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I'm using a different approach to the problem of Raff Regression
Channels. First, I require the channel to be parallel to a similar
length moving average. If I can't make it come out parallel to an MA
by moving the start and end points I just don't consider it valid.
Second, I try to keep the start and end points inside a days trading
range. In other words, I never start or end on a high or a low. I
always put the endpoint on a price bar that crosses the middle of the
channel.
Still, it's too subjective. Mostly I just use it to verify the slope
of my "hand-drawn" channels.
Also, MetaStock messes up Linear Regression lines (including the Raff)
when you use a semi-log Y axis and you try to stretch the line too
far. And I *always* use semi-log charts!
I reported this to Equis support, and did not receive a satisfactory
reply. The problem is simply that a straight line in the linear
coordinate system is not a straight line in the semi-log one. But
they have no interest in fixing it. Maybe I'll try talking to them
about it again.
On Wed, 11 Jun 97 16:21:59 UT, you wrote:
>Alan,
> I still prefer to draw my intermediate and long term trend lines the
>Trader Vic way and then make my channels with a parallel line at the opposite
>extreme since there is no ambiguity in drawing such channels. For short term
>channels, I have been using Raff Regression Channels because they usually
>result in fewer false breakouts. As you indicated, the problem with Raff
>Regression Channels is to decide where to start and end them. For up
>channels, I start them at the lowest low in the period I'm looking at which is
>usually the low just before a down trend break out. I end them at a high and
>then extend them to the right. If the current close is not a new high, I
>don't change anything. If the current close is a new high, I stretch the end
>of the channel to the new high. However, for the channel to be valid, I
>require at least one higher low from the first low followed by a new high.
>The problem is to subjectively decide if there was enough of a pull back for a
>good higher low <G>. Downtrend channels are just the mirror image.
>
>Jim
>
>-----Original Message-----
>From: Animal Mother
>Sent: Wednesday, June 11, 1997 12:21 AM
>To: metastock-list@xxxxxxxxxxxxx
>Subject: Raff Regression Channels/Andrews Pitchfork
>
>I've been using--and continuing to experiment with--the RRC, without having
>ever read anything in any books about it. I've been using it pretty much as I
>would a typical (which for me is drawn Trader Vic style) trend channel. For an
>up trend, I begin the channel at a reaction low at some point in the past
>(often at a major reversal point) and end it at the most recent reaction low.
>I reverse this for down trends. I've experimented with starting at the low,
>and ending at a recent high, with sort of blechy results. . . .
>
>I'd like to know how others draw these channels.
>
>Also, anyone use Andrews Pitchforks? All I know I read in a very superficial
>TASC article a few months back. The only time I seem to get decent signals is
>when prices make tidy minor reactions. Any experiences/hints here?
>
>I like using trendlines to trade. In fact, I haven't found any of the
>esoteric indicators (R-Squared, Slope) to give better signals (worse, in fact,
>since I never got them to work for me) than a combination of MA's (I use 5,
>13, 21, 55), trendlines, and a momentum indicator, either MFI, ROC, or RSI,
>whichever has been giving the best signals most recently for any given stock.
>I sometimes check one momentum indicator against the other--they aren't all
>the same, regardless what the books say, especially when volume is in the
>formula.
>
>I look forward to reading some of your responses.
>
>
>Alan M.
>___________
>
>"Better you than me."
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