linear regression/statistical analysis

[ronfalcone]

anyone using LR channels for trading? There's an approach that uses LRC's set at 23 periods and standard deviations of 1, set up with a 4 chart view of 15,5,3 and 1 minute time frames. Supposedly, when the price line and MA's move up toward a channel in all time frames, that signals a high probability trade, and vica verca for a short trade.

Just looking for feedback. Proponents of this method keep signing its praises, but I have yet to verify its accuracy.

Happy trades,
Ron

 

[eddyjo]

Hi. yes i use LRC with prophet charts.
eddy

 

[The General]

eddy,

you find it useful then ?

 

[eddyjo]

Yes very useful as a reference telling you when the price deviates from the equilibrium and by how much, I think a standard dev of 2 is better than 1, some people use the R squared indicator with it.

 

[des44]

It sounds alot like the good 'ol Bollinger bands to some degree.

d-

 

[ronfalcone]

actually, they are somewhat similar to Bollinger's in that they both measure standard deviation. The major difference being, however, that LRC's are a straight line measurement and don't conform to price change as obviously as BB's do. Mel Raiman's Precision Trading Course uses an LRC setting of 23 periods with standard deviation of 1, in multiple time frames (15,5,3, and 1) I believe. Trader's then wait for crossovers and crossunders using multiple screens to determine best likelihood of a rotation back to the mean (middle) regression line. Remember, LRC's are statistical analysis and supposedly one step ahead of technical analysis though to be honest, I still haven't found the real key as to how they are best used. Ron, Sanford, FL

 

[des44]

Interesting.

d-

PS. How's sunny Florida? Rainy and cold here in Indiana.

 

[ronfalcone]

re:Florida

Interesting.

d-

PS. How's sunny Florida? Rainy and cold here in Indiana.

Cloudy and about 80. Was chilly the other night though---way down to 50! Not normal

 

[eddyjo]

I find that they are suited to swing/position trading, waiting for the price to turn from the limits of the channels on a 3or 6 mth/daily chart throws up some good signals, I use a 20ma for S/R.
lets hear how others use them.

Eddy.

 

[ronfalcone]

LRC's

I find that they are suited to swing/position trading, waiting for the price to turn from the limits of the channels on a 3or 6 mth/daily chart throws up some good signals, I use a 20ma for S/R.
lets hear how others use them.

Eddy.

do you use channels or just linear trendlines? If so, what settings? I use Prophet.net, and while it allows me to set the channel in percentages (50%, 100% etc.), it doesn't let me set them according to periods like MA's. Any suggestions?

Ron

 

[eddyjo]

Hi Ron, I use the channels i find the 100% works ok for me, you are correct you are given a set period i believe it is a 14period. have a look at a daily chart with candlesticks.
Eddy.

 

[TheBramble]

Linear regression - VWAP?