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TraderNexus:AdvancedTrailingStopMetastockStopLossPlugin

TRADERNEXUS
ADVANCEDTRAILINGSTOP
IntroductionWhyhaveIdevelopedthis?ATRMultiplesTradeStagesExamplesFAQDisclaimerDownloads

INTRODUCTION
TheAdvancedTrailingStop,basedontheChandelierExitdevelopedbyChuckLeBeau,isvolatilitybased.Dr.VanK.TharpinhisbookTradeyour
waytoFinancialFreedomsays"volatilitystopsareamongthebeststopsyoucouldselect".I'vebeenusingthevolatilitystoptechniqueforafewyears
now.
UsingtheMetastockDeveloper'sKit,IdevelopedaIdevelopedaMetastockDLLbecausetheMetastockFormulaLanguagelackedasimplewayof
referencingpricesfromtheentrydayofthetrade.IfyoujustwanttodownloadtheDLL,scrolltothebottomofthispage.
Manytraderssetstopsaccordingtoafixed%movement.However,the%methodneedstobeadjustedaccordingtothevolatilityofthesecuritybeing
traded.Usingavolatilitybasedstopmeansthatyourstopautomaticallytakesaccountofthesecurity'svolatility.
Forexample,ifthesecurityhasahighvolatility,yourstopswillbeareasonabledistanceawayfromthepriceaction(togivethesecurityroomtomove
initsnormalintradaymovements).Ifasecurityhasalowvolatilitythenthestopwillberelativelyclosertothepriceaction.Ifthesecurity'svolatility
changeswhilstatradeisunderway,thestopswilladjustaccordingtothisvolatility.Theadvantagetothistypeofstopisthatitcanbeusedinany
market(bluechipstocks,speculativestocks,futures,indextrading,mutualfundsetc.)
TheAdvancedTrailingStophasthefollowingcomponents:
InitialStop,expressedintermstotheentryday(eg.Closingpriceless2ATRs)
TrailingProfitstop,calculatedoneachbarofthedayafterentry(eg.Highless3.5ATRs)
Optionally,youcanalsoincorporatethefollowingtypesofstops:
Breakevenstopthisiscalculatedontheentrydayandisimplementedwhenthestockpassesa"transitionpoint".(eg.Movemyinitialstopto
abreakevenstopwhenthepricecloses2ATRsabovemyentryprice).Ibelievethistransition/breakevenstopwaspartoftheoriginalTurtles
tradingtechnique.
PyramidPoints/TighteningStopstheTrailingProfitStopcanberecalculatedwhenthestockpassesfurthertransitionpoints.Ihavedefined
twosuchpoints.(eg.Whenthestockmovesmorethan4ATRsabovemyentryprice,changetoatrailingprofitstopthatistheHighless3
ATRs.Ifitreaches6ATRsabovemyentryprice,changetoatrailingprofitstopthatisthehighless2.5ATRs).ChuckLeBeautalksabout
thistighteningofthestopsinhisoriginalnewsletter.
Ifanyofyourstopsarehit,theStopLosslinewillcontinuetobedrawnacrossthescreen.Thisisgoodforyourpsychologicallyifyoucan'tgetoutofa
trade.It'llkeeptellingyoutogetout!Thelinewillnottrailthepriceanyfurther(itwillbeflat)justtoreemphasisethatyoushouldbeoutofthetrade.

WHYHAVEIDEVELOPEDTHIS?
It'ssomethingIuseinmyownpersonaltrading.DevelopinginVisualC++withtheMetastockDeveloper'sKitissomethingveryfewpeoplehavethe
skillstoperformandIthoughtI'dgivesomethingbacktotherestofthetradingcommunity.Perhapsyou'llalsoconsidersubscribingtoPremiumDataif
youwantreliableendofdaydata.
IdonotintendtoevercommercialisethispluginI'mhappyforanybodyandeverybodytouseitforfree.

ATRMULTIPLES
ByusinglogicalvaluesfortheATRmultiples,youcandefineyourtradingstyle.Forshorttermtrading,atrailingprofitstopof22.5ATRsisuseful.
Formediumlongtermtrading,atrailingprofitstopof34ATRsisuseful.

TRADESTAGES
TheAdvancedStopsystemalsoallowsyoutoplotabinaryindicatorthatwillindicatewhich"stage"ofthetradeyou'reon(veryusefulifyouwantto
createanexpertadvisor).
Thestagesare:
0Notinatrade
1Intrade,currentstopbeingusedisinitialstop,tradeisstillunderneathtransitionpointtobreakevenstop.
2Intrade,trailingprofitstopused
3Intrade,priceispastfirstpyramidpoint
4Intrade,priceispastsecondpyramidpoint
1Tradestoppedoutoninitialstop
2Tradestoppedoutontrailingprofitstop(orbreakevenstopifthisisbeingused)
3Tradestoppedoutonfirstpyramidtrailingprofitstop
4Tradestoppedoutonsecondpyramidtrailingprofitstop.
Thistradestagesystemisalsofantasticifyouaredevelopingtradingsystemswithveryspecificdefinedentrypoints.
CheckouttheStageLongandStageShortfunctions.

EXAMPLES
ThefollowingexamplesareproducedfromMetastockv8,usingstockandfuturesdatafromPremiumData.
Chartbelowshowsstandardtrailingprofitstop:

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ChartbelowshowstrailingprofitstoponsamestockbutwithadifferenttrailingprofitstopATRmultiple.

Thischartshowsthetrailingprofitstoponashorttrade.

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ThechartbelowshowsCrudeOil:

ThischartshowsCiscoonalongtradeusingthemoreadvancedPyramidtighteningstops.
Note:Imanuallydrewinthepointsmarked1,2,3&4,toshowthepyramidpointsalittlebetterforyou.

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TraderNexus:AdvancedTrailingStopMetastockStopLossPlugin

USAGE
Afterinstallation,aDLLfilecalledAdvancedStopisstoredinyourequis\metastock\externalformuladllsdirectory.TheAdvancedStopDLLhasfour
functionsthatcanbecalled:
StopLongthetrailingprofitstoponalongtrade
StopShortthetrailingprofitstoponashorttrade
StageLongthestageofthetradeinalongtrade
StageShortthestageofthetradeinashorttrade
Alloftheabovefunctionstakethefollowingparameters:
EntryConditionwhatcausesanentry(eg.aparticulardate,movingaveragecrossoveretc.)
InitialStopatEntryThestoppointwhenyouenterthetrade
TransitiontobreakevenstopThepriceatwhichyoutransitiontoabreakevenpoint(calculatedondayofentry)setthisto0ifyoudonotwantto
useabreakevenstop.
TrailingProfitStopThevalueofthetrailingprofitstop,calculatedoneachdayofthetrade.
FirstPyramidConditionThepriceatwhichyoutransitiontothefirstpyramidcondition(calculatedondayofentry).Setthisto0ifyoudonotwant
touseapyramid
TrailingProfitStopatFirstPyramidThevalueofthetrailingprofitstop,calculatedoneachdayofthetrade,afterthefirstpyramidpointhasbeen
signalled.Setto0ifyoudonotwanttousethis.
SecondPyramidConditionThepriceatwhichyoutransitiontothefirstpyramidcondition(calculatedondayofentry).Setthisto0ifyoudonot
wanttouseapyramid
TrailingProfitStopatSecondPyramidThevalueofthetrailingprofitstop,calculatedoneachdayofthetrade,afterthesecondpyramidpointhas
beensignalled.Setto0ifyoudonotwanttousethis.
Alloftheaboveseemscomplexatfirstsight!LuckilyI'veprovidedafewformulasthathelpyoutoplottheaboveonachart.

USAGEEXAMPLEPLOTATRAILINGPROFITSTOPFROMAGIVENDAYONWARDS
entryday:=Input("Dayofmonth",1,31,1)
entrymonth:=Input("Month",1,12,1)
entryyear:=Input("Year",1800,2020,2003)
entryprice:=Input("EntryPrice(leaveaszeroforcloseoftheday)",0,5000,0)
entryprice2:=If(entryprice>0,entryprice,C)
initatr:=Input("InitialstopATRmultiplier",0.1,6,2)
trailatr:=Input("TrailingstopATRmultiplierfromHigh",0.1,6,2.5)
entryfulldate:=(entryyear)+(entrymonth/12)+(entryday/365)
fulldate:=Year()+Month()/12+DayOfMonth()/365
entry:=entryfulldate>Ref(fulldate,1)ANDentryfulldate<=fulldate
ExtFml("AdvancedStop.StopLong",entry,entryprice2initatr*ATR(10),0,Htrailatr*ATR(10),0,0,0,0)
Usingtheabovecodeinaformulaallowsmetodragasimpleindicatorontothepricechart,inmuchthesamewaysasyouputamovingaverageon
thechart.
Afterdraggingtheindicatorontothechart,youwillsee:

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So,allyoudoisenterinthedateyouenteredthetrade,thepriceyouentered(or0fortheclosingprice)andthetwomultipliersfortheinitialstopand
trailingstop.Afterthis,thetrailingstopwillbeplottedonyourpricechartjustliketheexamplesabove.
Ihaveincludedafewmoreindicatorsthatcanbedraggedontothecharttoocheckoutthecodeinsidethemforfurtherdetails.
Trickusedabove:You'llnoticeIhavesomecodeintheretocalculatedatesetc.Ihaveusedalittletrickthatallowsthetrailingprofitstoplinetostillbe
plottedevenifyouputinaninvaliddate(eg.weekend).IfIdidn'tusethis,andaninvaliddatewasgiven,you'dhavean'invisible'indicatorwhichis
ratherdifficulttoremovefromyourchart.

FREQUENTLYASKEDQUESTIONS
Whattrailingstopvalues/multipliersshouldIusefortrading<XYZ>?
ThebeautyoftheaboveDLListhatyoucantryoutdifferentmultiplestosuityourpersonalstyleoftrading.Aggressiveshorttermtraderswillgenerally
uselowmultiplesandlongertermtraderswillusehighmultiples.
WhatentryconditionsshouldIuse?
Usetheentryconditionscontainedwithinyourwrittentradingplan.ThisMetastockPluginisusedforexitsnotforentries!
Iusedyourtrailingstopanditlostmemoney.
Firstly:I'llhappilyrefundthemoneyyoupaidmefortheAdvancedTrailingStop.Oh,that'sright,youdidn'tpayanything.
Secondly:Growup.Takeresponsibilityforyourowntradingdecisions.Donotusesomethingyoudon'tfullyunderstand.Thisisjustatooltoassist
traders,nottellthemwhattodo.
Thirdly:Youmustnothavereadthedisclaimerbelowandwhenyouinstalledtheplugin.
Areanyoftheindicatorspasswordprotected?
Noneofindicatorsarepasswordprotectedyoumayeditandmodifyittosuityourtradingstyle.
Ihaveastoplossmethodologythatdoesn'tuseATRs.CanIusethisDLLtoassistme?
Mostcertainlyyoucan.Theentiresystemisbasedontwotypesofconditions(a)conditionsrelativetotheentryprice(initialstop&pyramidpoints)
and(b)conditionsrelativetothecurrentday'sprice(trailingstops).ThesedonotneedtobeATRbased.
Sendyourquestionsto:advancedstop@tradernexus.com

KNOWNLIMITATIONS
Doesn'tplotinthefirstfewbarsofachart.FornewIPOsetc.youwillneedtowaituntiltheATRhasvalidvalues(eg.10dayATRrequires10daysof
chartinformationfirst).
PerhapsnotalimitationIntradaypricemovementsareignored.Thereforeifthecloseofthedaydoesn'tgopastyourstop,itstillconsidersthatyou
areinthetrade.

FEEDBACK
I'minterestedinyourfeedback.LetmeknowwhatyouthinkofthisMetastockaddinatadvancedstop@tradernexus.com

DISCLAIMER
Inthisdayandageoflitigation,everybodywantstoblamesomeoneelsewhenthingsdon'tgotoplan.
RichardDalenoranyassociateofhis,isnotpermittedtoprovidepersonalsecuritiesrecommendations.Thereforeanythingthatiseitherspoken,shown
orimpliedwithinthiswebsite,anydownloadedfiles,anylinkstoothersitesorcommunicationrelatedtothissitewillnotbetakenasaninvestment
recommendationsoradvice.
BeforemakinganinvestmentdecisiononthebasisofanyinformationreceivedfromthiswebsiteorsubsequentcommunicationswithRichardDaleor
hisassociates,Iwillconsiderwithorwithouttheassistanceofalicensedsecuritiesadviser,whethermyapplicationoftheinformationisappropriatein
lightofmyparticularinvestmentneeds,objectivesandfinancialcircumstances.
IunderstandandagreethatRichardDalenoranyassociateofhis,shallinnowaybeliabletomyselforanyoneelseforanylossorinjurycausedin
wholeorinpartthroughanyactivityrelatedtothiswebsite.
Inshort,Iguaranteethatyouwilllosemoneyinthemarket.Ifyoudonotlosemoneyinthemarketasaresultofthiswebsiteoranytoolsthatare
providedthengivesomeofittoacharity.

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DOWNLOADS
Beforeyoudownload,readthedisclaimerabove.Youmayonlydownloadthefollowingfilesifyouagreetothedisclaimer.
NowchoosewhichversionofMetastockyouown:
AdvancedTrailingStopv1.1forMetastockv8.Xorv9.Xorv10.x(156Kdownload)
AdvancedTrailingStopv1.1forMetastockv7.X(155Kdownload)
Note:IhavebeenadvisedthatAVGAntivirus6.0.777(FreeEdition)withVirusDatabase524(Releasedate14/10/2004)reportstheabovefilesas
containinga"TrojanHorsePSW.Bancban.2.1".TheabovefilesdoNOTcontainanytrojanhorse/spyware/viruses.Ifyouseethiserrormessage,
disableAVGwhileyou'reinstallingthepluginandturnitbackonagainaftewards.Also,IrecommendyoucontactGrisoftsotheycanfixtheirantivirus
definitions.
TheabovefileswillautomaticallyinstalltheAdvancedStopDLLintoMetastock,alongwiththefollowingIndicators:
RAD*ChanderlierStopLong
RAD*ChanderlierStopLongPyramid
RAD*ChanderlierStopLongWithTransition
RAD*ChanderlierStopShort
RAD*ChanderlierStopShortPyramid
RAD*ChanderlierStopShortWithTransition
MetaStockisaregisteredtrademarkofEquisInternational

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