The AIQ code based on John Ehlers & Ric Way’s article in the march 2012 issue of Stocks & Comodities, “Introducing SwamiCharts,” is provided at www.TradersEdgeSystems.com/traderstips.htm.

Note that I did not attempt to replicate the SwamiCharts as displayed in Ehlers & Way’s article mainly because I am not a discretionary trader but rather focus on mechanical systems. I wanted to take the concept of multiple parameter sets for an indicator and see how this concept could be used in a trading system.

I decided to try a long-term trend-following system trading the NASDAQ 100 list of stocks using moving averages of various lengths. I created an indicator that uses five simple moving average lengths (10, 20, 50, 100, 200). If the close is above the moving average, then it gets a value of +1; otherwise, it gets a value of -1. I then simply sum the five values from the different lengths to create the SMA_SWAMI indicator. I then created a system with the indicator by entering long when the indicator is greater than or equal to 4 and exit when it drops to less than -4. I didn’t test the short side of the system, only the buy side. The code to test the short side is provided but was not tested.