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Dan,
I agree with you. I prefer more comments rather than less. They're easy to
delete if they are not of interest.
Tom
At 05:48 PM 11/18/98 -0500, you wrote:
>The comments of Mr. Fiedor are unnecessary. There are several of us who
>find Jim's words to be thoughtful and helpful. We ASKED him to expound on
>his strategies. If someone doesn't appreciate what he has to say, the the
>affected person need only move on without comment. Not every message is
>going to be helpful to every person.
>Dan
>
>-----Original Message-----
>From: bill fiedor <wfiedor@xxxxxxxxxxx>
>To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
>Date: Tuesday, November 17, 1998 9:26 PM
>Subject: Re: Building Blocks - Charts, Trendlines, & Channels
>
>
>>Wordy people are wishfull people [bill fiedor]
>>
>>Jim Greening wrote:
>>
>>> All,
>>> Before I discuss trend lines and channels as I promised, I want
>>> to say a few words about the type of charts. Most people use H,L,C
>>> bar charts for their charting. I don't, I use CandleVolume charts. I
>>> always thought that having an arbitrary time period such as a day for
>>> the x axis of a price time chart didn't make a lot of sense. When
>>> Arm's wrote his EquiVolume book back in the 60s he made his x axis a
>>> function of volume per unit time. This made a lot of intuitive sense
>>> to me. The more volume in a given trading period, the wider the bar.
>>> I've been using volume based charts every since then. When MetaStock
>>> started using CandleVolume charts I switched to them. In CandleVolume
>>> charts, the width of the candle is a function of volume, just like
>>> Arm's equiVolume charts. I thought the additional information on the
>>> candlestick should be valuable, although I'll be the first to admit
>>> that I have never gotten any consistent results based on only
>>> CandleStick patterns. I keep using CandleVolume charts because I like
>>> the way they look and maybe, just maybe, I'll run across that magic
>>> pattern some day <G>.
>>> The reason I go into this, is that if you are using trend lines
>>> or channels for signals, you will get different signals and different
>>> results with H,L,C bar charts and CandleVolume charts. I'm very
>>> comfortable using CandleVolume charts and happen to think that they
>>> give better results than H,L,C bar charts. Having said that, I also
>>> have to say that I have absolutely no proof of that. I've never done
>>> a systematic study and haven't seen any done by others. But I feel
>>> they are better and it's important to go with what you believe <G>.
>>> For constructing trend lines I prefer Trader Vic's methodology.
>>> For a Trader Vic up trend line, start with the lowest low in the
>>> timeframe being considered. Draw a line to a low before the highest
>>> high in the time frame and extend the line to the right. It's
>>> important that you pick the right low to draw the line to. It must be
>>> before the highest high in the timeframe and it must be the one low
>>> that will allow you to draw a line that doesn't intersect any data
>>> before the highest high. A down trend line is just the mirror image.
>>> You start with the highest high in the timeframe being considered.
>>> Draw a line to another high before the lowest low such that the line
>>> does not pass through any data and extend the line to the right. To
>>> construct the trend channel, draw a parallel line on the other side of
>>> the data that only touches the data at the extreme point. That is it
>>> doesn't intersect any other data points. This is easy with MetaStock.
>>> You can hold the CTRL key down, then hold the left mouse key down once
>>> you are on the original line and drag a parallel line to where ever
>>> you want it.
>>> I use these Trader Vic type channels for my long (years) and
>>> intermediate term (few months to over a year) channels. I use the
>>> channels to get my buy signals and set my stops. If they are wide
>>> enough, I may even use them for setting my targets, but that will be
>>> the subject of a later post. Right now I want to just concentrate on
>>> how I construct my trend channels. There is a problem with using
>>> Trader Vic type channels for Short term (days to few months) channels.
>>> That problem is that you will tend to get too many false breakout
>>> signals for a data set that hasn't gone through one or two significant
>>> corrections. To try to overcome this problem for short term channels,
>>> I use the Standard Deviation channels built into MS6.5. The problem
>>> with this type of channel is to know where to start and end your
>>> channel. I did not want this to be arbritary, so after some
>>> experimenting, I decided on the following. For up trend channels, I
>>> start my channel immediately to the left of the lowest low in the
>>> timeframe being considered just like Trader Vic. Then I end my
>>> channel immediately to the right of the highest high in the time frame
>>> being considered. Initially, I set the deviation at 2 and extend the
>>> channel to the right. Anytime a new high is hit, I'll drag the right
>>> end of the channel just to the right of that new high. As soon as I
>>> get a decent reaction in the stock data, I'll check to see if I should
>>> change the deviation. I'll use 1, 1.3, 1.5, 1.8, or 2 for the
>>> deviation, using the lowest number that will bound all the data
>>> between the end points without intersecting any. After a few months
>>> with at least two good reactions, I switch to Trader Vic type trend
>>> lines.
>>> That's it. That's the way I construct my trend channels so there
>>> isn't any arbitrary settings. Any questions or suggestions?
>>>
>>> JimG
>>
>>
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