Williams' 3 bar trailing stop
This is one of the very best trading techniques I have ever developed. The reason why is that it often rides mega trend markets for a long , long time, yet does not give back much profit when the correction begins as conventional moving average and channel.
This technique can be used not only as an exit techniques, but as an entry technique as well. It is really quite simple. Once the market is in a run away move, as I call it a “rock and roll” market – then and only then – do we use this exit. Price must be out of a trading range.
As a trailing stop: Make certain prices are out of congestion, they have begun to run, then, and only then, implement this as your trailing stop (i.e. exit).
For entry: Make certain the market is really set up. Sometimes the first entry will be false as a straight up or down market usually “bases” before the next trend move begins.
(excerpt from the author’s description of this trend following indicator)
This indicator has been requested by Maximus 78 here (https://www.prorealcode.com/topic/3-bar-trailing-stop-di-larry-williams/).
Blue skies!!!
count=1
i=0
j=i+1
tot=0
while count<4 do
tot=tot+1
if (low[j]>=low[i]) and (high[j]<=high[i]) then
//inside bar
j=j+1
else
count=count+1
i=i+1
J=i+1
endif
wend
basso=lowest[tot](low)
alto=highest[tot](high)
if close>alto[1] then
ref=basso
endif
if close<basso[1] then
ref=alto
endif
return ref
Comments
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Hi Gabri I launched a very simple strategy based on the 3 bars trailing stop that you created and plugged it with a dynamic trailing stop from Nicolas; it kikcked me out immediately but I don't understand why; Can you see the reason? What should have been the code? Very best, Chris PS : the insert code is not working here; //------------------------------------------------------------------------- // Code principal : STOP LOSS MM //------------------------------------------------------------------------- defparam preloadbars = 150 defparam cumulateorders = false entry = 32.30 // trailing stop count=1 i=0 j=i+1 tot=0 while count=low[i]) and (high[j]alto[1] then TrailATR=basso endif if close entry if condition then buy n shares at market //first stoploss: SL = TrailATR set stop ploss SL dynamicSL = SL endif //dynamicSL if longonmarket then if(TrailATR>dynamicSL) then dynamicSL=TrailATR endif sell at dynamicSL stop endif
Francesco,
I just tried to code an idea from Maximus 78 (https://www.prorealcode.com/topic/3-bar-trailing-stop-di-larry-williams/). I am sure he has all the info about strategies connected with this indicator. If I had to guess though I'd say that, being this a trailing stop indicator, it has to be used in conjunction with some other sort of trend indicator.
G
Hi, can you show at least one strategy that works well with this indicator?
The idea is nice.
Thank you
Franz,
can this code work for you?
count=1 i=0 j=i+1 tot=0 //calcolo 3 barre while count<4 do tot=tot+1 if (low[j]<low[i]) and (high[j]>high[i]) then //inside bar i=i+1 j=j+1 else count=count+1 i=i+1 J=i+1 endif wend if close>close[1] then basso=lowest[tot](close) endif if close<close[1] then alto=highest[tot](close) endif if barindex>1 then if close > ref[1] then ref=basso endif if close < ref[1] then ref=alto endif endif return ref
I also changed something between lines 5 and 14 to calculate the inside bars. I considered up trend any close above "ref" and downtrend any close below "ref". Let me know if it works better.
G
Hi gabri,
great work! I am currently working on this 3 bar trailing stop for trading view and I have coded pretty much the same indicator as you.
But, the original requirement is to start counting at the highest close in an up move (and lowest close in a down move). So in particular once this highest/lowest close is found then apply then find the lowest/highest low of the last three bars which are not an inside bar.
The result would be an indicator the keep a bigger distance from the price action when the price moves sideways and does not make new highst/lowest closes.
So far my thoughts are that it is crucial to define first: "When did the up/down move begin!" This could be done by the indicator which you have already programmed. And then take this as a starting point to find the highst/lowest closes to calculate the further progression of the stop.
I haven't found a way to do so. Would be great I you could think about this an share your ideas!
Thank you in advance!
Hi. Has anyone coded a version that you could alter it to say 5 bar trailing stop? ie make the number of trailing bars a variable?