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19/08/2004 |
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MetaStock 7.2 Ian Waugh casts his eyes over a suite of programs designed to help the online investor in these troubled times for shares
It's about a year since we looked at MetaStock so we won't go over too much old ground again. Suffice it to say that it's arguably one of the best charting and TA (Technical Analysis) programs available. The Pro version supports real-time data for the ardent day traders out there (although you do need a compatible real-time data feed) otherwise the two versions are functionally very similar. The main New Thing about version 7.2 is the inclusion of Performance Systems. These are essentially trading systems with associated indicators and Expert Advisors. Yes, real trading systems designed to make you money. 26 of them are included with 7.2 while another 54 are available at an introductory price of $299 (usually $399) although we didn't have these to test. What a Performance The systems are varied. Some are based on existing indicators within MetaStock while other use new indicators and ideas. The code is fully available in MetaStock's Formula Language so you can see how they work and tinker with them if you wish. A booklet describes each of the systems and how it works. Performance Systems include several based on indicators such as an Adaptive Moving Average and Exponential Moving Average, Commodity Channel Index, Chande Forecast Oscillator and Momentum Oscillator, and the MACD. There are several systems based on Candlestick patterns, plus systems designed to catch breakouts and cycles. Of course, you want to know if these work and if they'll make you money. Well, even if a system makes a profit there's no guarantee that any individual could follow it and trade it and make money.
That's philosophy for another day but besides the profit level you need to know the drawdown (the maximum amount your account will dip during trading), the percentage of winners to losers (is all the money made on just a handful of trades?) and the number of consecutive losers (could you stand 12 losing trades in a row?). All these factors - and more - affect your own personal ability to trade the system. The manual makes the point that the systems were tested on a wide range of US stocks so you can't guarantee they will behave the same way in the UK market. Naturally, they work better on some markets than others and, of course, there's no guarantee that they will work in the future they way they have done in the past. Having said all that, yes, some of these systems do show a positive equity curve on some UK shares but you really need to do more homework than simply booting up a system and calling your broker. However, they are a good starting point particularly if you are new to systems. Likely candidates And for system users, one of the neat things about the program is the ability to run system tests over an entire database to highlight likely candidates. You can also run a comparison test to see which system works best with any given share. This is interesting and enlightening when you see that a system that makes a profit with one share makes a terrible loss with another. Note, however, that some of the Performance Explorations for the 26 supplied systems are only available with the purchase of the other 56... You can, therefore, select a system you like and see which shares it works with, or select a share you want to trade and see which system works best with it. And, of course, MetaStock generates daily buy and sell signals and alerts. Other than the performance Systems, many existing MetaStock users will doubtless think Equis has missed an opportunity to improve a few things with this update - resizable Report windows would be very useful to avoid scrolling, for example, and the ability to select a chart without having first to close the System Tester and other windows. Solid If you're looking for a solid charting and TA package, MetaStock fits the bill admirably. Whether or not you think it's worth upgrading just to get the Performance Systems, only you can say. The upgrade is a heckuva price compared to the cost of the full package and, we think, a little out of whack. It doesn't particularly reward existing customers. However, if you don't already have MetaStock, the Performance Systems make it additionally enticing (even though the price of the standard MetaStock has risen by $50). It's a very powerful program and, reservations apart, can be highly recommend. A MetaStock demo can be downloaded from the company's web site. |
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