Wednesday, May 20, 2009

Turtles, Snails and Tropical Fish with Thinkscript

This one is for Steve A.

Well maybe not the snails and tropical fish. Tonight we'll take a look at the Turtle Trading System.

My very good friend Cho Sing Kum has a very detailed article about the World renouned Turtle Trading System. Please take a minute to review his article

Cho does use Tradestation but he is a nice guy so don't get too mad at him. Let's cut his logic over to ThinkOrSwim! Here are a couple of variations on the Donchian Channels. I run them both at once. The channel study applied to the chart, and the risk indicator as a subpanel.

Create 2 seperate studies and apply them both to the same chart. The 1 minute is most reliable.

declare upper;
input length = 20;
plot topBand = Highest(high[1], length);
plot bottomBand = Lowest(low[1], length);
plot centerBand = (topBand + bottomBand) / 2;


Risk tolerance
Let's say you only wanted to risk $1000 on a Emini trade.
Enter cash=$1000 and this lower study will show you breakout channels based on your risk tolerance. Make sure that the 'Length' variable is the same in both studies.
Awesome free thinkscripts for thinkorswim!

declare lower;
input length=20;
input cash =1000;
input valueLine = 500;
plot channel = (Highest(High,length)[1]-Lowest(low,length)[1])*cash;

plot data1 = cash;
plot data2 = valueLine;
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