EdgeWare FastBreak Standard Version 5 - Manual (Page 8)

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ƒ Stop loss using a short/long Exponential Moving Average (EMA) crossover. This
is similar to the current EMA stop except that the fund NAV is smoothed with a
short term EMA.
ƒ Buy filter using a short/long Exponential Moving Average (EMA) crossover.
This is similar to the current EMA Buy filter except that the fund NAV is
smoothed with a short term EMA.
ƒ The next four enhancements are all similar in that they allow the user to modify
stop or buy filter options according to market conditions or a user defined input
file. The modification is triggered when an index (or any user defined fund or
FNU file) drops below its user defined EMA line. For example, if the S&P is
used as the index then the parameters are not modified as long as the index stays
above a user defined EMA line. If the S&P falls below its EMA line then a factor
is applied to the standard value. A simple example is that when the market is in a
strong uptrend high beta funds may be a good investment option. However, when
the market is in a downturn or trading market it may be prudent to purchase low
beta funds.
o Adjust the Trailing Stop Loss value based on market conditions or exter-
nal file input.
o Adjust the EMA Stop value based on market conditions or external file
input.
o Adjust the Beta Buy filter value based on market conditions or external
file input.
o Adjust the EMA Buy filter value based on market conditions or external
file input
ƒ Beta buy filter can now be a non-correlated beta as an option. Beta is the ratio of
the volatility of a fund divided by the volatility of an index (typically the S&P
500), multiplied by a correlation value between the fund and the index. If a fund
has a low correlation to the index it can have a low beta but be a very volatile
fund. An example would be a gold fund. Gold funds have a low or even negative
market correlation and yet are very volatile. Filtering on standard beta may not
filter out a gold fund. Using the non-correlated beta filter allows a user to mix a
wide range of fund types including those that may not have a high market correla-
tion value, e.g., bonds, international etc., in a trading family and have the ability
to filter those with high volatility.
ƒ Improved the BOSS stop option to be more effective with some ranking methods.
ƒ Ability to begin the effectiveness of a stop option later than the first day. Previ-
ous versions required the stop to be in effect on the first day a fund was pur-
chased. Some users have the requirement to hold a fund for a fixed number of
days after purchase. They can now start a stop after this number of days.