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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
.