Trend Channel idea

   In my training, I was taught a certain way to trade a change of trend trade. Basically, you enter when price action moves above the trend line PLUS market noise. The "market noise" concept is what concerns me here.
In blue chip stocks, and on weekely data, we use a figure of 2.5% as the market noise figure. So I setup the Trend Channel drawing tool at 2.5% and that is fine. Does the job. It would be nice to have the trend channel lines with a different attribute (ie dotted or a different colour), but the real problem is the 2.5%. 
Market noise is relevent to the market you are in, and the time interval. 2.5% might not be suitable for spec stocks on daily charts, for example. In this situation it is better to use something like a multiple of ATR. ie +/- 0.5ATR.
My suggestion is - would it be possible to add an option to the Trend Channel tool where we can do this? I presume that it would have to get the ATR figure from the last price bar.

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kneighbour Members Profile Send Private Message Find Members Posts Visit Members Homepage Add to Buddy List Regular Joined: 12 Feb 2005 Location: Australia Posts: 57	Post Options Post Reply Quote kneighbour Report Post Quote Reply Topic: Trend Channel idea Posted: 02 Mar 2005 at 8:27am
	In my training, I was taught a certain way to trade a change of trend trade. Basically, you enter when price action moves above the trend line PLUS market noise. The "market noise" concept is what concerns me here. In blue chip stocks, and on weekely data, we use a figure of 2.5% as the market noise figure. So I setup the Trend Channel drawing tool at 2.5% and that is fine. Does the job. It would be nice to have the trend channel lines with a different attribute (ie dotted or a different colour), but the real problem is the 2.5%. Market noise is relevent to the market you are in, and the time interval. 2.5% might not be suitable for spec stocks on daily charts, for example. In this situation it is better to use something like a multiple of ATR. ie +/- 0.5ATR. My suggestion is - would it be possible to add an option to the Trend Channel tool where we can do this? I presume that it would have to get the ATR figure from the last price bar.