[dpaterso]

Good (Monday) morning all!!!

(I had another dream)!!! (Well not really but this IS the first thought that 'crossed my mind' when I woke up this morning)!!!

I MAY have found a more 'scientific' method for the RTS 'BOS' sequencing:

Using Linear Channel Regression:

Method 1:

In THIS 'scenario' you would use STOP ORDERS because the price would normally be ABOVE or BELOW the RTS levels.

- Today is 'deemed' to be a 'B' day if the price YESTERDAY traded to the lower or bottom line during the trading day.
- Today is 'deemed' to be an 'S' day if the price YESTERDAY traded to the upper or top line during the trading day.
- Today is 'deemed' to be an 'O' day if the price YESTERDAY did NOT trade to EITHER the lower or bottom line OR the upper or top line during the trading day.

Method 2:

In THIS 'scenario' you would use LIMIT ORDERS as per 'normal' and this would probably be the 'preferred', 'safest', and most profitable method.

- Today is 'deemed' to be a 'B' day if the price YESTERDAY traded to the lower or bottom line during the trading day after 'bouncing off' the middle line the day before.
- Today is 'deemed' to be an 'S' day if the price YESTERDAY traded to the upper or top line during the trading day after 'bouncing off' the middle line the day before.
- Today is 'deemed' to be an 'O' day if the price YESTERDAY did NOT trade to EITHER the lower or bottom line OR the upper or top line during the trading day.

Method 3:

(Geez: been trying to add this third one the whole morning)!!!

In THIS 'scenario' you would use LIMIT ORDERS as per 'normal' and this would also be a 'safe', and profitable method although profits may be smaller.

- Today is 'deemed' to be a 'B' day if the price YESTERDAY CLOSED between the lower or bottom line and the middle line i.e. in the lower channel.
- Today is 'deemed' to be an 'S' day if the price YESTERDAY CLOSED between the upper or top line and the middle line i.e. in the upper channel.
- Today is 'deemed' to be an 'O' day if the price YESTERDAY CLOSED ON OR VERY NEAR TO the middle line.

The 'ideal' scenario for the above methods is that the lines themselves are 'flat' or horizontal i.e. not 'sloping' in EITHER direction and ADX and / or ADXR is below 25 UNLESS you are going to use the RTS in a trending market in which case you would only take long or short entries as I described in a previous post to this one.

Of course your TP is up to you or you can follow the RTS TP / exit rules.

Now none of this follows the RTS rule or 'noted phenomenon' of 'three-days-up-two-days-down' as described in 'the book' BUT the very 'concept' of the channels is that the price WILL trade between the upper and lower lines 'pretty much' on alternate days or periods.

Also: none of the above is detracting from the RTS itself i.e. you're still using exactly the same 'concept' i.e. all you're really doing is (possibly) using a more 'current' or 'accurate' method for the 'sequencing'.

For more information on Linear Regression Channels do a Google search using the phrase: 'trading with linear regression channels' and see what you find.

Oh, by the way: SUCCESSFUL AND CONSISTENT TRADING THIS WEEK EVERYONE!!!

Edit:

As a matter of fact making use of Linear Regression Channels (let's call them 'LRC's' from now on shall we i.e. that's a 'full load' to type everytime) may even be able to 'beef up' the profitability of the TBPS i.e. only take trades as indicated by the MF AND in the direction of the channels!!! Maybe???