MetaStock eMonitor - April 2004

The New MetaStock 9.0
Our exciting new features = Incredible Analysis

If you haven't had a chance to take a look at MetaStock 9.0, the latest upgrade to the award-winning analytical software, then here is your chance. The new tools in MetaStock 9.0 can make your trading easier and more profitable with these exciting new features;

We've taken Data Management above and beyond!
We've made the process of managing your data much easier with the addition of three new tools; Stocks Grouped by Sectors, a self-extracting Historical Data CD grouped by Sectors, and one-button downloading.

Sector Groupings help you find the best performing stocks in the strongest industries. You see, money shifts from sector to sector. Even in bad markets there are sectors that are performing well. Our job as traders is to find where the money is flowing so we can get in on the movement that occurs with this monetary shifting.

In addition to the Sector groupings, we made improvements to our Historical Data CD. It is now self-extracting, so you don't have to bother with moving files from the CD to your computer. And its also organized by sectors.

And to round out our data management improvements, we have added a single button for updating your MetaStock data folders. Press a button and data starts flowing into the folders and sub-folders of your entire database! These three tools will make your Data management fast and easy - the way you like it.

The Largest User Group Yet - The MetaStock Community.
Introducing the MetaStock Community - the revolutionary way for MetaStock users to interact with each other, built right into MetaStock!

There's so much you can do with the MetaStock Community. You can instantly chat with Equis Customer Support, and share trading ideas, formulas, and charts with traders of similar interests.

You can join one of the pre-established chat rooms, or you can join a public or private chat room created by another MetaStock user. You can even create your own chat room.

If you are already a 9.0 user, you will be noticing some changes in the MetaStock Community in the near future. In response to your requests we have extended the 'life' of a chat room from 20 minutes (without activity) to 7 days. We will also be streamlining the number of general chat rooms.

Broad Market Indicators
MetaStock 9.0 allows you to gauge the direction of the overall market with a wide variety of broad market indicators. Why is this beneficial to you? A large majority of stocks follow the overall market. There's an old saying, "A rising tide lifts all boats." Broad Market indicators let you know whether the tide is coming in or going out.

There are 11 monetary indicators, 36 momentum indicators for NASDAQ, and 36 momentum indicators for the NYSE, totaling 83 broad market indicators in all. Only MetaStock gives you the tools to thoroughly analyze the Broad Markets.

Support and Resistance Lines
Our extremely popular Dynamic Trading Tools: Profiting with Support, Resistance and Trendline Breakouts module has been added to MetaStock 9.0. This lets you automatically draw support, resistance, and trendlines on your charts. This tool has two types of indicators, long term and short term, covering resistance, support, trendline down and trendline up.

Additional System Tests and Explorations
We've added nine new system tests in addition to nine new explorations to match Expert Advisors already in MetaStock. You'll have explorations and system tests for: Bollinger Bands, Chande Momentum Oscillator, Directional Movement Index, MACD, Relative Strength Index, Momentum, Stochastic Oscillator, and Trend and Volatility Analysis.

Point and Figure Toolbox for Unique Analysis
Get a whole new perspective on the markets with the Point & Figure Toolbox! With MetaStock 9.0 you'll get a Point and Figure toolbox that gives you four explorations, four experts, eight indicators and two system tests based on the Point and Figure charting style. The system tests give you buy and sell signals based on chart patterns such as triple tops and bottoms, triangles and more. The explorations will search for specific patterns and help you make a watch list.

Automatic Window Tiling
Now when you pull up more than one chart or open any additional window in MetaStock, all of your windows will automatically tile for easy viewing.

MetaStock is the most well-rounded analysis package available. With the addition of stocks grouped by sectors, a self extracting Data CD, one-button downloading, the MetaStock Community, Broad Market Indicators, a Point and Figure Toolbox, Support, Resistance and Trendlines, additional system tests, and auto-tiling, MetaStock 9.0 gives you incredible power and functionality to help you hunt down those profitable trading opportunities.

ICE 2.0
MetaStock's newest add-on

ICE 2.0 is the only way to create your own powerful and personal trading systems for MetaStock... with NO formula writing and NO computer programming.

Each symbol is unique and has its own characteristics. Ideally, then, each symbol should have its own unique trading system specifically fine-tuned for its individually nuances. ICE 2.0 makes it easy for anyone to create and optimize their own trading systems - and NO formula writing or programming required!

Created by longtime Equis insider John Slauson
During his 12 year career with Equis, John helped industry gurus such as John Murphy, John Bollinger and Steven Nison create their popular MetaStock plug-ins. And through coaching traders on custom trading system development, John created ICE that automates the process for anyone. ICE is the best way to remove the heat of emotional trading and focus on the cold, hard facts of a reliable system.

As easy as 1-2-3
With ICE 2.0, you can create your own winning trading systems in just three easy steps:
1. Find the best indicators (Volume, Velocity, Verticality, and Volitility).
2. Optimize those indicators for appropriate weighting.
3. Auto-install the final ready-to-use trading system right into MetaStock.

ICE gives you more confidence in your trading because you build your trading system. By following the simple step-by-step instructions, you'll know exactly why your system is generating certain signals.

Ice's structured "recipe" approach gives you a definite trading advantage. All of the "ingredients" of your system are the absolute finest available.

Mr. Dan Valcu, a private trader in Sweden, authored a very interesting article about the Heikin-Ashi (pronounced like hey-keen awe-she) candlestick style in the February 2004 issue of Stocks & Commodities Magazine. His article begins on Page 16 of that issue. My purpose today is to educate our customers about how the Heikin-Ashi candlesticks method described in Mr. Valcu's article might be put to use in MetaStock.

Heikin-Ashi Candlesticks price style is not currently supported by the current version of MetaStock. However, there is currently a workaround that will permit Heikin-Ashi Candlestick charts, such as the one below.

Fig. 1: A MetaStock chart that duplicates the Heikin-Ashi chart of Canon shown as Figure 1B
on Page 20 of Mr. Valcu's article, although Volume bars are added. The blue and red colors
are indicating whether the Close is up or down from the previous bar.

To produce the chart above:

What happens when there is new data for Canon? I will have to convert the new data to get the Heikin-Ashi values and put them into the haCanon datasheet, either by copying them from Excel, or manually entering them myself.

Tips for Indicators, System Tests, Experts, & Explorations

Indicators
MetaStock does support the indicators Mr. Valcu provides on page 25 of his article. These indicators, which can be plotted in a chart (and then included in a template, if desired) will give useful visual displays in your chart, even if it is not using the Heikin-Ashi price style. You should create these indicators using the formulas he gives in his sidebar. You can refer to them in the other power tools, as needed.

System Tests
On Page 26, Mr. Valcu includes two blue-bulleted paragraphs, which give clues to how his formulas can be used for System Tests, Expert Advisors, and Explorations. The first states that "crossings" of his Mov-haDiffCO indicator will give good buy/sell signals, meaning the moving average of the haDiffCO crosses over the haDiffCO. The second says that positive values of his Mov-haDiffCO indicate an uptrend, while going below zero (i.e., negative values) indicate a downtrend.

A bullish crossing of the SMA over the haDiffCO indicator could be tested for with the following formula:

To test for a bearish crossover, reverse the order of the two parameters within the Cross() function:

I use 3 in the above formulas for the Periods to be used to calculate the Simple Moving Average (SMA). His Mov-haDiffCO indicator prompts the user for the Periods, but for Experts Advisors, or Explorations, you must 'hard-code' a value for the Periods you wish to use. You may wish to run optimized back-tests to determine whether 3 is the best value for the Periods parameter, in which case you might replace the 3 with Opt1.

Heikin-Ashi Explorations
These same crossover formulations shown above could be used in an Exploration, in the Filter page, to scan for buy/sell signals in your data files. Remember, if you optimize first, use the value you determined to be 'best' for the Periods in your Exploration formula.

Expert Advisors
An Expert Advisor has three ways to indicate a trend, 1) the Trend tab's Ribbon, 2) coloring the bars/candles via the Highlights tab, or 3) creating a Commentary with appropriate wording and formulas to indicate what the Trend is. Mr. Valcu's blue-bulleted item suggested using the Mov-haDiffCO to determine a trend.

For instance, for a Bullish trend, you could use:

Fig. 2: A normal candlestick chart of Canon, with an Expert Advisor attached, which colors the
bars using Mr. Valcu's Mov-HaDiffCO indicator. Blue for Bullish trends, and Red for Bearish
trends. The chart shows the date range 9/1/1999 to 1/25/2000.

Fig. 3: Here is my haCanon Heikin-Ashi Candlesticks chart, covering the same date range,
with the same Mov-HaDiffCO Expert Advisor attached.

Fig. 4: An alternative set of formulas, which seem to be a touch more responsive to changes in
trend direction due to the use of an Exponential Moving Average.

You can see that this workaround for creating Heikin-Ashi Candlesticks charts is a bit tedious, so it is not really practical for Intraday charting. End-of-day users, with a little practice, should be able to effectively use this exciting new price style.

MetaStock cannot compress a Daily Heikin-Ashi chart to any other Periodicity, such as Weekly. If you need a Weekly Heikin-Ashi chart, you must start with Weekly data and proceed to convert the data as described above, placing it into a Weekly MetaStock data file, and then you can open the Weekly chart in MetaStock.

Another thing to be aware of is that some indicators that you might normally place in your charts may behave differently in this chart. For instance, if I were to bring up two charts, one of Canon (CAJ) and one of haCanon (HACANON) and use Williams%R, the Demand Index, OnBalanceVolume, or any number of indicators which use the inter-relationships of the Open, High, Low, and Close prices, the two charts will show these indicators differently. This is because the haCanon's data is different than Canon's data. In some cases, the indicators in haCanon's chart might be preferable, but in most cases the indicators that are in Canon's chart would be more valid.

With the above information, you should be able to implement some useful tools in MetaStock that use the Heikin-Ashi method, even without going through the data-conversion process needed to produce and display the chart in Heikin-Ashi Candlesticks.

If you have any difficulty understanding these instructions, you can reach me at support@equis.com or by calling 1-801-265-9998, our Support Department number. I've tried to give you sufficient formula help here so that you could create an Expert Advisor yourself, but if you want us to just send you the Expert I've illustrated here, we can do so, if you send a request to formulas@equis.com. The charge will be $30, our minimum custom formula-writing fee.

Tradeshows
We are attending the Money Show, May 10 - 13 in Las Vegas. Not only will we have a booth, we will be running some breakout sessions. If you haven't upgraded and want a personal demonstration of MetaStock 9.0, stop on by!

Expert Symposiums - Coming Soon!
We are currently organizing interactive chat sessions with industry gurus and insiders. These will be held in our 9.0 MetaStock Community. Watch for more information on metastock.com/events.

Workshops - All New Format!
These all new workshops show you how to trade the new market using the tools found in MetaStock 9.0. This is a must for current users and anyone interested in becoming a MetaStock user. Check metastock.com/events for further details.

Some of the incredible new tools to help you dig deeper into the markets include:

Reserve your spot!
Click here to reserve your spot at this remarkable workshop and you'll also get two weeks of Investor's Business Daily free of charge. And don't forget, attend this seminar and you'll get the book 24 Essential Lessons for Investment Success, by William J. O'Neil--FREE, plus the best pricing anywhere on MetaStock add-on software and data products.

WORKSHOP SCHEDULE
April 24 - Lisle, IL

April 25 - Boston, MA
May 1 - San Francisco, CA
May 1 - Ft. Lauderdale, FL
May 2 - Vancouver, Canada
May 2 - Atlanta, GA
May 15 - Secaucus, NJ
May 16 - Baltimore, MD
June 5 - Manhattan, NY
June 6 - Toronto, Canada
June 12 - Denver, CO
June 13 - La Jolla, CA

Q: In 9.0, how do I learn more about the BroadMarket Indicators, the P&F Toolkit, and the Dynamic Trading Tools?
A: During installation, three *.pdf files, Broad Market Indicators.pdf, Dynamic Trading Tools.pdf, and Point and Figure Toolbox.pdf, are placed in the MetaStock folder (typically this is at C:\Program File\Equis\MetaStock) that go into these new items in some detail. You'll need Adobe Acrobat reader to read them, but you can get a free copy of it from the Adobe web site (www.adobe.com).

Q: How can I run an Exploration to find Relative Strength Comparative values?
A: In versions of MetaStock for Windows prior to 8.01, this had to be done using the "P" variable and required you to open the chart of the index to be compared against. With the latest version this can now be done with the Security Data Function.

To construct a Comparative Relative Strength Exploration in MetaStock for Windows version 8.01 & 9.0, you need to follow the following steps (This example will reference online data from Reuters DataLink, specifically the S&P 500):
Open the Tools menu
Select the Explorer
Click New
Name the exploration Relative Strength Comparative
Select the Column A tab
Enter the following formula;

Click OK
Run the Exploration
The results are displayed in the exploration report. They can be ranked by selecting the column header.

To construct a Comparative Relative Strength Exploration in MetaStock for Windows, prior to version 8.01, perform the following steps:
Open the chart for the desired index
Click to select the price plot (This will place small boxes on the prices to designate that the price has been selected)
Create a custom exploration for the Relative Strength Comparative
Open the Tools menu
Select the Explorer
Click New
Name it Relative Strength Comparative
Select the Column A tab
Enter the following formula;

Note: (The P variable references the selected indicator in the active chart which would be the close)

Click OK
Run the Exploration
The results are displayed in the exploration report. They can be ranked by selecting the column header.

Q: How do I create the Arms Index (TRIN) or McClellan indicators in MetaStock version 8.01 & 9.0?
In prior versions of MetaStock for Windows, these indicators had to be applied to composite securities, and then this data and indicator had to be moved into another chart.

With version 8.01 and later, you can create these indicators using the Security Data function, and then simply drop the indicator from the QuickList to any chart, saving time and extra work. The Security Data function can reference DataOnDemand or local data files.

The first example below uses online data (DataOnDemand) to create the Arms Index (TRIN). The first formula will reference the advancing issues/advancing volume and the declining issues/declining volume directly from the Reuters DataLink server, and it can be plotted on any chart as an indicator. This can also be accomplished with local data, but the local security needs to be referenced in the formula. The second formula is an example that uses local data (stored on the hard drive) to create the Arms Index (TRIN). Following these are the formulas for the McClellan Oscillator and Summation Index, using online data. These can be changed to reference local data, as well.

To create the TRIN using DataOnDemand;
Open the Tools menu
Select Indicator Builder
Click New
Give it a name (for example, TRIN-online)
Enter the following syntax into the Formula field;

To create the TRIN using LOCAL DATA, you would need to reference the appropriate data path for where the data is stored on your computer:
Open the Tools menu
Select Indicator Builder
Click New
Give it a name (for example, TRIN-local)
Enter the following syntax into the Formula field;

Cum(Security("C:\MetaStock Data\X.NYSE-A",C)-Security("C:\MetaStock Data\X.NYSE-D",C))

To create the McClellan Oscillator, using online data;
Open the Tools menu
Select Indicator Builder
Click New
Name the file (for example, McClellan Oscillator (Online)
Enter the following syntax into the Formula field:

NYSEAdvDec:=Security( "ONLINE:X.NYSE-A", CLOSE ) - Security( "ONLINE:X.NYSE-D",CLOSE );
Mov(NYSEAdvDec,19,EXPONENTIAL) - Mov(NYSEAdvDec,39,EXPONENTIAL)

To create the McClellan Summation Index, using online data;
Open the Tools menu
Select Indicator Builder
Click New
Give it a name (for example, McClellan Summation Index (Online)
Enter the following syntax into the Formula field;

NYSEAdvDec:=Security( "ONLINE:X.NYSE-A", CLOSE ) - Security( "ONLINE:X.NYSE-D",CLOSE );
Cum( Mov(NYSEAdvDec,19,EXPONENTIAL) - Mov(NYSEAdvDec,39,EXPONENTIAL) )

These indicators can now be plotted on any chart. The formulas for these online indicators require an active subscription for Indices with Reuters DataLink. These formulas can also be used in MetaStock Professional versions 7.0 or newer, although you would need to adjust the symbol for the appropriate data vendor.

Q: How can I change my candles to show up/down colors?
A: This subject has caused some confusion in the past, when changing the up/down colors in the Price Properties dialog. The up and down color options in the price properties windows are not based on the same open/close relationship that govern candlesticks. Candlesticks are solid (black) if the open is greater than the close and hollow (white) if the open is less than the close. The price bars are colored by the properties window as up if today's close is more than yesterday's close and down if today's close is less than yesterday's close. If you want to have candles colored differently, you will need to use an expert with different highlights setup for white and black candles.

You can do this with an Expert Advisor as follows:
Start MetaStock.
Display a candlestick chart.
Open the Format menu
Select Prices.
Set the UP and DOWN fields to black and click OK (or white if using a black background).
Open the Tools menu
Select Expert Advisor.
Click New.
Click the Name tab.
Type Candlestick Color Change into the Name field.
Click the Highlights tab.
Click New.
Type UP CANDLE into the name field.
Set the color to Green.
In the Condition field, type the following formula:

Click OK.
Click New again.
Type DOWN CANDLE Into the name field.
Set the color to Red.
In the Condition field, type the following formula:

Click OK
Click OK to Close the Expert Editor menu.
Then click Attach to attach this Expert to the Chart.
The candlestick chart will now display Green and Red.

Our User Groups are an invaluable source of information and support. Have a look at our website to see if there is a User Group in your area.

No User Group in your area? Become a User Group Leader! We will help you set up your group and contact MetaStock users in your area. You will also be invited to our User Group Leader meetings held monthly in our 9.0 chat room to share meeting ideas and materials! Simply email us at usergroups@equis.com and we will help you get started!

Thank you for your feedback to the October eMonitor. We received many great suggestions.

If you would like to make suggestions about the eMonitor, please email editor@equis.com with feedback. While we are not able to reply to each email, we do, however, carefully consider each suggestion we receive. We will use your feedback to make the MetaStock eMonitor a quality publication for you.

If you have suggestions or questions for anything other than the eMonitor, you can send them to the following email addresses: