Constructing a reproducible alpha-beta price channel

What the reader asked

A reader asked for the computational formula used in an alpha-beta channel indicator. The editorial reply pointed to a March 1993 treatment of data filtering for trend-channel analysis on pages 103 through 109 of volume 11. Author addresses and phone numbers were withheld unless the author had already published them with the original article.

Recomputing the midline

An alpha-beta filter is a two-gain smoother that forecasts level and slope from ordered price observations over a defined sampling interval and lookback. Editorial instruction: specify the channel midline by recomputing that filter on the same ordered series, so the centerline is a forecast another reader can rebuild. The reply sent the reader to the earlier data-filtering treatment rather than restating a computational formula here.

Placing the rails

A statistically positioned trend channel is a price channel whose envelope is placed from labeled swing points rather than from a fixed percentage offset around price. Construction labels are letter marks such as A through D that identify those swings.

A February 1995 discussion of statistically positioned trend channels omitted the A-through-D construction labels on several charts. Three replacement charts of the same listed stock were printed so the missing marks could be restored to the channel construction. Editorial instruction: place the rails only from those labeled swings. Charts that omit the marks cannot be reconstructed as the same channel.

Keeping the opening print

Correspondents treated the opening print as a required OHLC field. They reported that a version 3.0 charting export, including build 3.00d from a watch-list export path, did emit the open. A separate custom-export utility was described as omitting opening prices even when the main program's export path included them. One vendor contact said opens could be exported but not imported.

An opening print is the first trade of a bar. It is required when channel construction uses full OHLC structure instead of a close-only series.