Example on how, with Insider 3000 and its programming language, it is possible to create a trading system like 1-2-3- High or Low. The version of 1-2-3- is ideal, given the didactic scope of the example. Try to modify it, adding other rules, stop-loss, etc.

Description:

This Trading System is based on the counting of a certain number of bars, in this case exactly 3+1.

The selling signal is fired when:

• the first indicates a new relative max after a positive trend

• the second has a max and a min below the one of the first bar.

• The third retrace the height between the max from the first and the min of the second, and has a max between 1/3 and 2/3 of this height. In addition has the min which is greater or equal to the of the second bar.

• The forth bar is the confirmation one, the one that trigger the Short signal indicating a minimum which is less than the one of bar number 2.

The buy signal is fired when:

• the first indicates a new relative min after a negative trend

• the second has a max and a min above the one of the first bar.

• The third retrace the height between the min from the first and the max of the second, and has a min between 1/3 and 2/3 of this height. In addition has the max which is less than or equal to the one of the second bar.

• The forth bar is the confirmation one, the one that triggers the Long signal indicating a maximum which is more than the one of bar number 2.

There are two very important things to note:

1. The bar sequence does not have to be necessarily continuous, in the sense that the bar 2 does not have to be just after the bar 1. Or the bar 3 can also be immediately follow the bar 2, and so on, also for the others. In this example, we have chosen and ideal situation in which the first 3 bars are consecutive, and only the bar 4 (confirmation bar) has a free position.

2. Also, as you might have noticed there is no reference to opening and closing data. The data used is the one regarding minimum and max values on every period.

The stop-loss is respectively fix to:

1. long positions if the closing data of a certain period is less than the Simple Moving Average

2. short positions if the closing data of a certain period is greater than the Simple Moving Average

To optimize the trading system we inserted 2 Options, common to all modules, therefore they can be used in any module:

• OptTrendPeriods => is the number of periods on which calculate the trend slope.

• OptMoveAvStop => is the number of periods on which calculate the Moving Average for the stop-loss

Of course, any other operation can be added in order to optimise other parameters during the test phase. But do not add too many. Testing time can increase tremendously.

NB Remember than the options are used to test the Trading System and the outcome will tell which values in the paste have obtained best results.

Insert on the right box in the Trading systems management window (using copy and paste), the code shown here below

Common Options

'These are the values to optimize using the Test function Option OptTrendPeriods(10, 20, 1) Option OptMoveAvStop(5, 20, 1)

Enter Long

'Variables at module level Dim lPeriodNumberFound As Numeric = 0 Dim dTmp As Numeric Dim pdLowBar1 As Numeric Dim pdHighBar1 As Numeric Dim pdLowBar2 As Numeric Dim pdHighBar2 As Numeric Dim pdLowBar3 As Numeric Dim pdHighBar3 As Numeric '----------------------------- Function Main() Dim bSignal As Boolean = False Dim dLevelMin As Numeric Dim dLevelMax As Numeric Dim dLevel As Numeric Dim bCancel As Boolean Error Errore bCancel = False Select Case lPeriodNumberFound Case 0 If (Trendforce(OptTrendPeriods) < - 1) Then 'Only if the trend is Down/Hard Down we can see if we are in the first period If (Low <= Min(Low, OptTrendPeriods)) Then 'we found your bar (meaningful minimum) lPeriodNumberFound = 1 pdLowBar1 = Low pdHighBar1 = High EndIf EndIf Case 1 'If we are here, the first bar has been already found, searching for the second 'The second bar must have a minimum value which is greater than 'the minimum of the previous bar, and a max value greater than 'the max value of the previous bar If (Low > Low( - 1)) Then If (High > High( - 1)) Then lPeriodNumberFound = 2 pdLowBar2 = Low pdHighBar2 = High EndIf EndIf 'If we do not find the second bar at first, cancel 'the possible signal. Go back to zero with the bar counting. 'For sake of simplicity here it is used an ideal 1-2-3, but 'you can modify it according with your actual needs. If (lPeriodNumberFound < 2) Then 'In this case the figure is cancelled bCancel = True Goto Prosegui EndIf Case 2 'If we are here, the second bar has been already found, searching for the third dLevel = (pdHighBar2 - pdLowBar1) If (dLevel < 0) Then Goto Errore EndIf dLevelMin = pdLowBar1 + dLevel * 34 / 100 dLevelMax = pdLowBar1 + dLevel * 67 / 100 If (Low <= dLevelMax) And (Low >= dLevelMin) And (High <= pdHighBar2) Then lPeriodNumberFound = 3 pdHighBar3 = High pdLowBar3 = Low Else bCancel = True Goto Prosegui EndIf Case 3 'Here we have to wait the confirmation bar. 'It can also be said that if the confirmation does not 'come up within N. periods, the figure is not valid. 'But, for now, we keep it simple. If (Low < pdLowBar3) Then bCancel = True Goto Prosegui EndIf If (High > pdHighBar2) Then 'Confirmation bar found lPeriodNumberFound = 0 bSignal = True EndIf Case Else lPeriodNumberFound = 0 Goto Errore EndSelect Prosegui: If (bCancel = True) Then If (Low < pdLowBar1) Then lPeriodNumberFound = 1 pdLowBar1 = Low pdHighBar1 = High Else lPeriodNumberFound = 0 EndIf EndIF 'The keyword Return inside a Trading System, should always return a Boolean value (True or False) Return bSignal Errore: lPeriodNumberFound = 0 Return False EndFunction

Exit Long

Function Main() Dim bResult As Boolean Error Errore 'Stop-loss is triggered when the close is lesser than the 'simply Moving Average on OptMoveAvStop periods bResult = (Close < MoveAv(Close, OptMoveAvStop, "S")) 'The keyword Return inside a Trading System, should always return a Boolean value (True or False) Return bResult Errore: Return False EndFunction

Enter Short

'Variables at module level Dim lPeriodNumberFound As Numeric = 0 Dim dTmp As Numeric Dim pdLowBar1 As Numeric Dim pdHighBar1 As Numeric Dim pdLowBar2 As Numeric Dim pdHighBar2 As Numeric Dim pdLowBar3 As Numeric Dim pdHighBar3 As Numeric '---------------------------- Function Main() Dim bSignal As Boolean = False 'Boolean Variable with default value set to False Dim dLevelMin As Numeric Dim dLevelMax As Numeric Dim dLevel As Numeric Dim bCancel As Boolean Error Errore bCancel = False Select Case lPeriodNumberFound Case 0 If (Trendforce(OptTrendPeriods) > 1) Then 'Only if the trend is Up/Hard Up we can 'see if we are in the first period If (High >= Max(High, OptTrendPeriods)) Then 'we found your bar (meaningful maximum) lPeriodNumberFound = 1 pdLowBar1 = Low pdHighBar1 = High EndIf EndIf Case 1 'If we are here, the first bar has been already found 'searching for the second 'The second bar must have a maximum value which is lesser than 'the maximum of the previous bar, and a min value lesser than the min value of the previous bar If (Low < pdLowBar1) Then If (High < pdHighBar1) Then lPeriodNumberFound = 2 pdLowBar2 = Low pdHighBar2 = High EndIf EndIf 'If we do not find the second bar at first, cancel 'the possible signal. Go back to zero with the bar counting. 'For sake of simplicity here it is used an ideal 1-2-3, but 'you can modify it according with your actual needs. If (lPeriodNumberFound < 2) Then 'In this case the figure is cancelled bCancel = True Goto Prosegui EndIf Case 2 'If we are here, the second bar has been already found 'searching for the third dLevel = (pdHighBar1 - pdLowBar2) If (dLevel < 0) Then Goto Errore EndIf dLevelMin = pdHighBar1 - dLevel * 67 / 100 dLevelMax = pdHighBar1 - dLevel * 34 / 100 If (High <= dLevelMax) And (High >= dLevelMin) And (Low >= pdLowBar2) Then lPeriodNumberFound = 3 pdHighBar3 = High pdLowBar3 = Low Else bCancel = True Goto Prosegui EndIf Case 3 'Here we have to wait the confirmation bar. 'It can also be said that if the confirmation does 'not come up within N. periods, the figure is not valid. 'But, for now, we keep it simple. If (High > pdHighBar3) Then bCancel = True Goto Prosegui EndIf If (Low < pdLowBar2) Then 'Confirmation bar found lPeriodNumberFound = 0 bSignal = True EndIf Case Else lPeriodNumberFound = 0 Goto Errore EndSelect Prosegui: If (bCancel = True) then If (High > pdHighBar1) Then lPeriodNumberFound = 1 pdLowBar1 = Low pdHighBar1 = High Else lPeriodNumberFound = 0 EndIf EndIf 'The keyword Return inside a Trading System, should always return a Boolean value (True or False) Return bSignal Errore: lPeriodNumberFound = 0 Return False EndFunction

Exit Short

Function Main() Dim bResult As Boolean Error Errore 'Stop-loss is triggered when the close is greater than the 'Simply Moving Average on OptMoveAvStop periods bResult = (Close > MoveAv(Close, OptMoveAvStop, "S")) 'The keyword Return inside a Trading System, should always return a Boolean value (True or False) Return bResult Errore: Return False EndFunction