Combining Statistical & Pattern Analysis, Shark-32 Formula for: MetaStock expert advisor

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Added: March 13, 2007

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The Shark exit signals don't appear to be all that good. In some cases, the sell signals provide good opportunities for short-selling, but the signals appear to be too few and far between to rely on them for sell signals for long trades. The Shark pattern occurs too infrequently, and there's no guarantee it'll occur when the trend reverses. With long trades, you'd have to look to other indicators, such as CCI, as you say, or maybe Parabolic SAR. You could use price breaking below certain moving averages, too -- or moving- average crossovers.

Seems like entry but no exits in Shark. maybe standard CCI(13) with 200 and -150 triggers.

The shark pattern signals, in the third window in the chart I sent, werereally just alerts showing that the shark pattern had occurred on those days.The shark system is based on the close rising above levels set when the shark pattern occurs. The levels are set by the high and low in the shark pattern, and the close must break through them within 25 days of the signal.

The shark pattern, in other words, isn't a buy or sell signal.

The buy signals were shown in the second window of the chart I sent. The windowis labeled "Shark buy signal." Also, the signals are marked by greenarrows over the price plot in the first window of the chart.

I didn't include sell signals in the chart I sent earlier today. In the case of MU, the sell signals weren't very good, to be honest.

The Shark system is really based on two separate events: the occurrence of the pattern and then the signal.

The pattern isn't the signal. The system gives a signal if and when the stock breaks above the high point in the pattern over the next 25 days. The high on the first day of the pattern sets that high point. It's like a resistance level, set by the highest point in the shark fin. Sometimes the stock doesn't break above it, so there's no signal.

The Shark pattern shows consolidation, which may indicate an expansion in price to come. But the breakout doesn't always occur.

If the stock breaks below the low point in the pattern, there's a sell signal.

The idea behind the system is: Look for a three-bar shark pattern, basedon progressively smaller ranges. It looks like a shark fin. Once that pattern appears, a level is set by the highest point in the fin, which is the high(-2). In the scan, I call that level "Shark high." To get a buy signal, the price has to close above that level within 25 days. If you want to plot "sharkhigh" over a chart with the price, you can do it with the "Buy OK" part of the Metastockformula by plotting this in the Expert Adviser:

Click the Trends tab and enter the following formulas in the Bullish and Bearish fields.

Shark - 32
Trends:

Bullish:

Mov(C,5,S)>Mov(C,20,S);

Bearish:

Mov(C,5,S)<Mov(C,20,S);

Click the Highlights tab, choose New, and enter "3rd Bar" in the Name field. Now change the color in the Color field to Blue. Finally, enter the following formula in the Condition field, and then choose OK.

Highlights

Name: "3rd Bar"
Color: Blue

Symmetry:=.28;
Apex:=(H+L)/2;
WB:=Ref(H,-2)-Ref(L,-2);
Shark:=If((H<Ref(H,-1) AND L>Ref(L,-1) AND Ref(H,-1)<Ref(H,-2) AND
Ref(L,-1)>Ref(L,-2))=1,If(Apex <= (Ref(H,-2)-(WB*Symmetry)) AND
Apex >= (Ref(L,-2)+(WB*Symmetry)) ,1,0),0);
Shark;

Name: "2nd Bar"
Color: Blue

Symmetry:=.28;
Apex:=(H+L)/2;
WB:=Ref(H,-2)-Ref(L,-2);
Shark:=If((H<Ref(H,-1) AND L>Ref(L,-1) AND Ref(H,-1)<Ref(H,-2) AND
Ref(L,-1)>Ref(L,-2))=1,If(Apex <= (Ref(H,-2)-(WB*Symmetry)) AND
Apex >= (Ref(L,-2)+(WB*Symmetry)) ,1,0),0);
Ref(Shark,+1)=1;

Name: "1st Bar"
Color: Blue

Symmetry:=.28;
Apex:=(H+L)/2;
WB:=Ref(H,-2)-Ref(L,-2);
Shark:=If((H<Ref(H,-1) AND L>Ref(L,-1) AND Ref(H,-1)<Ref(H,-2) AND
Ref(L,-1)>Ref(L,-2))=1,If(Apex <= (Ref(H,-2)-(WB*Symmetry)) AND
Apex >= (Ref(L,-2)+(WB*Symmetry)) ,1,0),0);
Ref(Shark,+2)=1;

Click the Symbols tab, choose New and enter "Shark Buy" in the Name field.
Now enter the following formula in the Condition field.

"Shark Buy"
Symmetry:=.28;
Apex:=(H+L)/2;
WB:=Ref(H,-2)-Ref(L,-2);
Shark:=If((H<Ref(H,-1) AND L>Ref(L,-1) AND Ref(H,-1)<Ref(H,-2) AND
Ref(L,-1)>Ref(L,-2))=1,If(apex <= (Ref(H,-2)-(WB*Symmetry)) AND
Apex >= (Ref(L,-2)+(WB*Symmetry)) ,1,0),0);
Buyok:=Cross(C,ValueWhen(1,Shark=1,Ref(H,-2)));
Chk:=Cum(Buyok)-ValueWhen(1,Shark=1,Cum(Buyok));
ValidChk:=Alert(Shark=1,25);
Buy:= Buyok=1 AND Ref(Chk,-1)=0 AND ValidChk=1;
Buy;

Symbol: Buy Arrow
Color: Green
Label: Buy

{Note* The above ValidChk variable makes the Shark signal valid for 25 periods. If the price does not cross above the High value of the base within 25 periods, you will not receive a signal. You can change the number of periods by changing 25 to the number of periods you desire. *}

Click the Graphic tab. Change the symbol in the Graphic field to Buy Arrow. Now change the color in the Color field to Green. Finally, type "Buy" inthe Label field, and then choose OK.

Using the Same method as above, enter the following Symbol formula.

"Shark Sell"
Symmetry:=.28;
Apex:=(H+L)/2;
WB:=Ref(H,-2)-Ref(L,-2);
Shark:=If((H<Ref(H,-1) AND L>Ref(L,-1) AND Ref(H,-1)<Ref(H,-2) AND
Ref(L,-1)>Ref(L,-2))=1,If(apex <= (Ref(H,-2)-(WB*Symmetry)) AND
Apex >= (Ref(L,-2)+(WB*Symmetry)) ,1,0),0);
Sellok:=Cross(ValueWhen(1,Shark=1,Ref(L,-2)),C);
Chk:=Cum(Sellok)-ValueWhen(1,Shark=1,Cum(Sellok));
ValidChk:=Alert(Shark=1,25);
Sell:= Sellok=1 AND Ref(Chk,-1)=0 AND ValidChk=1;
Sell;

Symbol: Sell Arrow
Color: Red
Label: Sell

{Note* The above ValidChk variable makes theShark signal valid for 25 periods. If the price does not cross below theLow value of the base within 25 periods, you will not receive a signal. Youcan change the number of periods by changing 25 to the number of periodsyou desire. *}

After you have finished creating the Symbol formulas, you can attach theExpert to your chart by choosing Expert Advisor from the Tools Menu. Selectthe Expert called "Shark –32" from your list of Experts, choose Attach,and then Close.

Code:

Source: http://www.equis.com

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