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Using Initial Stop Methods

In his article "Using Initial Stop Methods", Sylvain Vervoort has demonstrated how it is important to consider a warning signal and set the initial stop at the right time to avoid getting stopped out by the normal noise of the market.

Using the Function Builder, you create the PercentTrailingStop function for a fixed-percentage trailing-stop value on the closing price:

function (PercLoss:numeric=14):Numeric;
var
perc:=PercLoss;
loss:=C * perc / 100;
trail:=0;
end_var

if HISTORYSIZE>0 then begin

if C > this\1\AND C\1\ > this\1\  
then return Max(this\1\,C-loss);

if C < this\1\ANDC\1\< this\1\ 
then return Min(this\1\,C+loss);

if C>this\1\ then return C-loss;
end;
return C+loss;

Then you specify the strategy rules in Tradecision's Strategy Builder:

Entry Long:
if Date() = 080102 then return true;
return false;

Exit Long:
return CrossBelow(PercentTrailingStop(14),C);

Entry Short:
if Date() = 081201 then return true;
return false;

Exit Short:
return CrossAbove(PercentTrailingStop(14),C);
You need to enter the starting date manually as it was mentioned in the article. To define Date(), use a numeric value in YYMMDD format. Date returns 080102 if the day is January 2nd, 2008.


Download to import into Tradecision.

How to use this indicator in Tradecision:
  1. Click Download.
  2. Save this indicator in a safe location on your hard drive.
  3. Open Tradecision and in the Tools menu click Indicator Builder.
  4. In the Indicator Builder dialog, click Import, locate the saved file and then click OK.
The indicator will be added to the Custom Indicators list.
 
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