This chart builds a Trading Strategy based on the crossover of the ITrend and ITrend Trigger indicators from Chapter 3.  The Trading Strategy also incorporates an emergency exit as a second condition that is based on the RevPCT (Reverse Percentage) factor of 1.015 used by Ehlers.  This chart takes Example Chapter 3 ITrend No Limit one step further.

In order to incorporate a limit price for the ITrend crossover condition and no limit for the emergency exit condition which uses the RevPct (Reverse Percentage), this add-on contains three additional indicators not included in Ehlers’ book:

Cyber3TSSignal

Cyber3TSLimit

Cyber3TSPosition

Ehlers’ Trading Strategy is built into these indicators.

The chart uses the Cyber3TSSignal indicator in the Relational condition A>B for the Long Entry condition.  The short side uses Cyber3TSSignal < B.  B is set to – 0.5.  The Cyber3TSSignal replaces both the crossover and emergency exit conditions from the Chapter3 ITrend No Limit chart.  Note:  In the Cyber3TSSignal indicator you need to replace the default value of close for the parameter for CrossAbove and CrossBelow with the CrossAbove and CrossBelow indicators from the Crossover category.  The CrossAbove and CrossBelow indicators use Ehlers Cyber3_ITrendTrigger and Cyber3_ITrend indicators.

Ehlers describes the benefits of limit orders compared to market orders.  The Cyber3TSLimit indicator creates a limit price for Ehlers' first condition – the ITrend/ITrendTrigger crossover.  The second condition (the emergency exit which uses the RevPct (Reverse Percentage) has an artificially high limit because it is not used (Ehlers had no limit on the Reverse Percentage condition).  The chart is formatted so the second limit is not displayed.  In the Cyber3TSLimit indicator you also need to replace close with the CrossAbove and CrossBelow indicators as described above.

Note:  This chart generates a lot of trading signals that are not filled because the limit price is never reached.  The signals that are filled are noted by an "x" on the chart.

For more information on this Trading Strategy, refer to Chapter 3 of "Cybernetic Analysis for Stocks and Futures" by John Ehlers, Publisher: John Wiley & Sons; (March 19, 2004), ISBN: 0471463078.

The Cybernetic Analysis add-on also includes a Trading Strategy template that corresponds to this example chart.  To select a template, go to the Insert menu, select New Trading Strategy, and select a Trading Strategy from the Cybernetic Analysis folder.