking at? It appears to me that
a
> value of 1 or -1 is being applied depending on if the close is 4%
> above the lowest close or 4% below the highest close, but I'm not
sure
> how far back the system is looking.
>
> If somone wouldn't mind a very brief explananation of what that
> program is doing along with the Close issue I'd appreciate it.
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, manohohman <no_reply@xxxx>
wrote:
> > Roy (code refinement) and I (theory and application) took Zweig's
old
> > 4% indicator based on the Valueline Geometric Index, updated it,
> > added a twist to it and refined it for trading the SPY Daily.
> >
> > Here's how it works.
> >
> > 1. Instead of the Valueline Geometric Index, this system uses the
> > Valueline Arithmetic Index. (This is an important difference!)
This
> > index is $VLE on Esignal. (I don't know what it is on whatever
free
> > service you've found so don't ask me.)
> >
> > 2. Once you've opened that Index on a daily chart, color the
price
> > line (not bars) red, create the following expert, and apply it.
> >
> > Highlight Code Green
> >
> > X:=If(Cum(Ref(C>Lowest(C)*1.04 OR C<Highest(C)*.96,-1))=0,
> > If(C>Lowest(C)*1.04,1,
> > If(C<Highest(C)*.96,-1,0)),
> > If(PREV=1,
> > If(C<HighestSince(1,PREV<1,C)*.96,-1,PREV),
> > If(C>LowestSince(1,PREV>-1,C)*1.04,1,PREV)));
> > I:=Cum(1)<=2;
> > State:=BarsSince(X=1 OR I)<BarsSince(X=-1 OR I)+(Cum(X=1)=1);
> > State;
> >
> > 3. Since March your price line should be green, except for two
red
> > down turns.
> >
> > 4. To this chart apply a simple 20 ma.
> >
> > 5. Open another chart of the SPY daily. Create a new window on
the
> > Valueline chart, copy the SPY daily and paste it into the new
window
> > on the Valueline Chart. Close the SPY chart.
> >
> > 6. Here are the trading rules. You must follow them exactly. A
buy
> > signal is created when either the price line turns green or
crosses
> > the 20 dma. You take which ever signal comes first. It doesn't
matter.
> >
> > A sell signal comes when the price line turns red or crosses
below
> > the 20 dma. It doesn't matter which comes first. You take the
first
> > signal from either indicator. You sell the long and take the
short.
> > If you're trading in a retirement account, you can't short but
you
> > can buy Rydex, Profunds or Potomac on the short side.
> >
> > 7. To avoid whipsaws, you can use a pyramiding technique of
buying
> > one third of your buyin at a time. It will limit losses on the
> > whipsaws but reduces your overall return somewhat. It's all in
your
> > risk profile. You decide.
> >
> > 7. Since you can't buy the Valueline Arithmetic Index you buy the
SPY
> > on the Valueline entry and exit signals.
> >
> > 8. Don't apply this to any other security except the SPY.
> >
> > 9. How good does it work?
> >
> > Over the last 10 years, it's averaged 22% a year, with one small
> > losing year and 40% plus gains the last 3 years. Just take
whichever
> > signal occurs first, either the green indicator signal or the 20
dma
> > crossover.
> >
> > This is as simple as TA gets. Use it to your advantage. I got
this by
> > paying attention to some of my systems development books. It's
about
> > twice as profitable as Zweig's original method, and is about 3
times
> > more profitable than buy and hold.
> >
> > Now isn't this why you bought MS in the first place. I know,
don't
> > tell me, all of you arrogant wizard traders won't waste your time
on
> > a measely 22% a year unless I can hang a 1 in front of the 22.
No,
> > you killer TA masters are going to make buckets of money! Really,
> > well here's an article to put that theory to rest.
> >
> > www.investorhome.com/psych.htm
> >
> > Read this article on behavioral finance and see what arrogance
gets
> > you......
> >
> > This system is free, my momma could make money with it, and now
you
> > don't have any excuses for losing dough.
> >
> > JO
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