|  OCT 1997

Traders' Tips

METASTOCK “On using volatility bands” by Ahmet Tezel and Suzan Koknar-Tezel introduces two different volatility band trad-ing systems, one system using bands based on moving averages and the other based on regression bands. To plot the moving average asymmetric volatility price bands (MAAVPB) in MetaStock for Windows, simply plot Bollinger bands using 11 periods and 1.7 standard deviations. Then click your right-mouse button while the cursor is over the lower band and choose properties. Change the standard deviations to 2. This plot will now appear exactly as the bands discussed in the article. To plot the regression asymmetric volatility price bands (REGAVPB) in MetaStock for Windows, simply plot standard error bands using 21 periods, one for standard errors and one for the smoothing periods. Then click your right-mouse button while the cursor is over the lower band and choose properties. Change the standard errors to 1.5. To recreate the systems in MetaStock for Windows, choose System Tester from the Tools menu. Next, choose New and enter the following trading rules and stop conditions. After entering this information, choose Options and change the trade delay to 1, then change the Trade Price to Open. If you have MetaStock 6.5, enter the first set of formulas. MetaStock 6.5 allows variables that will allow you to change the periods when testing much more easily.

by Technical Analysis, Inc.