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Marc,
I got an error message after I decoded your LSI file, so I couldn't view
it. Looking at my LSI chart, yes that's the type of trend channels we have
been talking about. Yes that's how I draw my channels, except I use Raff
regression channels for short term channels. The intermediate term trend will
be in the direction of the long term trend some of the time. I trade the
shorter term trend when it is in the direction of the longer term trend. If
the longer term trend is up, and the shorter term trend has been down, but the
stock price just broke out of the down term trend, that's one entry point. If
the shorter term trend and the longer term trend are both up, entry points
occur whenever the stock price bounces off the bottom of the shorter term
trend. Stops should be set just below the shorter term trend channel.
Targets should be set just below the top of the longer term trend. Covered
calls can be sold near the top of the shorter term trend channel. The
position should be closed or covered sold when targets are hit. The position
should always be closed when stops are hit.
Jim
-----Original Message-----
From: Marc Saegesser
Sent: Sunday, June 08, 1997 5:43 PM
To: metastock-list@xxxxxxxxxxxxx
Subject: LSI Channel
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Content-Type: text/plain; charset="us-ascii"
There has been a call for a return to discussions about TA and Metastock.
To that end I've attached the chart for LSI to start discussion about
channel trading. I'm new to this type of analysis so I thought I'd throw
this out here for discussion.
I've drawn two upward trends: a long term trend starting 7/24/96 and an
intermediate term trend starting on 1/2/97. The intermediate term has a
slightly higher slope than the long term trend. To create the channel I
used a copy&paste to create a new line parallel to the trend line and then
dragged so that it just touched the highest high.
So now some questions for channel traders:
1) Is this the type of chart formation you're looking for?
2) Is this how you draw your trend lines and channels?
3) Is it common for the intermediate trend to be in the same direction as
the long term trend?
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