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Hi Gail, Lionel,
Do you live in England or Europe? I mostly get your mails during the day-time.
> ... the pitchfork ... seemed a bit subjective and hocus-pocus.
Right-oh, Andrews' Pitchfork (AP) is *completely* subjective because its start-
& endpoints are set at the user's discretion, and have nothing to to with
anything else on the chart. The only predetermined feature is that the 'tines'
are equidistant from the middle line. Once again, AP is nothing but a hand-drawn
trendline with 2 parallels thrown in as an extra. I'd guess that the
"hocus-pocus" impression you got, results from the less than intuitive interface
the thingy has.
> I presently use the linear regression channel set at about 1
> standard deviation. (Yes, this is a subjective setting) If the stock is
> very volatile I'll use a higher std dev, say 1.5. This gives me a channel
> that includes most or all of the highs and lows.
Of course any StdDev you set is subjective, and one should always be aware of
that. Btw, in this regard Raff's Regr. Channel *is* objective because it ensures
that every close is inside the channel. In danger of becoming repetitive
however, let me say once again that I stopped using the Regression Channel
because of its built in supposition that deviations from the regression line are
equally probable to the upside as to the downside. Mathematically this is
certainly true, in practice, however it is not. Taking my que from Mr. Raff I
start regarding a channel as possibly valid when the borders have been touched
three times, eg. the upper line twice & the lower one once - or vice versa. When
using a Regression Channel one generally has to wait too long.
> ... an alternative to linear regression, called the equal error or Chebyshev
> (Tschebyshev?) line. ... Have you any experience with Chebyshev equal error
> lines?
No, Ive never heard of them, and I'd rather stick to the least squares method
because it's mathematically correct, and as you imply, easy to do on a computer.
Finally allow me to direct a QUESTION to all users of "LINE STUDIES" that was
prompted by Mr. Maas' grievances against Channels in MS. Fact is, that one
*cannot* have Metastock draw straight lines automatically although users have
been clamouring for them time and again; eg. the automatic drawing of flags,
triangles etc. As I don't think it would have been overly difficult to program
such a feature - tying trendlines etc. to reversal points in the Zig-Zag
indicator for instance - I assume Equis intentionally left it out. And maybe
this decision was right because we all know the fickleness of the zig-zag
indicator. I for one would certainly hate to see may 'pictorial analyses' of an
equity change from day to day.
So, what do you think, would automatic trendlines, flags, banners and the like
be a desirable feature for a future release of MetaStock or not?
Kind regards & happy trading to ye all,
Jan Willem Roberts
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