Geared towards support and resistance lines, but still on topic of this thread.
Several years old, and has been posted elsewhere on ET too.
Several years old, and has been posted elsewhere on ET too.
are trend lines self-fulfilling prophesies?
- Thread starter stockmarketbeginner
- Start date
Thank you for your reply. What is "TL"?
Thanks, this guy made a fun presentation!
"are trend lines self-fulfilling prophesies?"
Yes and everything is, and the more traders who join drive price even faster, if hedge funds and HFTs join in, most likely there be continuation, you want more people to join the party, volume drives most trends, no volume like the Indexes skyrocketing on steep movement to new all highs, that steep movement on lessor volume tells world only one's buying are smaller traders and bigger traders are feeding them.
Getting into moves where you against volume is like sitting on train tracks and saying train going to stop for you.
Yes and everything is, and the more traders who join drive price even faster, if hedge funds and HFTs join in, most likely there be continuation, you want more people to join the party, volume drives most trends, no volume like the Indexes skyrocketing on steep movement to new all highs, that steep movement on lessor volume tells world only one's buying are smaller traders and bigger traders are feeding them.
Getting into moves where you against volume is like sitting on train tracks and saying train going to stop for you.
%%
SMB;do guard rails on the road ''cause behavior'' No, but a good guide. Generally,bull markets have no resistance; bear markets have no support, so guess which one your chart is??
Thanks for the question
I saw the video. When it comes to horizontal lines this is why it is the best to trade the lines everyone can see. For example, the previous day’s high and low. This is why Fibonacci is not reliable, IMO, because not that many people use it on their charts.
When it comes to trendlines that signify uptrends/downtrends, like Tom said, it means accumulation or distribution by large traders, funds/banks/HFTs—with the exception of “Trend Day” like action—an unrelenting price move in one direction.
So in a normal accumulation/distribution scenario, I think buying or selling when price meets the trend line is a risky play. Because like other posters said, the lines are subjective. But also, you never know when the the big traders will stop buying or selling and the trendline will break. In fact, in the case of an uptrend, the big traders may stop buying ON PURPOSE because they feel support is weak and they can get better prices. So when the line breaks, all the weak hands get out—the trend is over! This gives the big traders the volume to buy again at lower prices.
This exact kind of action is in the middle of the chart in the OP. Look for the buying tail. This is the low risk play.
When it comes to trendlines that signify uptrends/downtrends, like Tom said, it means accumulation or distribution by large traders, funds/banks/HFTs—with the exception of “Trend Day” like action—an unrelenting price move in one direction.
So in a normal accumulation/distribution scenario, I think buying or selling when price meets the trend line is a risky play. Because like other posters said, the lines are subjective. But also, you never know when the the big traders will stop buying or selling and the trendline will break. In fact, in the case of an uptrend, the big traders may stop buying ON PURPOSE because they feel support is weak and they can get better prices. So when the line breaks, all the weak hands get out—the trend is over! This gives the big traders the volume to buy again at lower prices.
This exact kind of action is in the middle of the chart in the OP. Look for the buying tail. This is the low risk play.
Trend lines exhibit a typical fallacy of hindsight and forced/artificial curve fitting.
They are only accurate after the fact and of no statistical meaning at all, meaning complete randomness. However, sometimes they do fit even in real time, akin to the proverb that a broken clock is right twice a day.
They are only accurate after the fact and of no statistical meaning at all, meaning complete randomness. However, sometimes they do fit even in real time, akin to the proverb that a broken clock is right twice a day.
Erm, wont that make the drop worse? If anything they should be looking to sell at technical areas where people are likely to buy. This will provide the much needed liquidity to get rid of their position without moving the markets much.
I like this video, but I'm just not so sure about it. I get it. You could place some random horizontal lines on a chart, and some would fit in and look like support/resistance points. But that is just pure chance - random. The question is, can those coming up with support/resistance points do BETTER than this randomness. His video does not answer that. And lots of places where the lines don't match up he either flubs or glosses over haha.
Still, fun video. But I'm not convinced.