The Easy Language Code can be divided into different parts:
1. Definition of inputs and variables
2. Time filter (discussed below in 3.4) 3. Entry and exit setup Since this first section of this chapter focuses on the entry logic we have put the exit part of the trading system in the Easy Language Code in brackets. This means that fir st we leave the exits out and only take the entries from this system. Later in this ch apter we use these entries and apply our own exits to them. The entry logic Now let s explain what this code means for the construction of the entries (Figure 3 .1). The entry is based on a usual moving average system and works as following: you enter the market long on the bar where a fast moving average crosses above a slow movi ng average and in the same way you go short if the fast moving average crosses belo w the slower moving average. Trend following methods like these are well known to be able to capture huge pro fits during long steady trends. The LUXOR entry logic takes this basic idea of such t rendfollowing methods by just using two simple moving averages as an entry signal ge nerator. However it is modified in the following way: an entry after the average crossove r is only allowed after a confirmation of the price itself occurs. The crossing of the mov ing average alone is not enough to initiate a market position. In case of a long entry you w ant the current price to exceed a recent high to enter a trade (Figure 3.1). Analogously the price must go below a recent low to trigger a short entry. Please note that we only ex plain here the long side in the system code since the short entries are built symmetrically .