Custom Formula Collection

Pathfinder Trading System

To recreate the Pathfinder currency trading system (described in the October 1996 interview with Nelson Freeburg) in MetaStock for Windows, open two charts, one of the desired currency and the other of Treasury bonds. For this example, I used the Swiss Franc. Choose Tile from the Window menu so both charts are visible. Drag the T-bonds price bar and drop it on the heading of the currency chart. Your currency chart should now have T-bonds plotted in the top inner window of the chart. Click on the T-bonds plot in the currency chart so it's selected (that is, little squares appear on the price bars). You will need to select the T-bonds plot each time before running a system test. The selected plot tells the MetaStock System Tester what to use for "P". Next, choose System Tester from the Tools menu, and then New to create a new system. Enter the following system rules, stops, and options and then run the test.

System name: The Pathfinder Trading System

Enter Long:
Mov(C,6,S) >
Ref(Mov(C,6,S),-1) AND Mov(P,3,S) >
Mov(P,25,S) AND Alert(Cross(Mov(C,9,S),Mov(C,18,S)),10)

Close Long:

Enter Short:
Mov(C,6,S) <
Ref(Mov(C,6,S),-1) AND Mov(P,3,S) <
Mov(P,25,S) AND Alert(Cross(Mov(C,18,S),Mov(C,9,S)),10)

Close Short:

Maximum Loss Stop:
Long and short positions maximum loss of 0.016 points.

Initial equity:
Points only

Long and short

Trade Price:

Trade delay:

Note that the maximum stop loss amount should be changed to 0.032 for the British Pound and 0.02 for the Australian and Canadian dollars when testing these contracts.

For additional help with formulas, please see the Formula Primer.

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