Jim Berg’s article, "The Truth about Volatility," published in the February 2005 issue, introduces a volatility based trading system. The system includes indicators, a system test and an Expert Advisor. Below are the instructions to reproduce these formulas in MetaStock.

The indicators can be created with the following steps:

<li>In the Tools menu, select Indicator Builder. <li>Click New to open the Indicator Editor. <li>Type the name "volatility trailing stop indicator". <li>Click in the large window and type in the formula:

HHV(C-(2*ATR(10)),15)

<li>Click OK to close the editor

Repeat the steps for the second indicator:

<li>Select Tools > Indicator Builder <li>Click New to open the Indicator Editor. <li>Type the name "volatility profit indicator". <li>Click in the large window and type in the formula:

Mov(H,13,E)+(2*ATR(10))

<li>Click OK to close the editor

A system test for the volatility system can be created with the following steps:

<li>Select Tools > the Enhanced System Tester. <li>Click New. <li>Enter a name for the system. <li>Select the Buy Order tab and enter the following formula:

C > (LLV(L,20) + (2*ATR(10)))

<li>Select the Sell Order tab and enter the following formula:

C < (LLV(L,20) + (2*ATR(10)))

<li>Click OK to close the editor

The expert advisor can be created with the following steps:

<li>Select Tools > Expert Advisor. <li>Click New to open the Expert Editor. <li>Type in the name "Volatility Entry". <li>Click the Highlights tab. <li>Click New to create a new highlight. <li>Type in the name "Buy". <li>Set the Color to "blue". <li>Click in the condition window and type in the formula:

C > (LLV(L,20) + (2*ATR(10)))

<li>Click OK to close the editor <li>Click OK <li>Click New to create a new highlight. <li>Type in the name "Sell". <li>Set the Color to "red". <li>Click in the condition window and type in the formula:

C < (HHV(H,20) - (2*ATR(10)))

<li>Click OK <li>Click OK to close the Expert Editor.