(e) Metastock: Whipsaw Situation

Hi Traderji,

if the market is not trending anymore most of the time it is the best decision to get out of the market and wait until the market starts trending again.

please let me know if u need more help.

Karsten

Hi Karsten,

Thanks for your response.

It is simple to say that get out of the market when market is not trending, when you see historical chart. But at the time when buy signal generates, how can we decide market is in non trending situation.

If we use 3barnetlong for buy signal, what is filter we use to sort out signal.

Regards,

Traderji

can you give me a chart example? I am not sure what you talking about, Traderij.
What is 3barnetlong?

normally it is like this: when u are long, then u want to see the market to move up and not hesitate. Then u know that ur timing is right and the market is doing what u expect.

@ traderji [#1]

You might want to look at a concept called equity-curve-trading

http://www.google.de/search?hl=de&client=opera&rls=de&hs=KZg&q=equity-curve-trading&btnG=Suche&meta=lr%3D

In short: you do take signals if you are on a winning streak and stop in a loosing streak. You could use a MA on your equity and if you fall below you stop taking system signals until you are "virtually" back above.

Also you could follow a rule sth like to stand aside after 3 loosers in a row. This builds on the idea of longer loosing streaks in whipsaw markets.

Ofcourse all this has problems too, if your loosing streaks are only short and you just stop following singals when they were good again and vv.

ANYWAY: To follow ANY plain-MA-system without further rules will sooner or later end in tears :-)

rgds hans

Hi Karsten,

3barnetlong is a trend formula find in this forum as below:

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L1: =ValueWhen (1, H>Ref (HHV (H, 13), - 1), L);
H1: =ValueWhen (1, L<Ref (LLV (L, 13), - 1), H);
L2: =If (Ref (L, - 1) <L1, Ref (L, - 1), If (Ref (L, - 2) <L1, Ref (L, - 2), If (Ref (L, - 3) <L1, Ref (L, - 3), If (Ref (L, - 4) <L1, Ref (L, - 4), If (Ref (L, - 5) <L1, Ref (L, - 5), If (Ref (L, - 6) <L1, Ref (L, - 6), If (Ref (L,- 7) <L1, Ref (L, - 7), If (Ref (L, - 8) <L1, Ref (L, - 8), If (Ref (L, - 9) <L1, Ref (L, - 9), If (Ref (L, - 10) <L1, Ref (L, - 10), If (Ref (L, - 11) <L1, Ref (L, - 11), If (Ref (L, - 12) <L1, Ref (L, - 12), Ref (L, - 13)))))))))))));
H2: =If (Ref (H, - 1) >H1, Ref (H, - 1), If (Ref (H, - 2) >H1, Ref (H, - 2), If (Ref (H, - 3) >H1, Ref (H, - 3), If (Ref (H, - 4) >H1, Ref (H, - 4), If (Ref (H, - 5) >H1, Ref (H, - 5), If (Ref (H, - 6) >H1, Ref (H, - 6), If (Ref (H,- 7) >H1, Ref (H, - 7), If (Ref (H, - 8) >H1, Ref (H, - 8), If (Ref (H, - 9) >H1, Ref (H, - 9), If (Ref (H, - 10) >H1, Ref (H, - 10), If (Ref (H, - 11) >H1, Ref (H, - 11), If (Ref (H, - 12) >H1, Ref (H, - 12), Ref (H, - 13)))))))))))));
L3: =If (Ref (L, - 2) <L2, Ref (L, - 2), If (Ref (L, - 3) <L2, Ref (L, - 3), If (Ref (L, - 4) <L2, Ref (L, - 4), If (Ref (L, - 5) <L2, Ref (L, - 5), If (Ref (L, - 6) <L2, Ref (L, - 6), If (Ref (L, - 7) <L2, Ref (L, - 7), If (Ref (L,- 8) <L2, Ref (L, - 8), If (Ref (L, - 9) <L2, Ref (L, - 9), If (Ref (L, - 10) <L2, Ref (L, - 10), If (Ref (L, - 11) <L2, Ref (L, - 11), If (Ref (L, - 12) <L2, Ref (L, - 12), If (Ref (L, - 13) <L2, Ref (L, - 13), Ref (L, - 14)))))))))))));
H3: =If (Ref (H, - 2) >H2, Ref (H, - 2), If (Ref (H, - 3) >H2, Ref (H, - 3), If (Ref (H, - 4) >H2, Ref (H, - 4), If (Ref (H, - 5) >H2, Ref (H, - 5), If (Ref (H, - 6) >H2, Ref (H, - 6), If (Ref (H, - 7) >H2, Ref (H, - 7), If (Ref (H,- 8) >H2, Ref (H, - 8), If (Ref (H, - 9) >H2, Ref (H, - 9), If (Ref (H, - 10) >H2, Ref (H, - 10), If (Ref (H, - 11) >H2, Ref (H, - 11), If (Ref (H, - 12) >H2, Ref (H, - 12), If (Ref (H, - 13) >H2, Ref (H, - 13), Ref (H, - 14)))))))))))));

Buy: =C>H3;
Sell: =C<L3;

--------------8----------------

Here I am attach a chart of IBM, in which I apply above formula and wants to sortout those signal which occurs in nontrending market or whipsaw situation.

http://img71.imageshack.us/my.php?image=ibmao2.jpg

Regards,

Traderji

Hi hans,

Thanks for your kind attention.

Is there any metastock code or expert available for equity curve trading.
If you have, please share with me.

Regards,

Traderji

@ traderji [#7]

I dont have Metastock.

You could EXPORT any systems trades into EXCEL and test rules there aswell.

rgds hans

@ he96 [#5]

In short: you do take signals if you are on a winning streak and stop in a loosing streak. You could use a MA on your equity and if you fall below you stop taking system signals until you are "virtually" back above.

or work with positionsize and equity curve, if MA cross equity give more size and vice versa

best greetings

roti

Anymore suggestion/strategy on whipsaw/non trending market.

@ traderji [#10]

sure - keep out of it ;-)

rgds hans