## Dr Alexander Elder Safe Zone

This is a discussion on Dr Alexander Elder Safe Zone within the Trading Software forums, part of the Commercial category; I find Dr Alexander Elder SafeZone indicator very useful in trading with Metastock charting. I also trade with charts using ...

 Jul 30, 2008, 11:53am #1 Joined Jul 2008 Dr Alexander Elder Safe Zone I find Dr Alexander Elder SafeZone indicator very useful in trading with Metastock charting. I also trade with charts using Easy language and C#, have not been successful in translating Safezone to this other charting. Can anyone help?
 Jul 30, 2008, 12:21pm #2 Joined Oct 2006 Contact the author, maybe he has a plug-in Ron
 Jul 30, 2008, 1:23pm #3 Joined Jan 2007 This any good ? This is an adaptation of Dr. Elder's stop based on the following points that he emphasizes in his book: (1) you may use the slope of a 22 day EMA to define the trend (2) SafeZone is not a mechanical gadget to replace independent thought. (3) Calculate the stops separately for uptrends and downtrends. (4) The lookback period should not go back beyond the last important turning point. If the market has reversed from down to up two weeks ago, then the SafeZone for the current long trades should not look back more than 10 trading days. (5) An important decision is choosing the coefficient for the SafeZone stop. He says a coefficient between 2 and 3 provides a margin of safety, but you must research it on your own market data. (6) You can add it to almost any trading system, including Triple Screen. (7) The excel code that Dr. Elder used in his book kept the stop from declining for 3 days, by which time either the uptrend resumes or the stop is hit. This code uses a period of 5. } INPUTS: Price((H+L)/2), MALength(22), Lookback(15), Trend(3), AutoLBck(True), MultLong(2), MulShort(2); VARIABLES: MA(0), Ldiff(0), Lday(0), Sdiff(0), Sday(0), Longsum(0), Shortsum(0) , Countlng(0), Countshr(0), Avglow(0), Avghigh(0), Longstop(0), Shortstp(0), Lstop(0), Sstop(0), ii(0), LBackTmp(0); {Determine trend by slope of EMA} MA = xaverage( Price, MALength ); Condition1 = MA > MA[Trend]; Condition2 = MA < MA[Trend]; {Determine Lookback Period (to prior swing extreme)} IF LBackTmpCondition1[1] THEN BEGIN LBackTmp=LookBack; Value1=MinList(MALength*0.66,LookBack); IF Condition1 and AutoLBck THEN IF LowestBar(L,Value1) L, L[1] - L, 0); { Difference of lows } Lday = IFF(L[1] > L, 1, 0); { 1 if this is a "low's" day } Sdiff = IFF(H[1] < H, H - H[1], 0); { Difference of highs } Sday = IFF(H[1] < H, 1, 0); { 1 if this is a "high's" day } {SAFEZONE FOR LONGS} {Get average of lows lower than prior low} Longsum = summation(Ldiff, LBackTmp); Countlng = summation(Lday, LBackTmp); IF Countlng <> 0 THEN Avglow = Longsum / Countlng; {Calculate stop at "X" times avglow} Lstop = LOW - (MultLong * Avglow); {Prevent stop from being lowered} Longstop = MAXLIST(Lstop, Lstop[1], Lstop[2], Lstop[3], Lstop[4], Lstop[5]); {Set Plot} IF Condition1 THEN BEGIN PLOT1(Longstop[1], "LSTOP"); IF lastbaronchart THEN BEGIN Plot1[-1](Longstop, "LSTOP"); {Shows tomorrows stop on lastbar+1} Plot3(Longstop, "StopNext"); {Indicates tomorrows stop: set indicator to point/black} END; END; {SAFEZONE FOR SHORTS} {Get average of highs higher than prior high} Shortsum = summation(Sdiff, LBackTmp); Countshr = summation(Sday, LBackTmp); IF Countshr <> 0 THEN Avghigh = Shortsum / Countshr; {Calculate stop at "X" times avghigh} Sstop = HIGH + (MulShort * Avghigh); {Prevent stop from rising} Shortstp = MINLIST(Sstop, Sstop[1], Sstop[2], Sstop[3], Sstop[4], Sstop[5]); {Set Plot} IF Condition2 THEN BEGIN PLOT2(Shortstp[1], "SSTOP"); IF lastbaronchart THEN BEGIN Plot2[-1](Shortstp, "SSTOP"); {Shows tomorrows stop on lastbar+1} Plot3(Shortstp, "StopNext"); {Indicates tomorrows stop: set indicator to point/black} END; END; "Final" Alexander Elder's "SafeZone Stop" for Tradestation 4 __________________ "You smell that? Do you smell that? Coin, son. Nothing else in the world smells like that. I love the smell of Coin in the morning."~ Colonel Coin
 Jul 30, 2008, 4:16pm #4 Joined Jul 2008 Thanks, will give this a try