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MetaStock
Trading System - Automatic Support and
Resistance
Copied from
Technical Analysis of Stocks and Commodities
Magazine. This is in regards to an article on page
51 of the May 1998 issue.
In my article
"Automatic support and resistance" in
this issue, I present a computerized approach to
finding support and resistance levels on a chart.
To recreate the indicators and system described in
my article using MetaStock for Windows, enter the
following formulas:
Indicators:
S1:
IF(Ref(LOW,-4)=LLV(LOW,9),Ref(LOW,-4),PREVIOUS)
S2: IF(Fml("S1")=Ref(Fml("S1"),-1),PREVIOUS,Ref(Fml("S1"),-1))
S3: IF(Fml("S1")=Ref(Fml("S1"),-1),PREVIOUS,Ref(Fml("S2"),-1))
S4: IF(Fml("S1")=Ref(Fml("S1"),-1),PREVIOUS,Ref(Fml("S3"),-1))
S5: IF(Fml("S1")=Ref(Fml("S1"),-1),PREVIOUS,Ref(Fml("S4"),-1))
S6: IF(Fml("S1")=Ref(Fml("S1"),-1),PREVIOUS,Ref(Fml("S5"),-1))
WSO:
100*(1(Int(Fml("S1")/CLOSE)+Int(Fml("S2")/CLOSE)+Int(Fml("S3")/CLOSE)+Int(Fml("S4")/CLOSE)
+Int(Fml("S5")/CLOSE)+Int(Fml("S6")/CLOSE))/6)
R1:
IF(Ref(HIGH,-4)=HHV(HIGH,9),Ref(HIGH,-4),PREVIOUS)
R2: IF(Fml("R1")=Ref(Fml("R1"),-1),PREVIOUS,Ref(Fml("R1"),-1))
R3: IF(Fml("R1")=Ref(Fml("R1"),-1),PREVIOUS,Ref(Fml("R2"),-1))
R4: IF(Fml("R1")=Ref(Fml("R1"),-1),PREVIOUS,Ref(Fml("R3"),-1))
R5: IF(Fml("R1")=Ref(Fml("R1"),-1),PREVIOUS,Ref(Fml("R4"),-1))
R6: IF(Fml("R1")=Ref(Fml("R1"),-1),PREVIOUS,Ref(Fml("R5"),-1))
WRO: 100*(1(Int(Fml("R1")/CLOSE)+Int(Fml("R2")/CLOSE)
+Int(Fml("R3")/CLOSE)+Int(Fml("R4")/CLOSE)
+Int(Fml("R5")/CLOSE)+Int(Fml("R6")/CLOSE))/6)
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The indicators S1
through S6 and R1 through R6 should be plotted as
points and not as a continuous line.
Trading System Formulas and Parameters:
Enter long positions on either building support or
sustained uptrend and exit position using stops.
No short positions.
| Enter
Long: Fml("WSO") > Mov(
Fml("WSO") , 4 , S ) OR Mov(
Fml("WRO") , 30 , S ) > 95 |
Stop Out:
Breakeven stop:
Floor level at 2%
Trailing stop:
Profit risk of 10 Percent, ignoring 10 periods
Maximum loss stop:
Maximum loss of 7%
Other Conditions:
Initial equity =
1000, Long positions only, Trade price = close,
Trade delay = 0, Entry commission = 0%, Exit
commission = 0%, , Interest rate = 5%, Margin req.
100%
-- Mel Widner, Ph.D., 703 791-5910
E-mail techstrategies@msn.com
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