Registered User
Joined: 12/7/2004
Posts: 22
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Hi: I enjoyed the video on channels, envelopes and bands. I've set up a 20/15 linear regression channel on one tab and a 20/15 envelope channel with a 20 dat MA on another tab. The question is this what, if any, is the relationsghip between the 20 day MA on the envelope channel and the center line on the linear regression channel. Also, what is the significance of the three lines on the linear regression channel? Do they relate to the three lines on the envelope with the MA? Thanks.
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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They relate in that they are both using price to determine their value. Both channels take the center MA or LR and duplicate them above and below based on a standard deviation of the price.
Moving averages are averages of what they are plotted on. Linear Regression lines are "best fit" straight line averages for the period. I feel that envelopes and linear regression channels are useful for spotting stocks outside their "normal" range.
I hope this helps.
- Craig
Here to Help!
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