Simple AFL code for 5 EMA(High-Low)

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Simple AFL code for 5 EMA(High-Low)

27 December 2009 379 views 11 Comments

Here the Idea is to design a basic 5 EMA(High-Low) system which could produce

Buy/Sell Signals whenever the candle crosses the 5 EMA(High/Low) lines

i.e A Buy Signal should produced when it crosses and closes above 5 EMA(High) line

and a Sell Signal should produced when it crosses and closes below 5 EMA(low) line

Buy = Cross(Close,EMA(High,5));
Sell = Cross(EMA(Low,5),Close);

Amibroker’s AFL code had been designed to implement this system with Green Arrows in

the charts indicating Buy Signal and the Red downward arrows indicating sell signal

PlotShapes(IIf(Sell==1, shapeDownArrow, shapeNone), colorRed, 0,High, Offset=-20);
PlotShapes(IIf(Buy==1, shapeUpArrow , shapeNone), colorGreen, 0,Low, Offset=-20);

Both the weekly and Daily charts are shown with buy/sell signals. Just like any other trend following

system 5 EMA(High-Low) also works bad when the trend is side ways and produce more mixed signals

And where there is a strong trend the signals are good and could generate good potential returns.

The Complete AFL code for 5 EMA(High-Low) Buy/Sell Trading system

_SECTION_BEGIN(“5 EMA High-Low”);
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat(“{{NAME}} – {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}”, O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( Close, “Close”, ParamColor(“Color”, colorBlack ), styleNoTitle | ParamStyle(“Style”) | GetPriceStyle() );
Buy = Cross(Close,EMA( High , 5 ));
Sell = Cross(EMA( Low , 5 ),Close);
PlotShapes(IIf(Sell==1, shapeDownArrow, shapeNone), colorRed, 0,High, Offset=-20);
PlotShapes(IIf(Buy==1, shapeUpArrow , shapeNone), colorGreen, 0,Low, Offset=-20);
Plot( EMA( Low,5), “5 EMA LOW”,ParamColor(“Color”, colorBlue ),styleNoRescale);
Plot( EMA( High,5), “5 EMA High”,ParamColor(“Color”, colorBlue ),styleNoRescale);
_SECTION_END();

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Written by: Rajandran R

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11 Comments »

Market Hypothesis said:
Little modification is required. Please draw the 5EMA (High Low) Band.

# 27 December 2009 at 10:23 am
Rajandran said:
I had added in the coding part alone

# 27 December 2009 at 2:44 pm
Market Hypothesis said:
Dear RajI have just modified your afl i.e.Buy = Cross(Close,EMA( Low , 5 ));Sell = Cross(EMA( High , 5 ),Close);and found more meaningful. Please do comment on this modification.

# 27 December 2009 at 2:55 pm
Rajandran said:
Its adds more value to the trading systemin minimizing the losses and producing avalueable system.

# 27 December 2009 at 3:00 pm
Market Hypothesis said:
One more modification is required. Just open daily Nifty Chart and just watch 16-12-2009. it has given false signal. I do not know how to omit it but this type of false signal can be omitted.If possible then it will be great trading system.Thanks

# 27 December 2009 at 3:08 pm
Rajandran said:
Iam sorry iam not getting any false signal on 16-12-2009

# 27 December 2009 at 3:36 pm
Market Hypothesis said:
More modification done in Buy sell.Buy = Cross(Close,EMA( Low , 5 ))OR Cross(Close,EMA( High , 5 )); Sell = Cross(EMA( High , 5 ),Close)OR Cross(EMA( Low , 5 ),Close);It works fine in hourly and daily chart. I have added your earlier Buy Sell signal conditionally because if turn around happened within the band then this conditional extension is required.

# 27 December 2009 at 5:03 pm
Rajandran said:
@ShyamWe should not try to create more buy/sell signals.As this would create a mess. The scope of creating a buy/sell signal is to identify turns earlier and to generate potential profits. If you include 5 EMA signals also then it would probably create a mess and finally ends in confusion(i.e should we have to believe this signal or not)

# 27 December 2009 at 7:54 pm
Rajandran said:
if the signal density is high then your profit potential is very low

# 27 December 2009 at 7:56 pm
dinesh said:
hi thanks for afl. pls explain how to trade with help of this afl. on which scripts gives good results?

# 14 February 2010 at 8:51 pm
Rajandran R said:
Dinesh,
I tried for hourly, Daily and Weekly yielding good results. to know how to trade this afl just visit this post Simple Rules to Trade Using 5 EMA(LOW-HIGH)

# 15 February 2010 at 4:34 pm