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Guy,
Thanks for the additional info on Raff Regression channels. I'll play
with your methodology over the next few days. I do think I've been stopped
out too many times when I should have stayed in, so I'm really interested
in your method.
Let me know if your thought on RSI works out. I'm leaning more and
more to trend lines and channels and less and less to oscillators. I just
seem to get way too many false signals from the oscillators.
Jim
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From: Guy Gordon <gordon@xxxxxxxxxxx>
To: metastock-list@xxxxxxxxxxxxx; JimGinVA@xxxxxxx
Subject: Raff Regression on IOM example
Date: Thursday, July 31, 1997 3:18 AM
Another example of using the Raff Regression channel.
(See previous message on QNTM).
I have posted my chart for Iomega Corp.
http://www.white-crane.com/iomg.htm
In this chart my Raff channel runs from 3/17 to today, 7/30.
The 26-day Moving Average (dotted red line) is not long enough to
smooth out the large, slow swings in IOM price. Luckily, we have
enough data for the 50-day MA (solid red line).
Note that I did not start the Raff channel at the trend reversal day
of 3/25. Nor did I start it on 3/11, where the centerline would be on
a price bar. I placed the end on 3/17 in order to make the Raff
parallel to the 50-day MA.
To make this easier, I drew a Linear Regression Line over the 50-day
MA. (When you draw the line, MetaStock will ask you if you want to
use the IOM data, or one of the Moving Averages.) I drew the LRL only
over the part of the 50-day MA that is straight. (Say, from mid May
trough today.) Then I set the LRL to extend both left and right.
That made it easy to manipulate the Raff start point to force the Raff
channel to be parallel to the LRL of the 50-day MA. Then I erased the
LRL.
Notice that the Stochastic(9,4,4) has given *excellent* BUY signals
for IOM since the latest trend started. And the RSI(9) his given
great SELL signals, most of which are confirmed by the Stochastic the
same or the next day.
Hey, Jim: to get BUY signals from the RSI, how about charting a
long-period average of the RSI, and buy when it crosses on the way up?
Just a though. I'll check it out.
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