MS Setup Guide - MRS 2.1
Contents
1. EX EN ti NCLU S ANY DIRE TIAL DA DING AND F HALL OCK FO RUM CREW AS IS the following Forum Crew AND ANY BU ITNI T NOT LIMITE ESS FOR A PA T D TO RTICULA T H HI R THE METASTOCK CT AGI OR CONS URE R PECIA NOT LI O PROC OF S LOSS OF USE DATA O ROFITS O ED AND ON ANY THEORY HOW R CA STRICT LIABILITY OR TORT INCLU UT OF THE ITE EN D F EV UBSTIT R BUSIN DING N G USE OF ARISING IN ANY WAY O OF THE POSSIBILITY OF SUCH DAMAG Pl ab B UT ES GOO INDIRECT INCLUDING INCI FORUM CR DENTAL BUT Pl W OR DS OR S ERVIC ES OF LIABILITY ESS INTERR UPTION WHETHER IN CONTRACT EGLIG F ENCE OR OTH HIS SOFTWARE ERWIS E F EVEN r IF ADVISI Pl2. leaving the existing date in the First Dates to adjust box Click OK When you close the window choose yes to save the changes Further information on the analytical methods and trader psychology can be found in Advance Cycle Trading TECHNICAL SUPPORT Limited technical support is provided for getting the templates loaded and working or for reporting problems with the materials sent Please first use the E mail address given below and then we can determine if a direct phone consultation is in order Fee consulting help is available to those who may need extra help getting familiar with the use and application of the system Please contact the developer of the MetaStock plug in version Dennis Lipter at Blackcat54 verizon net or telephone 347 565 9273 For on going assistance with interpretation and application of the indicators you can contact Al Gietzen at the e mail address or phone number given at the top of the page There can be no assurance or guarantee that trading with this system will be successful Past or simulated results are not necessarily indicative of future results and although potential gains can be substantial the risk of loss can also be high You should carefully consider whether trading is suitable for you Appendix Universal Reactivity Template Applied to Wheat MetaStock Layout WHEAT COMPO ept 10 WU0 Bile Edit View Insert Format Tools Window Help OSE SR BE amp R Braheactvyssoy v
3. f 8 MN kH 1X BNBRS ept 10 2 WU ni iT CO MPOSITE Sep pt 10 ag mla 2 Dt 00 gt 8 Lu a D 00 gt Blix For Help press F1 07 13 2010 770 734 8 18 NUM Forum dll COPYRIGHT Copyright c 2005 The MetaStock Forum Crew All rights reserved ALVentures Redistribution and use in source and binary forms Le 2 modification are met Redistributions of this notice list Redistributions in this notice list the documentation distribution acknowledgment This product includes software devel http forum equis com AL Ventures cox net of conditions and the foll of conditions and the foll owing disc 760 630 3555 with or without are permitted provided that the following conditions source code must retain the above copyright aimer binary form must reproduce the above owing disc copyright aimer in and or other materials provided with Redistributions of any form whatsoever must retain the loped by MetaStock HE HIS SOFTWARE IS PROVIDED BY ESSED OR IMPLIED WARRANTIES Bi G ME I EXPR AS IMPLII Pl R E L D WARRANTIES OF MERCHANTABI p F Y G RE F aE ED iN PURPOSE ARE DISCLAIM IN NO EV ITS CONTRIBUTORS BE E FOR SP EMPLARY EQU IB IABL
4. on the Short Cycle Reactivity chart CONTRACT ROLLOVERS AND CYCLE LENGTHS If you wish to maintain your own back adjusted continuous contract you can use features built into MetaStock Basically you will join two contracts by copying data between two data sheets Refer to the section in your manual on moving and copying data or look in the Data Move section in the online manual Open data sheets for both the new and old contracts Choose a rollover date and calculate the difference in the midpoint price between the two data sets on that day Note the date in the first date window of the new contract Highlight select the price data columns in the old contract from that date down through and including the selected rollover date Copy the highlighted data from the old contract and paste it into the new data sheet be sure to place the cursor in the open price column on the date you started with in the old contract Select the new data sheet window and from the adjust menu select manual In the Manual Adjust box under the field column select open high low and close boxes Now select either add or subtract in the operation boxes selecting add if the new contract prices on the rollover date are higher than the old or subtract if they are lower Enter the value that you calculated as the difference between the midpoints in the Factor boxes and enter your selected rollover date in the Last dates to adjust box
5. so there will be trade signals in an opposite direction prior to the trends crossing zero The chart in the lower right hand corner is the Short Term Reactivity which acts as a trigger for generating trade signals A trade signal trigger is generated when the blue data point crosses over the smoothed red indicator line The trade signal trigger is further tested by the intermediate and longer term trends before being plotted as a trade arrow In a choppy market it is likely that wins and losses will roughly offset possibly with net loss but in any substantial move the profits will accumulate Back testing of data for the previous years 2007 and 2008 showed exceptional even phenomenal profit potential However it can be argued that the kinds of huge trends that occurred in those two years are not representative Nonetheless handling the trends with such success is certainly a positive testimonial Trading 12 different commodities for 2009 during which there were some periods of whipsaw still showed excellent profit overall Further details are given at www marketreactivity com SUMMARY OF BASIC TRADING RULES 1 Enter the trade on the day and in the direction indicated on the chart Buy and Buy Stop signals are plotted as green arrows below the price bar Sell and Sell Stop Signals are plotted as red arrows above the price bar If you place the mouse over the arrow a tool tip will identify the signal type Penetration of a stop genera
6. ALVentures Al Ventures cox net 760 630 5555 NEW MARKET REACTIVITY SYSTEM 2 1 for MetaStock In Version 2 1 the methodology has been streamlined and adapted for application to a wide variety of trading instruments and time frames Back testing has shown it to be equally effective as the version 2 0 tailored for each commodity Installation and Setup Guide Components The setup file setup exe is needed to install the Market Reactivity System in MetaStock The setup file is a self extracting self installing program that contains the following files 1 MS11FORM DTA custom formula file 2 Forum dll Copyright 2005 The MetaStock Forum Crew 3 MS11EXPT DTA expert adviser 4 MS11PRFT DTA system test for back testing 5 Universal reactivity sv mwt template These files are further described as gt The Custom Indicator file MS11Form DTA contains all of the necessary Indicators for the market Reactivity System All the Indicators have a prefix of ag or which automatically groups them together at or near the top of the Custom Indicator List in MetaStock gt The Forum dil file extends the capability of the MetaStock function set and is necessary to successfully execute the Market Reactivity System in MetaStock Many of the custom indicators will not work without the Forum dll file gt The MS11EXPT DTA contains the Expert and is called upon and plotted by the Template The Expert is what generates t
7. e future you will open the Wheat Layout listed as Wheat mwl to view the Wheat Market Reactivity Chart The essential information for trading is displayed on the price chart including the buy and sell signals and the stop loss points ALVentures Al Ventures cox net 760 630 5555 Note See appendix for a screen capture of the Universal Reactivity Template applied to a Wheat Contract Data Continuous Contracts A word about the data the recommended data that which comes with the software is the combined session data floor electronic The HIGH LOW and CLOSE are self explanatory The volume and open interest OI are the TOTAL for all contracts The Volume is in thousands When entering data during the session or end of day if you don t yet have the actual volume always enter an estimated value for VOL Although you can apply the Reactivity Indicator to any individual contract data there are cases where price variations early in the contracts life may be small compared to more recent data as it becomes the lead contract This can lead to some distortions in the indicators particularly those for the longer cycle lengths For these cycles the exponential averages used in the analysis may not react fast enough to reach equilibrium The way to avoid this problem is to use continuous contract data Typically data services provide such data A back adjusted continuous contract in which the back contract has b
8. een adjusted up or down to match the new contract will work just fine Keep in mind that we always use the Total Volume and Total Open Interest in the data series If you wish to generate your own continuous contract using MetaStock see the procedure given below under CONTRACT ROLLOVERS AND CYCLE LENGTHS STRATEGY AND USE OF THE CHARTS All that is essential for profitable trading at the first level is displayed on the PRICE chart There are occasions where a trade may be made based on information given on the other charts as discussed further below The model is set up to be quite aggressive in building a position in the direction of a trend Intermediate and longer term trend information is determined by a unique method which can be called inverse detrending The method uses an intermediate and a long term trend computing trades in the direction of the intermediate term but filtering by the long term to take full advantage of a strong longer term trend and avoiding trading against a trend Trades are triggered in the appropriate direction based on the short term cyclic behavior With some exceptions the strategy is to be in the market all the time either long or short The basic trade unit of contracts is taken at each signal adding if going in the same direction and closing and reversing to one unit in the other direction with a signal in the other direction Note The Expert Adviser has an option to highlight a bar
9. he trade signals and stop penetration alerts The Expert will be found listed in the Expert Adviser as Universal Reactivity System gt The MS11PRFT DTA contains a Back testing System you will find listed as Universal reactivity System in the Systems window of the Enhanced System Tester The Back tester due to limitations of MetaStock will only work with this system as a Non Points Only test Trade signal quantity price and time of execution are calculated and plotted correctly but for commodities the statistics are not useable due to the Non Points Only nature of the test Testing stocks should not be a problem gt The Template Universal reactivity sv mwt is located in the C Program Files Equis MetaStock Charts Templates folder The Template calls upon the appropriate Custom Indicators and Expert to create a layout displaying all the necessary indicators and trade signals Installation To start the installation With or without MetaStock running double click setup exe This will initiate an auto install process that installs Templates Experts and DLLs in the following locations C Program Files Equis MetaStock Charts Templates C Program Files Equis MetaStock EXPERTS C Program Files Equis MetaStock External Function DLLs Since the template is the master key that puts together all the pieces of the trading system it is suggested you make a backup copy of it at this point The custom indicators are also in
10. in yellow when a stop is penetrated You can enable that option in the Highlights tab in the Expert Adviser If you prefer under the Alerts tab you can enable a stop penetration alert in addition to or in place of the bar highlight The signals for the trades appear on the PRICE chart a red arrow above the prices indicating Sell and a green arrow below the prices indicating Buy The signals are generated in the Expert Adviser under the Symbols tab The most recent additions to a position in one direction prior to a trend change are likely to have a lower probability of being profitable As there is no way of knowing in advance how strong or how long a trend may be making these trades is a tradeoff between the potential profit of a continuing trend vs the potential of some loss as the market changes direction The most aggressive approach which pays off nicely in any substantial trend is to take all the indicated trades A more conservative approach is to take just the first 2 or three in a given direction if there are at least that many These have the highest probability of being profitable The second chart plotted in a pane above the price chart is a depiction of intermediate and longer term trends On this chart it is all about crossing the zero line Trends below zero indicate a down trend values above zero indicate an up trend and the magnitude is indicative of the strength of the trend The indicated trends do lag a bit
11. stalled and can be viewed in the MetaStock Formula Builder or Indicator Quicklist Once the install is complete you are ready to apply the Market Reactivity System in MetaStock Setup Since the Market Reactivity System for MetaStock makes extensive use of templates and layouts it might be helpful to study the chapters covering them in the MetaStock user manual This description here will use Wheat as an example The procedure is the same for any other instrument Start MetaStock and open a Wheat chart Right click on an empty part of the chart and select Apply Template from the menu which opens an Apply Template dialog box Check the Replace existing chart box Select Wheat 1 mwt and click Open This plots a Market Reactivity System 2 page layout showing all the indicators and trade signals as shown in Wheat Template in the Appendix If necessary to scale the layout to fit your screen go to Window menu and select Column If the page with the price plot flips over to the right side save the layout and then open the layout and go to Window Column command to flip the price plot back to the left side Save the layout this time as a Template replacing the original Template with the new scaled one and then save the layout To save the layout go to File Save As and in the Save As dialog box choose Layout for the Save as type and give the file a name and location The Template is used only once to initially create the layout In th
12. tes a trade reversal arrow only when there is a prior trade in the opposite direction ADDITIONAL TIPS e Note that for end of day data the day generally begins the previous evening Eastern Time and continues until the following afternoon If entering data during a session there is generally questionable validity to any signal generated prior to about two hours into the day s floor session Only a HIGH LOW and VOL are needed for the analysis but entering the current price as CLOSE is a good idea to verify a signal ALVentures Al Ventures cox net 760 630 5555 before entering a trade If you enter a trade somewhere mid session and the signal disappears when the final data is entered it s advisable to close the trade Back trading history indicates that executing the trade at the closing price reduces the overall profitability by 15 20 over getting the trade at the daily midpoint The use of limit orders to get a good fill during the session can be helpful e Following a period of relative strong trend the logic may miss the most optimal reversing point and pick up the trade at the next short cycle turn In this case it can be helpful to watch for divergence of the short cycle with price either top or bottom depending on market direction accompanied by a corresponding divergence in the Midpoint Money Flow indicator If the trends are heading toward zero then the trigger for the trade is the data point crossing the smoothed line
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