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Does anyone know how to set up the expert advisor
for the advanced trailing stop?
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<DIV
>From:
Richard
Dale
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Sent: Wednesday, November 05, 2003 4:58
AM
Subject: [Metastockusers] Metastock
Advanced Trailing Stop plugin
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
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