The SVESC strategy is a sample technical indicator decribed by Sylvain Vervoort in his article for the Technical Analysis of Stocks and Commodities magazine. The author emphasizes that this strategy is shown for educational purposes only.
In order to simulate Buy and Sell orders, the strategy calculates three averages: one of hlc3 (arithmetic mean of high, low, and close), one of Heikin Ashi ohlc4 (arithmetic mean of Heikin Ashi open, high, low, and close), and one of the close price. The simulated orders are added upon the following conditions:
Buy Auto. Average hlc3 price rises above the average Heikin Ashi price at a bullish bar.
Sell Auto. Average hlc3 price falls below the average Heikin Ashi price at a bearish bar.
- Buy To Close. There is a short position and the close is greater than both its average value and the open.
Sell To Close. There is a long position and the close is less than both its average value and the open.
||The number of bars used in the calculation of averages of hlc3 and Heikin Ashi prices.|
The number of bars used in the calculation of the close price average.
||The average of hlc3.|
||The average of Heikin Ashi ohlc4.|
||The average of the close price.|
||A histogram that illustrates how the simulated orders are added.|
1. "Exploring Charting Techniques: Creating A Trading Strategy" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, October 2014.