RTC vs DMA

[MR]

When you see a Type One or Two setup where you are using a Regression Trend Channel, try re-issuing that chart to a lower time frame to better frame up the trade opportunity.

For example, take a look at this Disney Type One buy opportunity setup on the Daily chart....

[MR]

Now, issue this Daily to the Hourly. Calculate a new RTC on this new time frame.

[MR]

By cross-referencing the RTC from one time frame, then issuing that chart to a lower time frame, you will be better able to identify a quicker breakout entry point, often with an improved risk/reward parameter.

[MR]

In the case of the daily chart, it really wouldn't have provided a significant entry for the next change-in-direction....

[MR]

But when you look at it from the hourly time frame it does give you a quicker RTC breakout confirmation for the first leg up.

[MR]

Again, compare the daily and hourly before...

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And then here again is both the daily and hourly afterwards....

[MR]

Here is another RTC idea to experiment with....

If you have a market that has been trending in strong or down sequence-- what some might call a "momentum" play-- try taking your RTC and calculate from the beginning to the current end.

You may be able to use the RTC-- in conjunction with a MOB, Ellipse, Elliott Oscillator, XTL, the 6/4 DMA's, and Advanced GET other tools-- to help stay with a winning trade and help identify either that sequence's break point area or the next possible good risk/reward trend setup. When you look at the July '00 Daily Corn chart you could have easily identified a trading Short opportunity and combined tools with the RTC to stay Short from early in that breakdown sequence.

[MR]

There are times when you might want to combine the RTC and 6/4 DMA's to gain a better handle on price movement, even if the price is moving in a single sloped direction. If the trend direction is to continue, one tool might get broken, but not both. While you should still only take a signal off one tool, the other can help confirm. Again, looking at the recent July '00 Daily Corn chart helps illustrate this idea. Using both the RTC and 6/4 DMA would have given you greater confidence in staying with the downtrend. The key is not to use both tools when they begin to clutter your screen and reduce your ability to act quickly breaks do not occur.

[MR]

Another RTC idea to experiment with--

When you have a clearly defined RTC-- preferably with a single slope-- and you are not trading the swings within the channel, why not turn "Off" everything accept the breakout Regression Trend Channel line? By so doing this the screen becomes less cluttered and is now made more useful for other analysis with other tools. For example, if you are in an uptrend, go to the RTC menu and turn off everything but the Lower Channel setting, using a break as a signal to either lock in profits, or reevaluate a position. Do the same thing with a downtrend, turning off all but the Upper Channel setting.

[MR]

Here is a before example of this... see the cleaner chart where the focal point is the blue breakout trendline. The other lines are turned off....

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Here is the same example afterwards....

[MR]

Again, here is both the before and after comparison where only the breakout RTC is what we concentrate on. The other lines are turned off to clear up the screen....

[MR]

Here is an example of why I might use this RTC technique. When I see a range trading pattern, it often helps the most to turn off all the RTC lines accept the breakout line we concentrate. leave the blue line on in a downtrend, leave the red line on in an uptrend. Monitor then for breakouts.

[MR]

I hope all the following posts will serve as a good framework for future discussion on the Regression Trend Channel and 6/4 DMA Channeling techniques.