December 1999
TRADERS' TIPS 

Here is this month's selection of Traders' Tips, contributed by various developers of technical analysis software to help readers more easily implement some of the strategies presented in this issue.

You can copy these formulas and programs for easy use in your spreadsheet or analysis software. Simply "select" the desired text by highlighting as you would in any word processing program, then use your standard key command for copy or choose "copy" from the browser menu. The copied text can then be "pasted" into any open spreadsheet or other software by selecting an insertion point and executing a paste command. By toggling back and forth between an application window and the open Web page, data can be transferred with ease.
 

This month's tips include formulas and programs for:
 
 
RADARSCREEN
METASTOCK
NEUROSHELL TRADER
TECHNIFILTER PLUS
WAVEWI$E MARKET SPREADSHEET

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RADARSCREEN

In Rudy Teseo's "Candlestick Filtering" in this issue, Teseo looks for specific candlestick patterns that are confirmed by two indicators. Based on that concept, I have created a RadarScreen indicator that will allow you to instantly evaluate all the symbols in a RadarScreen window for the setup criteria that was described in the article. In addition, using the sorting feature in RadarScreen, you can continuously be aware of exactly which symbols are meeting the setup criteria throughout the day, both visually and through alert messages.

The RadarScreen indicator evaluates all the symbols in a RadarScreen window for the candlestick patterns and the confirming indicators. Once a candlestick pattern has been identified, the name of the pattern is displayed in the cell. If a pattern is identified and confirmed by the momentum indicator and RSI, as described in the article, the cell will be colored green. Thus, when a complete setup exists, consisting of a candlestick pattern that is confirmed by the RSI and momentum indicators, the name of the pattern will be displayed in the cell and the cell will be colored green. When there are no patterns or confirmed setups, the following character combination will appear in the cell ": || :", just to indicate that the indicator is active. Please note that this RadarScreen indicator will not display anything if applied to a chart, since it is only plotting text values.

Below is the EasyLanguage code used to create the RadarScreen indicator for candlestick filtering. The EasyLanguage code would be entered into the EasyLanguage PowerEditor as follows: 




Name: S&C Candlesticks
Type: Indicator

Inputs: CSLength(5), Tail(2), Length(14), LowerRSI(50), UpperRSI(70);
Variables: BE(False), MS(False), Hmr(False), MomVal(0), RSIVal(0), Pattern(False);

BE = BullishEngulfing(CSLength);
MS = MorningStar(CSLength);
Hmr = Hammer(CSLength, Tail);
MomVal = Momentum(Close, Length);
RSIVal = RSI(Close, Length);

If BE OR MS OR Hmr Then Begin
        If BE Then
                Plot1("BullEngulf", "CSPattern");
        If MS Then
                Plot1("MorningStar", "CSPattern");
        If Hmr Then
                Plot1("Hammer", "CSPattern");
        Pattern = True;
End
Else Begin
        Plot1(": || :", "CSPattern", DarkRed, default);
        Pattern = False;
End;

If Pattern AND MomVal > 0 AND RSIVal >= LowerRSI AND 
RSIVal <= UpperRSI Then Begin
        SetPlotBGColor(1, Green);
        Alert("Confirmed Candlestick Pattern on "+GetSymbolName);
End;
The indicator should be enabled for RadarScreen only and the grid style should be set to text.

This indicator can also be used as a template for creating other RadarScreen indicators that look for bearish setups or exit setups.

This EasyLanguage is also available from Omega Research's Website. The name of the file is Candlestick.ELS. Please note: This indicator is designed to be used exclusively in RadarScreen.

-- Gaston Sanchez, Omega Research Inc.

800 422-8587, 305 270-1095
https://www.omegaresearch.com
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METASTOCK

This month, in "Candlestick Filtering," Rudy Teseo describes how to use confirming indicators on candlestick charts for buy and sell signals. To recreate the candlestick-filtering system in MetaStock 6.52 or higher, select System Tester from the Tools menu, click New, and enter the following code.
  



Name: Candlestick Filtering
                
Enter long:
        Enter := (EngulfingBull() OR MorningStar() OR Hammer()) AND MO(14)>0 AND RSI(14)>50 AND RSI(14)<70;

        Ref(Enter,-1) AND H>Ref(H,-1)

Close long:
        Exit := EngulfingBull() OR EveningStar() OR DarkCloud() OR RSI(14)<50 OR MO(14)<0;
                
        Ref(Exit,-1) AND L>Ref(L,-1)


Click OK, then click "options." On the Testing page under "trade price," set the entry price to high and the delay to zero. Set the exit price to low and set the delay to zero.

Also in this issue, Stéphane Reverre describes a close-to-close gap-trading system in his article, "Trade Against The Gap." To recreate this gap-trading system in MetaStock 6.52 or higher, select "system tester" from the Tools menu, click New, and enter the following code:
  




Name: Trade Against the Gap

Enter long:     
        GapLong := 3;
        GapShort := 3;
        Gap := 100*(CLOSE-Ref(CLOSE,-1))/Ref(CLOSE,-1);

        Gap <= -GapLong

Close long:     
        GapLong := 3;
        GapShort := 3;
        Gap := 100*(CLOSE-Ref(CLOSE,-1))/Ref(CLOSE,-1);

        BarsSince(Gap <= -GapLong) = 1

Enter short:
        GapLong := 3;
        GapShort := 3;
        Gap := 100*(CLOSE-Ref(CLOSE,-1))/Ref(CLOSE,-1);

        Gap >= GapShort

Close short:
        GapLong := 3;
        GapShort := 3;
        Gap := 100*(CLOSE-Ref(CLOSE,-1))/Ref(CLOSE,-1);

        BarsSince(Gap >= GapShort) = 2


 Click OK, then click "options." On the Testing page under "trade price," set both the entry and exit price to close and set both delays to zero.

--Cheryl Elton, Equis International, Inc.

https://www.equis.com
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NEUROSHELL TRADER

The candlestick patterns, momentum indicator, and RSI used by Rudy Teseo in "Candlestick Filtering" are all included in the 800-plus technical indicators built into the NeuroShell Trader software. They can easily be combined into a trading system using NeuroShell Trader's Trading Strategy Wizard.

To implement the candlestick filtering system described by Teseo, select "New trading strategyÉ" from the Insert menu and enter the following entry/exit conditions in the appropriate locations of the Trading Strategy Wizard (Figures 1 and 2):

FIGURE 2: NEUROSHELL TRADER. Here's the long exit screen of the Trading Strategy Wizard for the candlestick filtering system in NeuroShell Trader.


Generate a buy long stop order if all of the following are true:
  




OR3 ( Engulfing Pattern Bullish, Morning Star, Hammer )
        A>B ( Momentum(Close,14), 0 )
        A<B<C ( 50, RSI(Close,14), 70 )

        Stop Price: Add2(High, 1)

Generate a sell long stop order if one of the following are true:
        Engulfing Pattern Bearish
        Evening Star
        Dark Cloud Cover
        A<B( RSI(Close,14), 50 )
        A<B ( Momentum(Close,14), 0 )

        Stop Price: Sub(Low, 1)


If you have NeuroShell Trader Professional, you can also choose whether the system parameters should be optimized. After backtesting the trading strategy, use the "detailed analysis É" button to view the backtest and trade-by-trade statistics for this system.

--Marge Sherald, Ward Systems Group, Inc.

301 662-7950, sales@wardsystems.com
https://www.neuroshell.com


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TECHNIFILTER PLUS

Here is a TechniFilter Plus trading strategy that implements Rudy Teseo's candlestick filtering. The candlestick formulas used are from TechniFilter Plus' formula library. All the formulas have been offset by one day to handle trading at tomorrow's prices from the signal generated today. This is equivalent to trading at today's prices based on signals generated yesterday. The two engulfing formulas also have a term added to pick whether the pattern is bearish or bullish.
  



Candlestick Filtering Strategy
NAME: CSFilter
TEST TYPE: 
DATE RANGE: all
POSITION LIMIT: 1

FORMULAS----------------------------------
[1] Date
[2] Cs_BullEnguf
        ( ((C%O)>TY1)*((C#O)Y1>(C#O)) * (C>O) )Y1
[3] Cs_MStar(1)
        ( (O>(C+&1))Y2*((C-O)Y1U0<&1)*(CY2>(C%O)Y1)*
        (O>(C%O)Y1)*(C>(O+&1)) )Y1
[4] Cs_Hammr(1)
        ( (&1>(C-O)U0)*(((C#O)-L)>((C-O)U0*2))*(H<(C%O)+
        0.03)*(L<LY1N3) )Y1
[5] Momentum(14)
        ( C/CY&1 )Y1
[6] RSI(14, 50 ,70)
        [1]: CG&1Y1
        [2]: ([1]>&2) & ([1]<&3)
[7] BuyPrice
        HY1 + 1
[8] SellPrice
        LY1 + 1
[9] High
        H
[10] Low
        L
        [11] CS_BearEnguf
        ( ((C%O)>TY1)*((C#O)Y1>(C#O)) * (C<O) )Y1
[12] Cs_evng(1)
        ( (O>(C+&1))Y2*((C-O)Y1U0<&1)*((C#O)Y1>CY2)*
        (O<(C#O)Y1)*(C<(O-&1)) )Y1
[13] Cs_dkcc(.25,50)
        ( (C>=O+&1)Y1 * (O>HY1) * (C<OY1) * ((CY1-C)>(&2/100*(C-O)Y1)) * ((C- 
        L)<&1) )Y1
[14] RSI(14,50)
        (CG&1 < &2 )Y1

RULES----------------------------------
r1: EnterLong
        buy long 1 on [7]
        at signal: Long ( [2] ^ [3] ^ [4] ) & ( [5]>1) & [6] & ( [9]>=[7] ) 
r2: ExitLong
        sell long 1 on [8]
        at signal: Exit ( [11] ^ [12] ^ [13] ^ [14] ^ ([5]<1) ) & ([10]<[8])


Next, here is a TechniFilter Plus trading strategy that implements Stéphane Reverre's close-to-close gap-trading strategy presented this month in "Trade Against The Gap."

Formula 2 is the percent change. Rule 1 enters a long position when the percent change is less than minus 3. Rule 2 exits this position one day later. Rule 3 enters a short position when the percent change is larger than 3. Rule 4 exits the short position two days later.
  




Trade Into the Gap Strategy
NAME: tradegap
TEST TYPE: stock
DATE RANGE: all
POSITION LIMIT: none

FORMULAS----------------------------------
[1] Date
[2] GapPct
        100* (C-CY1) / CY1

RULES----------------------------------
r1:     EnterLong
        buy long 1 on Close
        at signal: GapDown      [2] < -3 & Shares = 0
r2:     ExitLong
        sell long 1 on Close
        at signal: Hold1        CurrentIndex = EntryIndex + 1
r3:     EnterShort
        open short 1 on Close
        at signal: GapUp        [2] > 3 & Shares = 0
r4:     ExitShort
        cover short 1 on Close
        at signal: Hold2        CurrentIndex = EntryIndex + 2


Visit RTR's Website to download these strategies as well as program updates. Release 8.3 is now available for download.

--Clay Burch, RTR Software

919 510-0608, rtrsoft@aol.com
https://www.rtrsoftware.com
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WAVE WI$E MARKET SPREADSHEET

The following Wave Wi$e formulas show how to compute Stéphane Reverre's gap-trading system presented in this issue in "Trade Against The Gap."
  



A:      DATE    @TC2000(C:\TC2000\DATA,GE,GENERAL ELECTRIC CO,DB)
B:      HIGH    
C:      LOW     
D:      CLOSE   
E:      OPEN    
F:      VOL     
G: 
H:      Bars    1
I:      GapPcnt 100*(OPEN - CLOSE[-1]) / CLOSE[-1]
J:      UpPcnt  1
K:      DnPcnt  -1
L:      Longs   @SIGNAL2(CLOSE,BUY,GAPPCNT>UPPCNT,OPEN,
        BARS=1 | @SIGEROW()>=BARS,CLOSE)
M:
N:      Profit_Lg       @PROFIT(L,M,LONG)
O:      Shorts  @SIGNAL2(CLOSE,SELL,GAPPCNT<=DNPCNT,OPEN,
        BARS=1 | @SIGEROW()>=BARS,CLOSE)
P: 
Q:      Profit_Sh       @PROFIT(O,P,SHORT)
R:      Total   PROFIT_LG + PROFIT_SH
==========End Formulas
--Peter Di Girolamo, Jerome Technology

908 369-7503, jtiware@aol.com
https://members.aol.com/jtiware
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All rights reserved. © Copyright 1999, Technical Analysis, Inc.
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