METASTOCK: MOVING AVERAGE PULLBACKS

Steve Palmquist's article, "Trading Moving Average Pullbacks," introduces his moving average pullback system (MAPS). An exploration to search for these signals can be created in MetaStock with the following steps:

1. Select Tools > The Explorer.
2. Click New to open the Exploration Editor.
3. Type a name for the Exploration.
4. Select the Filter tab, which is in the middle on the right-hand side.
5. Click in the larger window and type in the following formula:

LLV(C,5)>Ref(HHV(C,20),-20) AND
Sum(C<Mov(C,30,S),30)=0 AND
((C-Mov(C,30,S))<(0.015*C))

6. Click OK to close the editor.

The securities found by this exploration will be possible candidates for MAPS trades. The entry rules say to buy tomorrow if the security trades above the current day's high.

A system test for MAPS can be created as follows:

1. Select Tools > the Enhanced System Tester.
2. Click New.
3. Enter a name for the system.
4. Select the Buy Order tab and enter the following formula:

setup:=LLV(C,5)>Ref(HHV(C,20),-20) AND
Sum(C<Mov(C,30,S),30)=0 AND
((C-Mov(C,30,S))<(0.015*C));
Ref(setup,-1) AND H>Ref(H,-1)

5. Select the Sell Order tab and enter this formula:

Simulation.CurrentPositionAge=3

The above system uses a function for the sell condition that is only available in MetaStock version 8.0 or later. If you are using a version of MetaStock earlier than 8.0, then replace step 5 above with the following steps:

1. Click the Stops button.
2. In the Stops window, select the Inactivity tab.
3. Set the Positions to "Long" and the Method to "Percent."
4. Set the Minimum Change to "9999."
5. Set the Periods to "3."
6. Click OK to close the Stops window.

--William Golson
Equis Internationa