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Bull Fear/Bear Fear with DX System for Metastock
over 10 years ago

5 / 5 (Votes 1)
metastock, trading system

The system is a trend follower that appears to get you in at the early in a trend. If the
trend breaks down for any reason, the system seems to take you out with relatively little pain, and there is a relatively high percentage of losing trades (usually around 50%).

Therefore, the system seems to perform best on issues that are prone to make prolonged moves. The trick is to find those issues. I do admit that the system is not perfect; for instance, it is my belief that the exit could be improved on winners to preserve more profit. However, I’ve been unable to develop an alternative exit that improves the system return.

I’ve been trading this system myself for about a year and have had good results. Even in the April-September period when everything seemed to stall and move sideways, I was, at least able to hold my own and maintain my capital until the October break-always started to occur. For awhile, until I got bored with it, I phantom traded this system in the Yahoo Investment Challenge. I typically made about 20% a month using the system in that venue.

Optimize the time periods from 10 to 50 in increments of 1 while testing the DX from 5 to 30 in increments of 5 (you can do it in increments of 1 but it takes longer). Once the Optimal time period is determined in this manner, then retest with the determined optimal time period and the DX in increments of 1. Note that this system is intended to be a stop and reverse system and you can use it to go short as well if you’d like to.


Indicator / Formula

Copy & Paste Friendly

Enter the buy and sell rules in the system builder.

{Enter long:}

n :=opt2{Time periods};
BullFear := (HHV(HIGH,n) - LLV(HIGH,n))/2 + LLV(HIGH,n);
Cross(CLOSE,bullfear) AND
DX(10) > opt1

{Close long:}

n :=opt2{Time periods};
BearFear := (HHV(LOW,n) - LLV(LOW,n))/2 + LLV(LOW,n);
CLOSE < bearfear


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