Trends/Trendlines and channels

Raff regression channel

A regression line with parallel lines pushed out until they touch the highest high and the lowest low.

Trendlines and channelsBest on 6M, 1Y, 3YAlso called Raff channel

Illustration of the Raff regression channel shape. It is a sketch, not real price data.

What it shows

The Raff channel starts with the same best-fit line as the linear regression channel. Instead of using standard deviations, it measures the largest distance any price had from that line, above or below, and draws the outer lines at that distance.

That makes the outer lines touch the most extreme high and low in the window. It shows the full range price used around the average path.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Fit a least squares line through the closing prices of the window.
Find the largest distance from the line to any high or low in the window.
Draw a line that far above and a line that far below the fitted line.

Starting values: Window whole period shown; Offset largest distance of any high or low; Price used close for the fit, high and low for the offset. These are proposed and will be tuned on real price data before launch.

How to read it

The middle dashed line is the fitted path.
The outer lines each touch one extreme bar.
The channel width equals the biggest stray from the average path.

Status labels you may see

Label	What it means
Near the middle	Within a quarter of the width from the middle line.
Upper part	Closer to the upper line.
Lower part	Closer to the lower line.

What cancels it

Nothing cancels it. It is redrawn when new bars change the fit or set a new extreme.

What traders check next

Whether the extreme bars happened early or recently.
How wide the channel is compared with the price.
Whether the slope changes when you change the period.

Limits

One extreme bar can widen the whole channel.
The outer lines will not touch more than the two extremes.
The fit moves with every new bar.

Try it in forecastviz

Open any ticker and choose Trendlines and channels → Raff regression channel in the left menu.
Switch between 6M, 1Y, 3Y to see how the picture changes.
Compare with Linear regression channel and Standard deviation channel on the same chart.

Open on a ticker

Questions

How is it different from the regression channel?

The outer lines come from the largest actual distance, not from standard deviations.

Who invented it?

It is named after Gilbert Raff. We have not confirmed other details of its history.