EdgeWare FastBreak Standard Version 6.5 - Manual (Page 49)

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This option will prevent the purchase of a fund that is not increasing in price at an annual-
ized rate defined by the user. In the above example, if the user does not want to purchase
a fund that isn’t increasing at an annualized rate of at least 8% over the past 50 market
days (Mkt Days), this option will prevent buying a fund. A reason for using this option is
that the user may prefer to go into a money market that has an equivalent annualized rate
of return without the associated market risk.
Correlation Buy Filter
This option will prevent purchase of a fund that is too highly correlated with an index.
The index used to calculate the correlation is specified on the Funds/Index Tab. The most
common index used is the S&P 500 but any index, fund, or FNU file can be used. This
option allows users to build trading systems that have low correlation with the market.
There are two parameters for this option. A correlation value, which can vary from –1.0
to +1.0, and a period over which the correlation is calculated (recommended range is 50-
100 days). A correlation of 1.0 would be a perfect correlation with the specified index. If
the correlation is set to a very low value the strategy may be unable to find a fund suitable
for purchase. If that is the case, the money market fund will be purchased
Exponential Moving Average Buy Filter
Many investors use a moving average (EMA) to help confirm that a fund is in an up trend
prior to purchase. A fund’s NAV must be trading above its EMA, with the length of the
EMA defined by the user. A common value used is a 50 day moving average.
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RSI Buy Filter
Many investors use the RSI to help confirm that a fund is in an up trend prior to purchase.
A common value used is a trigger of 50 days measured over 14 market days.