On Balance Swing Trading System

To Import this Trading System,

1. Open the Configure Modules Window and
2. Right click on the window. 
3. Then choose Import and select OBVolume.mod

See the OnBalance Volume indicator too see how it is calculated.  This system yields powerful results when combined with Stormtracker's ability to automatically enter multiple positions.  When the slope of the OBVolume diverges from the slope of the price, this indicates the current trend in price is not healthy.  This is a starter system that uses the slope of the 50 period moving average and the slope of the OBVolume (both on the Daily Timeframe).  If the slope of the 50 period moving average is decreasing and the slope of the OBVolume is increasing, then a long position is taken with a 2% sliding stop and a 5% target.  While this is a very simple system you can see the type of results that can be obtained, by taking multiple positions and managing them through Stormtracker.   With a little tweaking it can probably be optimized further.

The backtesting period was from 1/2/2005 through 9/30/2006, approximately 1 3/4 years.  Using 100 shares/position, the capital required was 200K(or 100K using 2:1 margin).  Using this as a basis, the annualized return was approximately 33%

Possible Variations:

• Vary the period of the 50 period moving average on the daily chart
• Vary the threshold for the slope of the moving average for both the symbol and the OBVolume indicator

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS EXISTS IN ANY TRADING SYSTEM.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK AND NO HYPOTHETICAL TRADING RECORD AN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.