To implement Dennis Peterson’s Stochastic RSI and Bollinger Band trading system in the NeuroShell Trader, you should first create the weighted price, Bollinger Bands and Stochastic RSI indicators in a chart and then create a Trading Strategy based upon those indicators.
To create the weighted price, Bollinger Bands, and Stochastic RSI, select ‘New Indicator …’ from the ‘Insert’ menu and use the Indicator Wizard to create each of the following:
wprice:
Avg4( Close, Close, High, Low)
bbtop:
BollingerBandHigh( wprice, 14, 1.625 )
bbbottom:
BollingerBandLow( wprice, 14, 1.625)
StochRSI:
SimpleStochastic%K( RSI( Close, 14), 14)
To create the Stochastic RSI and Bollinger Band trading system, select ‘New Trading Strategy …’ from the ‘Insert’ menu and enter the following long and short entry conditions in the appropriate locations of the Trading Strategy Wizard:
Generate a buy long MARKET order if ALL of the following are true:
A<B( Subtract( AbsoluteValue ( Divide( Sub ( wprice, bbbottom), Sub ( bbtop, bbbottom))), 0.9), 0.3)
A>B( Mult2 ( Close, 1.05 ), bbtop )
A>B( Volume, SelectiveLag( Volume, A>B( Close, Lag(Close,1)), 1 ))
A>B( StochRSI, 0.3 )
A>B( Divide( Subtract( Close, Open), Subtract( High, Low)), 0.2 )
Generate a trailing stop order at the following price:
Trailing Price Percent ( Trading Strategy, 5 )
Generate a sell short MARKET order if ALL of the following are true:
A<B( StochRSI, 0.7 )
A<B( AbsoluteValue ( Divide ( Subtract (wprice, bbtop), Subtract( bbtop , bbbottom))), 0.8 )
A>B( Close, Multiply ( 0.95, bbtop ))
If you have the NeuroShell Trader Professional, you can also choose whether or not the system parameters should be optimized. After backtesting the trading strategy, use the ‘Detailed Analysis …’ button to view the backtest and trade by trade statistics for the trading system.
File Download