This is perhaps the simplest afl trading system in which the afl code can be understood by non-programmers also. We carefully define the Buy, Sell, Short and Cover rules; where Short and Cover are symmetrically opposite if Buy and Sell. This helps in smooth integration of this AFL with automated trading systems.
We try to buy when a) prices move upwards fast b) prices move downward fast. Usually the change in prices is compared to change in time. But now we try to compare the change in time with respect to change in price.
Strategy Premise
The Aroon Indicator was given name from the Sanskrit word ‘Arun’ which means early light in morning. This name was chosen by its developer Tushar Chande because it is used to identify emerging trends and reversal movement.The Aroon-up calculates the number of candles since a new high is made, while the Aroon-down measures the number of candles since a new low is made. We use a large Aroon period- 100 to smoothen it for fewer signals.
We try to buy when a) prices move upwards fast b) prices move downward fast. Usually the change in prices is compared to change in time.
Strategy Logic
Buy: Buy Aroon-Up crosses above Aroon-Down
Sell: Sell when Aroon-Up crosses below Aroon Down
When Strategy gives Buy, it will send LE in Call and LX in Put. When Strategy gives Sell, it will send LE in Put and LX in Call.
Amibroker Settings
Step 1: Make sure you have completed Jump Start setup
Step 2: Download AFL from here. In Amibroker, Go to Formula editor and paste the AFL here.
Step 3: Right Click on the chart and go Parameters to adjust the inputs of the strategy.
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