[dpaterso]

Hey Nick,

Seeing that you and I are 'playing around' with LRC's here is what APPEARS to be the MOST 'foolproof of the lot' and I thought you might be interested or at least take a look:

LRC's (14,100).
ADX/ADXR > 25 (the higher the better of course).
RTS.
SIS.

Take SIS entries (whether based on HSP's or LSP's or SAR's it does not matter) ONLY in the direction of the LRC's AND (here is the 'key') EXIT at the closest RTS level that will result in a profit being made (or if you're feeling 'adventurous' scale out the position over multpile RTS levels!!!

In other words: you're using the SIS for entries (and SIS entries are 99.999% 'accurately in the right direction' INITIALLY I find), you're ONLY taking entries in the direction of the current trend, and you're taking profit at specified levels as per the RTS. Given the numerous entry signals provided on a daily basis by the SIS this should generate nice consistent daily profits EVEN ALTHOUGH you're not using the SIS to 'trade the trend out'.

This of course is NOT 'trend following' and works on a similar principle to the TBPS except that the profits are bigger, you're NOT entering at market, and there are no HUGE stops to spoil you day (account)!!! On the OTHER HAND: the LRC's sure look a like a MAJOR 'compliment' to the TBPS i.e. only taking TBPS entries when indicated BUT in the direction of the LRC's.

I suppose that all of the above once again just proves the old adage that 'the trend is your friend' (as 'coy' as that may sound after all this time)!!!

Take a look.

Edit:

On FURTHER closer inspection it would seem that by decreasing the period for the LRC's they become more 'sensitive' and / or 'reactive' to a trend direction change. Could it be a way to 'filter out' some 'false' SIS SAR's???

(Just one thing for others following this thread: Linear Regression Channels or 'LRC's are NOT just a set of parallel trend lines i.e. their values are calculated by using a (fairly???) comples algebraic equation. I mention this because I think that they have more 'substance' than just a set of parallel trend lines).