In 1998, I wrote an article that was published in Technical Analysis of Stocks & Commodities magazine, which was published in the November 1998 issue of the magazine. In my article, entitled "Enhancing the Raff Regression Channel", I described how I developed a method of placing Raff Regression Channels in my MetaStock charts quickly and accurately by using the Williams%R indicator as a guide. I called this type of channel the "Enhanced Raff Regression Channel", and I coined the acronym "ERRC", which I tend to read like the name "Eric".
My article illustrated how an ERRC would more accurately encompass the path of the trends on which it was drawn, and hence more effectively predict future price movement. Since the strength of the ERRC is to predict the future, the channels are always drawn with the lines extended to the right... into the future... on the chart. I also illustrated methods of using these channels for certain kinds of trading opportunities.
My work with the ERRC didn't end there. I used it daily in all of the charts I was able to watch, at work, or at home. In doing so, I discovered other interesting channel methods, based upon the ERRC.
At that time, the Support Department manager encouraged my interest in channels, as a way to enhance my understanding of MetaStock, and thus expand the assistance I could give our customers. When I was ready to write a second article, about a method of channeling that I dubbed "TeamWork Channels", he was very much in favor of it. I was granted permission by my employer to submit the draft of my new article to Technical Analysis of Stocks & Commodities magazine.
When I did submit my article, the new Editor's response to my draft was only luke-warm. Rather than rewriting the article for a reluctant editor, I decided I'd build my own web site, on which I could publish in my own way.
My site was well received, and I had a cadre of about 200 consistent visitors that enjoyed my site and participated in the discussions. I conducted a survey to determine whether they liked my methods well enough that they would attend a seminar on them, and how much they would be willing to pay for the seminar. I was heartened by their response and began to plan for such seminars. Unfortunately, difficult times arose for my family, and I found myself forced to reluctantly close down my web site, and put off my plans for the seminars. My site was up for only about 2 and 1/2 years.
When I learned recently of this free blogging service that Google provides, I investigated it and decided to 'resurrect' my web-based discussions of the Enhanced Raff Regression Channel (ERRC), and its subsequent offspring, the TeamWork Channel (TW Channel).
I will be posting MetaStock charts here to illustrate the usage of the ERRC and TW Channels. I'll discuss their qualities, strengths, and weaknesses. I hope to help everyone understand what they can and cannot do. I'll provide tips on how to draw them accurately, and on how to use them for trading. I may not be able to animate them like I did on my own site, but I'll do my best to make them illustrative of the strengths of these channels.
From time to time, I will issue Channel Challenges to you, my readers. I'll challenge you to duplicate the charts I've posted, or to add in an ERRC or TW Channel that I did not include. Sufficient information will be available to make it possible to do so, at least for MetaStock users. These Channel Challenges will help solidify the reader's understanding of the things I've presented here.
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