New Posts: 004 - Enhancements to My Proposed TW-Channel Tool

As promised, I have listed more things I believe the proposed TW-Channel Tool should do to make this channel easier to use and enhance its capabilities.  I've done so, by editing my original proposal post, adding more ideas, and making the text a bit more readable, too.  Please click on this link to my old Post 011 "WANTED: A TeamWork Channel Tool!" to see what I'd like to add to it.  I highly recommend you watch Post 011, as I may update it more in the future.

You know, I really should have made the title of that post "NEEDED!!: A TeamWork Channel Tool!" Hopefully, with the number of people reading my blog growing steadily, I'll be able to get input from others to better define the NEED for this tool!

New Posts: 003 - Why I Believe Day Traders Can Use TW-Channels

First,  let me make THREE things clear:

1.  I have never attempted to day-trade, even though in the past I have had occasion to use MetaStock Pro, which tracks the markets live in any level of trading chart you want.  You can trade "tick", 1-minute, 5-minute, 10-min, etc., or go with Daily, Monthly, whatever.  You can do a mixture of multiple time frames, if you wish.

2.  Although I fully believe that TW-Channels should be implemented in the End-of-Day version of MetaStock, and in MetaStock Pro as well, I cannot say whether it would be a good idea to actually plot TW-Channels in day-trading time interval charts, such as "tick", 1-minute, 5-minute, and the like.  Certainly they would be useful in Daily, Weekly, Monthly charts, but I've never had a chance to try using them in any time-interval less than Daily.

3.  I have, however, watched 1-minute and 5-minute chart prices react to the Support/Resistance price-levels in my Daily charts having well-drawn TW-Channels in them.  I'm certain that with well-drawn TW-Channels in a Daily chart, any day-trader could strengthen his/her trading with regard to using Support/Resistance levels to make trading decisions.  Assuming, of course, that the Day Trader is willing to try it long enough to see it work.

The trouble with doing this now, though, is the tedium and time needed to place valid TW-Channels in a Daily chart of the targeted trading instrument.  In order for TW-Channels to be as useful as they could be, a new tool is needed,...
the TW-Channel Tool that I've proposed for MetaStock.

The illustration below is a crude one, but it will serve to show how TW-Channel Daily charts could help the day-trader see Support/Resistance areas before they are actually hit:

On the left you see an image of the candlestick that appeared on my Daily chart, with lines crossing it at various angles and prices.  On the right is an OHLC Bar of the same date's price movement.  Note the purplish and reddish Std-Err Channel Lines that draw a flat sort of X across the candle and the bar.  Also note that the mid-point of the X is just to the right of the mid-point of the candle and just to the right of the OHLC Bars vertical line.

Candlestick on Daily
Chart of GM on 11/07/14

 

OHLC Bar on Daily
Chart of GM on 11/07/14

A screen-captured image of Google's free 1-Day chart of General Motors (GM) provided the images below.  In the first one, the cross-hair tool's black dot sits on the point of Resistance at the price of 31.53, and as you can see, this level provided Support later in the day.  The second one shows the next peak over where Resistance was met at 31.56, and again, you can see that price level providing Support later in the day.  MetaStock's arrow-pointer can pick out the approximate price level where each of these lines cross the day's prices, and as it turns out these were at about 31.53, for the reddish line, and 31.56, for the purplish line.

Two screen-shots of Google's 1D chart of GM for 11/07/2014.

Notice, please, the very choppy range of price movement that runs across the top of the chart.  Now look again at the candlestick and the OHLC bar images, and note that there are four Std-Err Channel Lines crossing each other (above the Close in the upper-wick area).  These four lines account for the choppy behavior of the price, due to Resistance and Support provided at slightly different levels by these four lines.

If you are a day-trader, can you not picture yourself being able to use the extra "intelligence" that these lines provide to help you make a trading decision?

New Posts: 002 - NEW!!! My TEAMWORK CHANNELS(tm) Plug-In PROPOSAL!

Updated New Post 004 --- My Proposed TEAMWORK CHANNELS TOOL plug-in !!!

In early April this year, I met with Jeff Gibby at MetaStock's office to show him my PowerPoint Presentation about the new TeamWork Channels Tool.  He was impressed and asked me for some details, and, how much I'd like to charge for the Plug-in!  He said that the programming team was fully booked getting the newest version of MetaStock ready for release in May.  He said that after the release, we would get together to begin developing my plug-in.  Meanwhile, I am working on an instruction manual and a curriculum for a training class to introduce my Plug-in.

In early May, my wife and I took a two-week trip to Hong Kong.  We stayed with her older sister and met other relatives in Hong Kong.  We had planned to visit Xiamen, China, where my wife was born.  Sadly, because of Roxana new US Citizen status, China's representatives said China could not give her a visa.  She would have to get it from the US Government because she is now a US Citizen.  She must get it from the US Government, they insisted. Unfortunately, the US Embassy in Hong Kong was closed.  Roxana was very upset, but we will try again next year.

The trip was not wasted, though.  We had a good couple of weeks visiting my wife's older sister, and her cousins, etc.  Her nephew, Michael, drove us all over Hong Kong, showing us the sights, etc.  He is a brave and skilled driver, and that is a VERY good thing, or I might not be typing this right now.  Hong Kong is an amazing place, but the TRAFFIC is horrendous!  Thankfully, Hong Kong is VERY SERIOUS about making people learn to drive well, and I'm grateful for that!  We returned home safely, hauling my wife's many gift items, and sadly, a Major Case of JET LAG!

After our return, Jeff contacted me to let me know that as he was going to Sales trip to Europe for the latest release of MetaStock.  He would be back in late May or Early June.  We planned to meet in June to begin the development of my plug-in.  The tentative retail price currently is $299.00, but that could change once development-costs are considered.

As soon as I can, I plan to update my PowerPoint Presentation, after Jeff and I have discussed the details of the development, and perhaps I'll be able to post a copy of it here, along exactly what the price might be.  As the details of development and programming are not known, as yet, we cannot give you a specific time that it might become available.  But, we will announce it, and its purchase cost, as soon as we can.  Hopefully, that will be before the end of July this year.

Meanwhile, watch this BLOG for announcements, please.  I would welcome your feedback and emails, although I may need to defer specifics until later.  I promise to keep you updated as soon and as often as I can.  I hope to be able to offer a discount for readers of my blog, especially if you'll pass the word around about my plug-in becoming available.


Robert B. McKinnon
TeamWork Channels(tm) Creator

New Posts: 001 - FINALLY!

CHANNEL CHALLENGES for
TECHNICAL ANALYSTS

is

REBORN AGAIN at last!!

I sometimes thought I might never be in a position to begin this blog again, but now, ready or not, I must relaunch it!  A recent car accident wherein I or my wife could have been seriously injured convinced me I should not wait any longer.

I am starting with what I consider to be inadequate preparation, so please forgive me if you find this blog somewhat clumsy and uncoordinated.  Please forgive me if my grammar and spelling are not quite right, too.  I will try to edit and correct as needed, including errors I may discover in my old posts.

Click on each chart image to view enlarged in a new window.

General Motors (GM)



General Motors, showing DCB pattern,
with some commentary.

As I began working with MetaStock again, after my upgrade to the End-of-Day version of MetaStock 13, I grabbed a handful of stocks and indexes to begin charting.  General Motors (GM) grabbed my interest right away, as it seemed to be showing signs of a Dead Cat Bounce (DCB).  I have a close cousin, who is a good friend.  One-day I sent her a copy of my chart, just to see what her reaction would be.  Her response was a good indication that she doesn't trade or follow the stock market much.  She did want an explanation, though, so I sent her this first chart with some comments to help her understand it.

You can see my "paper" Short position started in the chart at the left.  I decided I would Short 1000 paper-shares of the stock.  (I currently have no real-world funds to apply to trading, so paper-trading is all I can do for now.)

Did not close outside FenceLine

Will GM drop this far?

On the left, I point out that the short-term Bullish recovery (on 10/06/2014) did not close above the FenceLine Channel, giving me confidence that the Short position was still valid.

I needed to estimate how far GM might drop, if the pattern were to continue developing.  I measured the distance from the peak (where the red-line starts in my chart at the left), to the bottom-line of the ERRC.  I plotted this distance in the chart at the right with the orange line that drops well below the current prices, showing a Short position would have some good potential. If my drop estimate is accurate, it could fall to $28.00, but could take a week or two to do so.


How My Short Position Has Gone So Far

As of 10/17/2014, my "raw profits" from this short position (in paper-shares) on GM are quite encouraging.  See my spreadsheet charts at the right.

This does not mean that charts using ERRCs and TW-Channels will always go your way, but I find them very helpful when support and resistance in the area of the current price needs to be evaluated.



GM and FORD Short-term Longs

As I was watching GM, I noted Ford (F) getting very similar signals from my Expert. Waiting until both hit support that warranted the buy signal, I "bought" 1000 paper-shares of both.  My Short position in GM is still in play, but I thought I'd take a little profit from what is likely to be a short-term Bullish move to the next ERRC line above the current price.  The comparison chart at the left is as of 10/17/2014.




Update:  GM and F Longs Closed, Short Study Continues

Sold both on the Open Friday

NEW!  UPDATED CHART OF
MY GM SHORT POSITION

On Thursday, 10/23/14, I opted to close both my long positions on GM and F.  GM has some bad news that caused a large black candle, and since I felt Ford would mimic GM, I opted to close my positions on both on the Open the next day.  I ended up taking profit from both.  Meanwhile my Short Position on GM continues, as seen in the chart at the right.

With the Start Date (SD) and End Date (ED) for each
of these TW-Channels, you could recreate them
on your own General Motors (GM) chart.

Do you have a chart on which you'd like me to position TW-Channels for you?

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ARE YOU NEW TO THIS BLOG?  WELCOME!!

If you are new to Channel Challenges for Technical Analysts, I welcome you, and would be glad to get to know you and how you found my site.  To make the most of what I offer, I suggest you read at least some of my earlier posts to gain a basic understanding of my methods.  Of course, reading all my posts, in order, would make sense, but reading those I list below will give you an idea of what has gone before, and provide a good foundation for future learning.

Post 001: "Channel Challenges for Technical Analysts Reborn" introduces me, my methods, and why I began my blog.  It mentions the ERRC Color Coder Expert that I initially used in my charts.  Unfortunately, over the years, the original version's code was lost as I sought to improve upon it. Its replacement, which is under development, will not only color-code the Over-Bought (OB) and Over-Sold (OS) candles to help place the ERRCs, but also provide various other feedback on the state of the chart.  Buy/Sell Signals, Bullish/Bearish Conditions, Volume Greater than Average indications, and even Commentary are my intent.  I will make this Expert available for a fee.

Post 004: "How to Draw ERRCs and TeamWork Channels" is a good basic tutorial on how to create TW Channels, beginning with placing an accurate ERRC, following up with placing Standard Error Channels (Std-Err Channels), and/or Standard Deviation Channels (Std-Dev Channels), as needed.  Note, I almost never use Std-Dev Channels in my TW-Channels now, unless an obvious support/resistance location is noted in my chart which a Std-Err Channel doesn't "explain".

Post 005: "TeamWork Channels On the Nasdaq 100 Index" gives a good illustration of using TW-Channels on Index charts, in this case the Nasdaq 100 Index.  It also provides the Start Dates (SD) and End Dates (ED) of the channels in the chart, so you can reproduce them in your own.  It then gives samples of how the TW-Channels, drawn on trends way in the past, chart areas of Support and Resistance in the more current prices, essentially proving their value.

Post 006: "The Fenceline & Overall TW-Channels' Utility" introduces how to draw FenceLine Channels, and Overall TW-Channels, and gives you an idea of why you may wish to include them in your charts.

Post 007:  "Why do TW-Channels Work?" answers this question in a rather technical way, but there is a paragraph in the middle that sums up my opinion as to why they work.  After re-reading it just now, I realize it could be wording a bit better, so I'll probably expand on it in a future post.

Post 008:  "Are Channels Dynamic?" points out that ERRCs, TW-Channels, and all the other channels I use are definitely not Dynamic.  In technical charting, this term refers to the tendency of an indicator to change its value, and thus its position on the chart, with any new data point that comes in.  I would be a pretty poor user of MetaStock, and a terrible Customer Support Technician if I every proposed that you use any kind of Dynamic indicator in your charts.

Post 009:  "TeamWork Channel Drawbacks" seeks to point out aspects of ERRCs, TW-Channels, etc., that are not, shall we say, optimal?  Every indicator I've ever seen has some kind of drawback, including my channels tools.  This post gives a good idea of what they are, but also proposes ways that these could be eliminated or at least reduced, with the help of MetaStock's programmers.

Post 011:  "WANTED:  A TeamWork Channel Tool" is my first effort to propose how a tool could be designed in MetaStock to facilitate and enhance the use of TeamWork Channels.  These are effectively the collective form of using ERRCs, Std-Err Channels, Std-Dev Channels, and/or FenceLine Channels, all of which use the same SD and ED for any given TeamWork Channel's parts.  Altough my current methods with them work, the tool I describe could take most of the tedium of the task away, and have the added benefit of reducing the level of memory-usage need in MetaStock to produce TeamWork Channels in charts, by eliminating the lines that are not needed in the chart.  Since I wrote that post, more ideas on how and why this tool should be built have occurred to me.  I will write a post specifically about this issue again in the near future.

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Topics for Future Discussion

I Just Enrolled in TD AmeriTrade's 
thinkorswim
Virtual Trading Program

Why I believe Intraday Traders can benefit 
from using TW-Channels in Daily Charts!

Enhancements to My Proposed TW-Channel Tool

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