For Traders' Tips this month, I have taken the seasonal soybean strategy presented by John Momsen in "Seasonal Trades And The Channel Breakout System" and recreated an accompanying indicator that displays the different levels that are defined in the strategy. Specifically, the indicator uses plots to display the entry stop, profit stop, and protective stop levels. This indicator is designed to be applied to a chart in combination with the seasonal soybean strategy, since it references the current market position when plotting the values on the chart.
The indicator, called "seasonal SB -- short," is only active during the timeframe specified in the original seasonal soybean strategy. When entering the timeframe, the entry stop level will be displayed on the chart. Once a position is entered, the entry stop is no longer displayed and the indicator instead displays the profit stop and the protective stop levels. When the position is closed out, the indicator again begins to display the entry stop value until the end of the timeframe. By displaying the important strategy entry/exit levels, this indicator provides seasonal traders with a visual point of reference of their open position status.
Below is the EasyLanguage that is used to develop the "seasonal SB -- short" indicator in the PowerEditor. I have given some style and scaling recommendations immediately following the EasyLanguage.
Type: Indicator, Name: Seasonal SB - Short
Inputs: EntryStop(16), ProtectStop(5), ProfitStop(11);
Variables: EntryStp(0), ProtectStp(0), ProfitStp(0);
Condition1 = Month(Date) = 5 AND DayOfMonth(Date) > 14;
Condition2 = Month(Date) = 6;
Condition3 = Month(Date) = 7;
Condition4 = Condition1 OR Condition2 OR Condition3;
Condition5 = I_MarketPosition = -1;
EntryStp = Lowest(Low, EntryStop) - 6 Points;
ProfitStp = Highest(High, ProfitStop) + 1 Point;
If Condition5 <> Condition5[1] Then
ProtectStp = Highest(High, ProtectStop) + 1 Point;
If Condition4 AND Condition5 = False Then Begin
Plot1(EntryStp, "EntryStop");
Plot2(EntryStp, "EntryStop");
End;
If (Condition4 AND Condition5) OR Condition5 Then Begin
Plot3(ProtectStp, "ProtectStop");
Plot4(ProfitStp, "ProfitStop");
End;
Style:
Plot Name Type Color Weight
Plot1 EntryStop Left Tic Red medium
Plot2 EntryStop Right Tic Red medium
Plot3 ProtectStop Right Tic Drk magenta medium
Plot4 ProfitStop Right Tic Magenta medium
Scaling: Same as Price Data
The design of this indicator is not exclusive to just this seasonal soybean strategy. The same idea can also be applied to other seasonal strategies as well by simply adjusting the dates and/or the entry and exit parameters.
The EasyLanguage for the "seasonal SB - short" indicator and strategy described in the article are available for downloading from www.omegaresearch.com. The name of the file is "Seasonal.ELS."
-- Gaston Sanchez, Omega Research Inc.
800 422-8587, 305 270-1095
http://www.omegaresearch.com