Nesting functions and the Alert function

With so many functions available in MetaStock, it is important to know that functions can be nested within a function. That is, a nested function can act as another function's data array parameter. Assume you wanted to code the moving average of another moving average. It looks like this:

Mov( Mov( C, 5, W), 20, W)

We will see nesting applied throughout the rest of the course. For now, let's look at the first major function category, analysis tools. Most functions in this category return specific values from a data array: anything from the number of bars since a condition occurred, to the highest value in a data array.

The Alert function

The first function we will study is Alert. It is used in conjunction with other functions to extend a signal for a specified number of periods. In other words, it holds an expression as true for as long as we wish.

Think about Alert with gates and triggers in mind. Using this function we can hold a gate open for a specific period while waiting for a confirming trigger, a vital ingredient in a fully automated system. First, the syntax:

Alert(Expression, Periods)

• Expression: the technical condition you wish to hold true. This is usually your gate.
• Periods: the length of time you wish to hold the expression as true.

Example

The formula below identifies stocks whose volume has been 50% greater than the 21-period moving average of volume, a sign that interest in the stock has increased. By using Alert we extend the life of that condition from one period to five: the volume spike on the initial period provides the same signal for the following five periods.

Alert(V > Mov(V,21,S)*1.5,5)

Broken down:

• Expression = V > Mov(V,21,S)*1.5
• Periods = 5

Application

We can build on this example to show a more useful application:

Mov(C,5,S) > Mov(C,22,S) AND
Alert(V > Mov(V,21,S)*1.5,5)

This formula identifies securities in an uptrend (denoted by the 5-period simple moving average being greater than the 22-period simple moving average) that have also shown a 50% increase in average volume at least once within the previous five periods. Remove the Alert function and both conditions would have to be true simultaneously, which is a much stricter and less realistic requirement. Combined with other functions (such as Cross, later in the course) you will realise its power.

Exercises

Throughout the function lessons there are exercises to practise what we've learnt. They are easily skipped, but they build your MetaSpeak vocabulary. Construct formulas for the following:

1. Keep the expression Cross(RSI(14),30) true for 13 periods.
2. Specify that the volume must be greater than 50000 at any time over the previous five periods.

Next lesson

In Lesson 6 we cover the rules for naming variables, plus two workhorses of custom indicators: the If() function and the Input() function.