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Yes, I think of Slope as the direction. The value indicates the degree of
advance/decline. R-squared is a measurement or "presence of trend", as I
use it. I just completed a trade on DD that could paint a picture to aid
in interpretation. If you will pull up the chart DD, open a 23 period
r-squared indicator
(I use the oscillator style of display), then overlay a 13 period slope
(line display), observe the period around 12/29. You will see how the
slope began the decline while "r" was still at a high value. When "r"
began to weaken, with Slope still in a downward movement, the first close
below the lowest low of that period (1-3) made a low risk entry for a short
sale. When Slope turned up for two consecutive days (1-24) and "r" was
above 80, this was, for me, time to cover the short.
I am also using a 23 period slope to observe the 13/23 crossing, but I have
not seen any significant benefit. Actually, I think this confuses the
picture.
As to your comment that Slope moves all over the place, that would suggest
to me that there is very high volatility in that stock,or a tradable trend
is not in place. Please send me a stock symbol so that I may plot what you
are seeing. I am watching TXN, but the Slope signals have been late. But
here again, there is no trend, as I see it. Rather, it is in a trading
range. Again, this is simply way that I use the two indicators.
Al Taglavore
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> From: Sean Taylor <sean.taylor@xxxxxxxx>
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: Trendiness or Congestion measurement - r-squared + Linear
regression Slope
> Date: Sunday, February 04, 2001 11:24 PM
>
> Al,
> I've been trying to combine r-squared with Linear Regression Slope. Not
> always easy determining how to interpret them.
> I know r-squared values below a certain amount mean there is no
statistical
> significance. But with larger numbers, the Slope value can still move all
> over the place. Is it more the direction of the slope rather than the
value
> itself?
> It's probably just trial and error.
> Thanks,
> Sean
>
> ----- Original Message -----
> From: "Al Taglavore" <altag@xxxxxxxxxx>
> To: <metastock@xxxxxxxxxxxxx>
> Sent: Friday, February 02, 2001 11:02 AM
> Subject: Re: Trendiness or Congestion measurement
>
>
> > Consider using 'r-squared' with regression slope; "r" indicating the
> > strength of the trend, sans noise, and the slope to indicate the
direction
> > of the trend.
> >
> > Al Taglavore
> >
> > ----------
> > > From: Sean Taylor <sean.taylor@xxxxxxxx>
> > > To: Metastock List <metastock@xxxxxxxxxxxxx>
> > > Subject: Trendiness or Congestion measurement
> > > Date: Friday, February 02, 2001 9:09 AM
> > >
> > > I've recently re-discovered the quality of the User manual. The
> > > interpretations of various indicators offer useful advise.
> > > Take the Stochastic. I'm looking to use Overbought/Oversold
indicators.
> > > The manual recommends that these work best in non-trending markets
and
> > that
> > > 'r-squared', CMO and VHF might be used to determine this.
> > > I tried r-squared (RSquared(C, 14) <0.27) which improved the system
> > results
> > > significantly. But it does seem to traverse extremes very readily
and
> > give
> > > false signals.
> > >
> > > Are there some favorites out there for indicating congestion or
> > trendiness
> > > and their strength ?
> > >
> > > Thanks,
> > > Sean
> >
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