The Detrend is a canned Tradestation function that generates a zero line based overbought/oversold oscillator. I've expanded application of the default Detrend function to create a simple system with my usual fixed bar exits. Perhaps surprisingly, the Detrend returned a very nice equity curve with very limited risk exposure and a great max consecutive loser ratio. How well the Detrend works with other ETFs and stocks remains to be uncovered by my loyal cadre of testers, but this inital run on the Qs is hard to fault. I've used the detrend indicator signals before with moderate success, but in my recent exploration of zero line based systems this is a keeper and will be added to the Dirty Dozen.
Just to help non-TS users understand what the Detrend is all about, here's a breakdown of the function logic and settings:
Below is the TS2000i code for the Qs Detrend system. Note how the fixed exit on the longs is less than half of the shorts . . . reflecting clearly the downward momentum of the Qs over the 16 month test period. This notion is also supported by the relative distance of the long and short entries thresholds from the zero line required to trigger the trades.
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