Worden Trainer
Joined: 10/1/2004 Posts: 68 Location: Worden Brothers, Inc.

Author: Sean Wander
Press the Play button on the bottom of the video to start.
keywords: Channel Linear Regression Breakout Indicators Visual Sorting Channel Sort Indicator Sorting Flagging Watchlist Ascending Descending trend reversal change
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Registered User Joined: 10/7/2004 Posts: 4

Great stuff Sean! I just found this. I hope you don't have plans to delete this, as I need some time to work with it.
Thanks.


Worden Trainer
Joined: 10/1/2004 Posts: 18,819

You will not see any of the videos here deleted. Here are some other videos that you may enjoy along the same vein:
Learn to quickly identify when price and volume are in or out of step
Sort using envelopes, regression channels and Bollinger bands
 Craig Here to Help!


Registered User Joined: 12/30/2004 Posts: 33

Hi Sean, A great video! Itried it out and it works fine. You made a statement: "Anytime you have a sort value above a hundred, you have a breakout pattern" I woulld like to understand why that is, how come? Could you please explain it? I would appreciate that. Thanks in advance, MDiep


Worden Trainer
Joined: 10/1/2004 Posts: 18,819

I believe he is defining a break out as any stock closing above the top of the LR channel. Technically these stocks would be breaking out of the channel but may not be a "break out" as we sometimes think of them.
 Craig Here to Help!


Registered User Joined: 12/30/2004 Posts: 33

Yes, I meant a breakout out of the LR channel, but what is then the realationshiop of the sort value of 100? Which formula is in effect here? MDiep


Worden Trainer
Joined: 10/1/2004 Posts: 4,308

Whenever you do a channel sort (such as with linear regression channels), values of zero means the stock is closing right at the linear regression line. Stocks returning values of 100 are closing 1 channel width above the linear regression line...in other words, right at the top channel line. Values above 100 mean the close is currently above the top channel line. For instance, if a stock returns a value of 200, the close is currently 2 channel widths above the linear regression line...300 would be 3 channel widths above the linear regression line.
The negative numbers work as well. 100 is one channel width below the linear regression line...200 is 2 channel widths below, etc..
 Doug Teaching Online!


Worden Trainer
Joined: 10/1/2004 Posts: 18,819

Think of the number as a percentage of the channel width. One channel width is the distance from the center to the top of the channel.
A stock that returns a value of 110 is 110% of a channel width from the center. If the top of the channel is 100% of a channel width from the center then your stock is farther from the center.
Make sense?
 Craig Here to Help!


Registered User Joined: 12/30/2004 Posts: 33

Doug and Craig, All right! That explains it for me, the light went on (lol). Thanks a bunch, that is very helpful since I like the LR channel, but never noticed this. Many thanks, MDiep


Worden Trainer
Joined: 10/1/2004 Posts: 4,308

You're welcome, MDiep! It's a pretty cool technique! Glad you got it working for you.
 Doug Teaching Online!


Registered User Joined: 11/24/2004 Posts: 11

I have used the same criteria and settings that you use in the video but a lot of the results show assending LR lines. Am i doing something wrong? Thanks


Worden Trainer
Joined: 10/1/2004 Posts: 18,819

Be sure you are sorting by the SLOPE of the LR channel and that you are flagging the right ones. I think you are missing a step. When you sort by a channel, it does not default to the slope method, you must change it.
Watch the video again, pause at each step and try it, and you should see where you are missing a step.
 Craig Here to Help!


Registered User Joined: 5/3/2005 Posts: 11

great job!! is there any way to put this in PCF?


Worden Trainer
Joined: 10/1/2004 Posts: 4,308

PCF's for linear regression lines can be quite complex. Please check out the following thread to get some idea.
Linear Regression for a past date
You can also do a search of the forums to find additional information about linear regression PCF's.
I do think the sorts described in the video are really the best way to accomplish finding trend changes with linear regression lines.
 Doug Teaching Online!


Worden Trainer
Joined: 10/7/2004 Posts: 65,138

fsyong, The video outlines a technique that can be easily adjusted. While not as simple to set up, it is possible to produce the exact same list of symbols as produced in the video using two Personal Criteria Formulas as EasyScan conditions. Once it is set up, it should usually require less time and work on a daytoday basis, but it is fairly complicated to adjust the Linear Regression.
LR Slope (50Period): (24.5*C +23.5*C1 +22.5*C2 +21.5*C3 +20.5*C4 +19.5*C5 +18.5*C6 +17.5*C7 +16.5*C8 +15.5*C9 +14.5*C10 +13.5*C11 +12.5*C12 +11.5*C13 +10.5*C14 +9.5*C15 +8.5*C16 +7.5*C17 +6.5*C18 +5.5*C19 +4.5*C20 +3.5*C21 +2.5*C22 +1.5*C23 +0.5*C24 0.5*C25 1.5*C26 2.5*C27 3.5*C28 4.5*C29 5.5*C30 6.5*C31 7.5*C32 8.5*C33 9.5*C34 10.5*C35 11.5*C36 12.5*C37 13.5*C38 14.5*C39 15.5*C40 16.5*C41 17.5*C42 18.5*C43 19.5*C44 20.5*C45 21.5*C46 22.5*C47 23.5*C48 24.5*C49)/10412.5
LR Channel Sort (50Period): 20000*(C (AVGC50 +24.5*(24.5*C +23.5*C1 +22.5*C2 +21.5*C3 +20.5*C4 +19.5*C5 +18.5*C6 +17.5*C7 +16.5*C8 +15.5*C9 +14.5*C10 +13.5*C11 +12.5*C12 +11.5*C13 +10.5*C14 +9.5*C15 +8.5*C16 +7.5*C17 +6.5*C18 +5.5*C19 +4.5*C20 +3.5*C21 +2.5*C22 +1.5*C23 +0.5*C24 0.5*C25 1.5*C26 2.5*C27 3.5*C28 4.5*C29 5.5*C30 6.5*C31 7.5*C32 8.5*C33 9.5*C34 10.5*C35 11.5*C36 12.5*C37 13.5*C38 14.5*C39 15.5*C40 16.5*C41 17.5*C42 18.5*C43 19.5*C44 20.5*C45 21.5*C46 22.5*C47 23.5*C48 24.5*C49)/10412.5))/(ABS(C48 AVGC2.48) +ABS(C47 AVGC3.47) +ABS(C46 AVGC4.46) +ABS(C45 AVGC5.45) +ABS(C44 AVGC6.44) +ABS(C43 AVGC7.43) +ABS(C42 AVGC8.42) +ABS(C41 AVGC9.41) +ABS(C40 AVGC10.40) +ABS(C39 AVGC11.39) +ABS(C38 AVGC12.38) +ABS(C37 AVGC13.37) +ABS(C36 AVGC14.36) +ABS(C35 AVGC15.35) +ABS(C34 AVGC16.34) +ABS(C33 AVGC17.33) +ABS(C32 AVGC18.32) +ABS(C31 AVGC19.31) +ABS(C30 AVGC20.30) +ABS(C29 AVGC21.29) +ABS(C28 AVGC22.28) +ABS(C27 AVGC23.27) +ABS(C26 AVGC24.26) +ABS(C25 AVGC25.25) +ABS(C24 AVGC26.24) +ABS(C23 AVGC27.23) +ABS(C22 AVGC28.22) +ABS(C21 AVGC29.21) +ABS(C20 AVGC30.20) +ABS(C19 AVGC31.19) +ABS(C18 AVGC32.18) +ABS(C17 AVGC33.17) +ABS(C16 AVGC34.16) +ABS(C15 AVGC35.15) +ABS(C14 AVGC36.14) +ABS(C13 AVGC37.13) +ABS(C12 AVGC38.12) +ABS(C11 AVGC39.11) +ABS(C10 AVGC40.10) +ABS(C9 AVGC41.9) +ABS(C8 AVGC42.8) +ABS(C7 AVGC43.7) +ABS(C6 AVGC44.6) +ABS(C5 AVGC45.5) +ABS(C4 AVGC46.4) +ABS(C3 AVGC47.3) +ABS(C2 AVGC48.2) +ABS(C1 AVGC49.1) +ABS(C AVGC50))/3
EasyScan Conditons Watchlist: Nasdaq 100 Component Stocks Linear Regression Slope: Value: Min to 0.01 (or the smallest available negative value) LR Channel Sort: Value: 100 to Max
You will probably want to sort the EasyScan by the LR Channel Sort PCF. Obviously, it is possible to have additional conditions or choose a different Watchlist to Scan (the time advantage gained by using this method increases with the size of the Watchlist). You may want to watch the following videos before creating the PCFs and EasyScan:
How to create a Personal Criteria Forumula (PCF) Using EasyScan to find stocks that meet your own criteria Constructing more versatile and reusable Personal Criteria Formulas
The following forum topics contain the information necessary to adjust the Linear Regression Period and Width in the PCFs:
Using Linear Regression vs Classical Peaks/Valleys for Divergence Analysis Linear regression channel calculations
Bruce Personal Criteria Formulas TC2000 Support Articles


Registered User Joined: 5/3/2005 Posts: 11

I know your guy can do it.
everytime I posted out the questions, I know your guys will answer in mins.
Thanks.


Worden Trainer
Joined: 10/7/2004 Posts: 65,138

You're welcome.
Bruce Personal Criteria Formulas TC2000 Support Articles


Registered User Joined: 1/5/2005 Posts: 24

I liked the results as posted in the video...and went ahead and did a trial today using the Nasdaq 100. The results are not as clearcut as those of the video. For example, in the ending sort, I have the following: SBUX = 317.83 has bar above channel AMZB = 251.47 has ending bars below channel YHOO = 243.65 has ending bars below channel
AMAT = 156.56 has bar ending above channel.
As I go down the list, the results continue to be in reverse order of what I expect to find, especially in the top 10 stocks sorted.
Please explain why I'm getting these results.
I truly appreciate your videos and all the effort you put forth for the benefit of the users. They are all great. Sorry to trouble with this.
Tony


Worden Trainer
Joined: 10/1/2004 Posts: 4,308

What period linear regression are you plotting? What setting are you using for width? For extension?
 Doug Teaching Online!


Registered User Joined: 1/5/2005 Posts: 24

OOPs...I guess I have been too long on the PC and got mesmerized by all the screens I had been watching! Somehow, I was using a past chart when looking at the results of the sorts...and I didn't realize this until I went to do some other work and on returning noticed the flashing warning on the top right of the screen. I do appologize for my oversight! The results are quite in order with the reading of the sort. Best regards,
Tony


Worden Trainer
Joined: 10/1/2004 Posts: 4,308

Glad to hear it's all straightened out! I've done that countless times myself!
 Doug Teaching Online!


Registered User Joined: 10/7/2004 Posts: 45

Great video Gentlemen, many variations, thank you. 5 Stars!
DavidBSchoon


Registered User Joined: 10/7/2004 Posts: 133

I notice that DW uses std deviation channel lines quite a bit. Is it possible to scan/filter for stocks that have a balanced oscillation; for example, a stock that channels 20 dollars in width; for instance, 10.00 to the UPside and 10.00 dollars to the DNside? If so, how would I correlate std deviation to a dollar (price) figure to determine that focus on price in conjunction with these std deviation amts to construct a std deviation channel? How would I write a scan like that?
I would be interested in this that would set up a balanced straddle play. Conversely, if this can be done might I also find erratic stock movements. For example a stock that has broken through resistance and is now channeling in an out of bounds range above its previous resistance which might be a potential good strangle play? Note: I need to ask will future tc2005 (editions/versions) include option chain pull down? also, are the Worden Bros (DW, PW, CW) working on interfacing trade platform with tc2005 to where when we place trades they could reflect on the chart the prices we set as limit or market prices so we can target our trade in progress visually off the chart? Have a visual interface to place buy/sell stops, etc.
I clicked on IMAGE intending to show a foto of what I mean yet the image icon is the same as the URL link icon as tool bar to where we post these mssges. I thought an image would be a browse feature to attach in a few images with my mssge here? Why are image and link icon the same for posting messages? In other words, they are redundant not unique icon features. Maybe this needs to be fixed?


Worden Trainer
Joined: 10/1/2004 Posts: 18,819

For starters, check out this video...
Scan for stocks bouncing in a lateral channel
Take special note of the PCF used in the WatchList tab.
Let me know if this does it for you.
 Craig Here to Help!


Registered User Joined: 10/7/2004 Posts: 9

greatthanx


Registered User Joined: 6/1/2006 Posts: 48

I've run the Linear Regression sort as in the video, using the Telechart's ETFs list as the watchlist, and came up with 123 ETFs. Is there a way to find the ETFs which fit the sort, but have now pulled back to the 10day price's SMA?
So maybe I have to sort based on the linear regression which occurred like 1 to 2 weeks back, and run a PCF (or Scan?) to find the ones that have now pulled back to the 10day SMA. How can I do that? Thanks.


Worden Trainer
Joined: 10/7/2004 Posts: 65,138

BRGZZ,
You can adjust the technique to test for the Slope being negative at some point in the past by setting the Extension in the Linear Regression Channel to something greater than 0 (you'll want to base this on how far in the past you wish to look).
The Channel Sort will still find items that are currently above the Linear Regression Channel. If you want to also test if it is at or above the 10Period Simple Moving Average, you could use the following Personal Criteria Formula as an EasyScan Condition:
How to create a Personal Criteria Forumula (PCF)
Using EasyScan to find stocks that meet your own criteria
C >= AVGC10
Bruce Personal Criteria Formulas TC2000 Support Articles


Registered User Joined: 11/26/2009 Posts: 16

Hi! And Thank you for your great presentation. Simple way to do quite powerfull thing heh! I wonder how long would it take to do the same task with my pencil and paper?
When I tried to do exact same steps I noticed strange result in my Nasdaq100 sorted by "Visual Slope" of the regression channel. My hope was to see the slope changing form descending to ascending as I go through the sorted list, but instead it looks like they randomly mixed (even though I see sorted column with negative numbers 1st and then gradually positive).
Please see screenshot:
thank you,
Dmitry
ps: sorry for huge screenshot, it's my 1st message, hope I'll find out how to properly post big images later. any suggestions?


Worden Trainer
Joined: 10/7/2004 Posts: 65,138

shevkoplyas,
Welcome to the forums. A very good foundation for learning how to use TeleChart can be gained by reviewing the following:
If you are new to TeleChart READ THIS FIRST!
I'm pretty sure the issue is that you are scrolled back to 04/10/08 instead of looking it current data.
Bruce Personal Criteria Formulas TC2000 Support Articles


Registered User Joined: 11/26/2009 Posts: 16

QUOTE (Bruce_L) I'm pretty sure the issue is that you are scrolled back to 04/10/08 instead of looking it current data.
Thank you, Bruce! It was exactly the case. I'll go through "If you are new to..." collection right away!
Dmitry


Worden Trainer
Joined: 10/7/2004 Posts: 65,138

shevkoplyas,
You're welcome. Our pleasure.
Bruce Personal Criteria Formulas TC2000 Support Articles


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