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As promised a while back to several people, I've put together a advanced trailing stop system... For those who don't know what a trailing stop looks like, here's a chart as an attachment. Here's a cut-and-paste of my introduction to the Advanced Trailing Stop. INTRODUCTION The Advanced Trailing Stop, based on the <A href="">Chandelier Exit developed by Chuck Le Beau, is volatility-based. Using the Metastock Developer's Kit, I developed a I developed a Metastock DLL because the Metastock Formula Language lacked a simple way of referencing prices from the entry day of the trade. If you just want to download the DLL, scroll to the bottom of this page. Many traders set stops according to a fixed % movement. However, the % method needs to be adjusted according to the volatility of the security being traded. Using a volatility based stop means that your stop automatically takes account of the security's volatility. For example, if the security has a high volatility, your stops will be a reasonable distance away from the price action (to give the security room to move in its normal intraday movements). If a security has a low volatility then the stop will be relatively closer to the price action. If the security's volatility changes whilst a trade is underway, the stops will adjust according to this volatility. The advantage to this type of stop is that it can be used in any market (blue chip stocks, speculative stocks, futures, index trading, mutual funds etc.) The Advanced Trailing Stop has the following components: Initial Stop, expressed in terms to the entry day (eg. Closing price less 2 ATRs) Trailing Profit stop, calculated on each bar of the day after entry (eg. High less 3.5 ATRs) Optionally, you can also incorporate the following types of stops: Breakeven stop - this is calculated on the entry day and is implemented when the stock passes a "transition point". (eg. Move my initial stop to a breakeven stop when the price closes 2 ATRs above my entry price). I believe this transition/breakeven stop was part of the original Turtles trading technique. Pyramid Points/Tightening Stops - the Trailing Profit Stop can be recalculated when the stock passes further transition points. I have defined two such points. (eg. When the stock moves more than 4 ATRs above my entry price, change to a trailing profit stop that is the High less 3 ATRs. If it reaches 6 ATRs above my entry price, change to a trailing profit stop that is the high less 2.5 ATRs). Chuck Le Beau talks about this tightening of the stops in his original newsletter. If any of your stops are hit, the Stop Loss line will continue to be drawn across the screen. This is good for your psychologically if you can't get out of a trade. It'll keep telling you to get out! The line will not trail the price any further (it will be flat) just to re-emphasise that you should be out of the trade. -------------------- More of details at: <A href="">http://www.TraderNexus.com/ It's suitable for Metastock v7 and v8 and it's FREE! I hope this plugin helps you in your trading. Comments welcome and appreciated. <FONT size=2> Cheers,Richard.Norgate Investor Services- Premium Quality Stock and Futures Data for Australian, Asian, European & US Markets -<A href="">www.premiumdata.net Yahoo! Groups Sponsor To unsubscribe from this group, send an email to: equismetastock-unsubscribe@xxxxxxxxxxxxxxx Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service. Attachment: ORI2.5INIT4TPS.png Description: PNG image Attachment:
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