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MT Metastock Part 3 Relative Strength Comparison RSC The Key Success Tool in Trading by Stock Market Sectors

This article discusses coding trend and volatility components into a mechanical trading system in MetaStock. It describes using the highest high price in the last 240 days occurring within the last 20 days to identify trending stocks. This criteria, along with others checking average true range and average volume, forms the basis of a simple entry system that adheres to the KISS principle. Future articles will address additional components to create a profitable trading strategy.

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219 views2 pages

MT Metastock Part 3 Relative Strength Comparison RSC The Key Success Tool in Trading by Stock Market Sectors

This article discusses coding trend and volatility components into a mechanical trading system in MetaStock. It describes using the highest high price in the last 240 days occurring within the last 20 days to identify trending stocks. This criteria, along with others checking average true range and average volume, forms the basis of a simple entry system that adheres to the KISS principle. Future articles will address additional components to create a profitable trading strategy.

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JustGentle
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title:(MT) Metastock Part 3: Relative Strength Comparison (RSC) The Key Success

Tool In Trading By Stock Market Sectors


author:David Jenyns
source_url:http://www.articlecity.com/articles/business_and_finance/article_6190.sh
tml
date_saved:2007-08-23 17:04:55
category:business_and_finance
article:
In Part 2, of Designing a Trading System in MetaStock I covered how to code the
first two of the four major components of a mechanical entry system. I had
explained the coding of price and liquidity. In this article, I will cover the
steps for coding the remaining two components, trend and volatility, into
MetaStock. In the end, you will have the complete codes for a mechanical entry
system.
Let's begin with trend identification. Remember, 'the trend is your friend' when
trading. You always want to trade with the trend, not against it. Think of it this
way, if you were swimming in the sea, and got yourself caught in a rip tide, is it
easier to swim with the current or against it It is the same with trading with a
trend.
There are many ways to identify trends, and it's not particularly important which
method you use. You just need to use one. One of my preferred methods for
identifying trending stocks is to find stocks that are trading at their current
highs. You can do this by stipulating that the highest high price must have been
achieved in the last 'x' number of days.
Once again, the variables you use will depend on the time frame you are trading.
But for this example, you want the highest high price in the last 240 days to have
occurred in the last 20 days.
Using the formula reference section in the MetaStock Programming Study Guide, you
can find the syntax of the highest high function, and then plug in the details.
Then, using the 'less than' symbol, you can specify the number of days must be less
than 20. In MetaStock language that would be:
HHVBars(H,240) 1.5 and

ATR(21)/Mov(C,21,S)*100 1 and

Mov(v,21,s)*C > 200000 and

HHVBars(H,240) 1.5 and

ATR(21)/Mov(C,21,S)*100 < 6
You now have now a workable entry system. Not only did you construct a robust
system, but it also adheres to the KISS principal (Keep It Simple Simon). This
system can be cut and pasted into the Explorer within MetaStock. However, the entry
is only the beginning of a successful trading system. In later parts of this
series, you'll find the rest of the components that you need to design a profitable
trading system.
About The Author
David Jenyns is recognized as the leading expert when it

comes to MetaStock and designing profitable trading systems.


His MetaStock website offers a huge free collection of trading

related tips and tricks. Gain free access now.

Click Here ==> <a href="http://www.meta-formula.com/subscribe"


target=new>http://www.meta-formula.com/subscribe</a>
<a href="mailto:[email protected]">articles@ultimate-trading-
systems.com</a>
This article was posted on March 01, 2006
ZZZZZZ

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