

Confirming Price Trend System by Barbara Star 


Barbara Star's article in this issue, "Confirming Price Trend," discusses using rsquared
and the slope of a linear regression line in conjunction with moving averages and the stochastic.
All these indicators are built into MetaStock and require no custom formula to use.
Here is a system based on the suggestions in her article.
Long positions are entered when:
 A 10period moving average is above a 30period moving average
 The stochastic oscillator has risen above 20
 Rsquared is above 0.2
 A 20period linear regression line slope is above zero.
Short positions are entered when:
 A 10period moving average is below a 30period moving average
 The stochastic oscillator has fallen below 80
 Rsquared is above 0.2
 A 20period linear regression line slope is below zero.
Positions are closed when:
 Rsquared is equal to 0.2 or less
 A 20period linear regression lines slopes against the position
 Either the moving averages or the stochastic oscillator give an opposing signal.
The formulas and the steps to recreate this system in MetaStock are shown here:
1. Select Tools > the Enhanced System Tester
2. Click "New"
3. Enter a name
4. Select theBuy Order tab and enter the following formula:


stsig:=if(cross(stoch(14,3),20),1,if(cross(80,stoch(14,3)),1,prev));
mov(c,10,S)>mov(c,30,s) AND rsquared(c,20)>.2 AND
LinRegSlope(c,20)>0 AND stsig=1


5. Select theSell Order tab and enter the following formula: 

stsig:=if(cross(stoch(14,3),20),1,if(cross(80,stoch(14,3)),1,prev));
rsquared(c,20)<=.2 AND LinRegSlope(c,20)<=0 AND
(stsig=1 OR mov(c,10,S)<mov(c,30,s))


6. Select theSell Short Order tab and enter the following formula: 

stsig:=if(cross(stoch(14,3),20),1,if(cross(80,stoch(14,3)),1,prev));
mov(c,10,S)<mov(c,30,s) AND rsquared(c,20)>.2 AND
LinRegSlope(c,20)<0 AND stsig=1


7. Select theBuy to Cover Order tab and enter the following formula: 

stsig:=if(cross(stoch(14,3),20),1,if(cross(80,stoch(14,3)),1,prev));
rsquared(c,20)<=.2 AND LinRegSlope(c,20)>=0 AND
(stsig=1 OR mov(c,10,S)>mov(c,30,s))


8. Click OK to close the system editor. 



William Golson
MetaStock Support Representative
Equis International (A Reuters Company)
801 2659998, www.metastock.com


Source / From: 
TOP 
http://www.traders.com 


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