Fat Tails or anyone that uses regression channels,
What do you recommend for your regression channel indi for daily and 60 minutes (length and SD)?
Just something to start, then I will play around with it.
This post has been selected as an answer to the original posters question
First, when using any regression channel indicator, be careful. It looks nice, but it redraws the channel with every bar. So the regression line was not there in the past, when price action was hitting it, but it was readjusted with hindsight.
To understand the difference:
(1) The first chart shows the elegant regression channel.
(2) The second chart uses exactly the same regression analysis, but without readjusting (repainting) the channel with hindsight. So the second chart displays the information that was known when the price bar was painted without redrawing! It actually shows the trajectory of the right end of the linear channel.
So you should first decide, whether you want to use the linear channel or the bands!
I use a period between 35 and 65 for the center line, and a standard deviation factor of 3 or 3.5 for the trend channel lines. That applies to both indicators, as they perform the same calculations.
Last edited by Fat Tails; December 8th, 2010 at 12:59 PM.
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