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Your timing is convenient since I have been testing
a regression channel system in StockWiz (free at
http://www.stockwiz.com/ )
And was reading some interesting ideas on trend
and channels this week-end. I was reading Tushar
Chande's book "The new technical trader". He
discusses (starting on page 19) a "r-squared"
indicator to determine trendiness of a stock
a linear regression to determine slope for
a good trade.. "r-squared" is the coefficient of
determination.
I recommend you read that book. I'm wondering
about programming that "r-squared" indicator
into Metastock or StockWiz for backtesting.
Perhaps it would be easier to use the Correlation which
exists in Metastock (though this seems
awkward)?
-M
At 09:35 PM 5/5/97 GMT, Guy Gordon wrote:
>Does anyone else out there engage in "channel trading"?
>
>The strongest predictive force I have found in stocks is the tendency
>to trade inside channels (between support and resistance lines.)
>
>This lead me to buy PAUH this morning at 13 3/8. (I was a little late
>on this buy. I should have gotten in at 12 7/8 on Thursday.) PAUH is
>up 16% today, and I am already looking to sell.
>
>An even better example is ANAD, which I bought at $24, and sold at $33
>1/2 ten days later. QNTM is another good example, reaching the top of
>its channel soon.
>
>My biggest problem is avoiding stocks that fall out of their channel.
>This happened a lot in the three month correction we just went
>through.
>
>So, does anyone else use this method?
>What stocks are you watching now?
>How do you avoid tend changes?
>
>
>
>
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