sometimes i use trend lines, but every new time the price break my trend lines, i wonder whether the "actual" trend line sh be higher/ lower and i have yet to see the price emerge & establish, yet when i draw it too high/ low, i miss the entry opportunity near the s/r of the "real" trend line before the price reverse, so gets me all muddled up
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Do Trendlines work?
- Thread starter duard
- Start date
ONLY use this method if market is in a trading range and NOT trending. Which indicator u use is up to u: i bollingers but you can also use keltners
A quick check of whether market is chopping is to have a look at your bollinger bands: if there rate of change is close to 0 and they look visually pretty flat then this is a good time to implement it.
ROC = (current value - last value)/current value
Take all the bollinger that have rates of change near zero and take the average. Alternatively u can use excel to run linear regression but average usually suffices.
The resulting value is your S/R point.
I like it because its objective.
On the diagram i have used 15day bollingers at 2 standard deviations above and below. Chart is of the SPI200
ive extended the s/r lines a bit to demonstrate how they are breached
A quick check of whether market is chopping is to have a look at your bollinger bands: if there rate of change is close to 0 and they look visually pretty flat then this is a good time to implement it.
ROC = (current value - last value)/current value
Take all the bollinger that have rates of change near zero and take the average. Alternatively u can use excel to run linear regression but average usually suffices.
The resulting value is your S/R point.
I like it because its objective.
On the diagram i have used 15day bollingers at 2 standard deviations above and below. Chart is of the SPI200
ive extended the s/r lines a bit to demonstrate how they are breached
Attachments
FWIW,
The venerable dbphoenix has a rather illuminating viewpoint (and concomitant discussion) on trendlines which can be found on the T2W PV discussion board (and quite possibly in other posts on ET). While one may not necessarily agree with all that he has to say, he presents a reasoned approach to understanding these at times, fanciful constructions. They are not infrequently more apparent than real, but should not, I think, be dismissed out of hand as useless.
lj
The venerable dbphoenix has a rather illuminating viewpoint (and concomitant discussion) on trendlines which can be found on the T2W PV discussion board (and quite possibly in other posts on ET). While one may not necessarily agree with all that he has to say, he presents a reasoned approach to understanding these at times, fanciful constructions. They are not infrequently more apparent than real, but should not, I think, be dismissed out of hand as useless.
lj
Not really complicated....trendlines tell it all......just have to get the right ones out of the million combinations available....i found them...i don't disclose them...or sell them.....yes, trendlines work...well over 90% quite nicely, thank you........they are customized lines that work from 1 min charts to monthly with no tweaking or curve fitting needed...and no oscillators or other crutches needed....super robust system.....1 chart only is needed.....because if you change the time frame, system looks and is the same for all.......emini daytrading is what i perfected it on........ 6 years.........don't look for it, it will be more required of you than time sometimes..... most days 100%......i have said this before and instead of decent questions i get attacked.....so attack.....
Frogman,
Sounds nifty. I'm working on a bit of a system myself and without boring folks with details, it so far is a combination of a Sperandeo basic trendline plus appropriate consideration of the fact that as the day moves along and new highs and lows are formed intraday (not necessarily interday), then the point of origin of the trendline must adapt to those changes in price.
Couldn't agree with you more that it is one of the cleanest types of TA, but as you would seem to be saying, and again I agree, there must be some rigor with respect to how one draws the line. There can be no post-modern "My instincts tell me the line must be here" crap. One constructs a system, tests it, collects the data, analyses the data and makes a judgment as to the veracity of the initial assumptions.
Simple but not trivial.
lj
Sounds nifty. I'm working on a bit of a system myself and without boring folks with details, it so far is a combination of a Sperandeo basic trendline plus appropriate consideration of the fact that as the day moves along and new highs and lows are formed intraday (not necessarily interday), then the point of origin of the trendline must adapt to those changes in price.
Couldn't agree with you more that it is one of the cleanest types of TA, but as you would seem to be saying, and again I agree, there must be some rigor with respect to how one draws the line. There can be no post-modern "My instincts tell me the line must be here" crap. One constructs a system, tests it, collects the data, analyses the data and makes a judgment as to the veracity of the initial assumptions.
Simple but not trivial.
lj
Quote from frogman:
Not really complicated....trendlines tell it all......just have to get the right ones out of the million combinations available....i found them...i don't disclose them...or sell them.....yes, trendlines work...well over 90% quite nicely, thank you........they are customized lines that work from 1 min charts to monthly with no tweaking or curve fitting needed...and no oscillators or other crutches needed....super robust system.....1 chart only is needed.....because if you change the time frame, system looks and is the same for all.......emini daytrading is what i perfected it on........ 6 years.........don't look for it, it will be more required of you than time sometimes..... most days 100%......i have said this before and instead of decent questions i get attacked.....so attack.....
Are the trendlines mechanically drawn via a set of criteria or have you developed teh intuition to just draw the correct lines? IMO after 6 years youd have a hell of a good intuition of what market your trading so it may just be experience. But if its mechanical and with simplistic adaptable rules then it would be a pretty amazing and robust system which concievably can be traded on practicallyy every single financial, commodity and forex futures around.
they are customized lines found to be robust to the max. took years. and the eye can;t tell me what each bar will do next. at tick open. my system can. iwon't give it. or sell it..but trust me it is done. but yes i can see with ymy eyes the same stuff pretty much, but i can snooze and with a glance know whethere to buy or sell. Each bar, with few left alone if desired. some u leav alone or risk is higher with not so clear signal. i don't like high risk. if it looks risky wait for a bar to clear the picture. scalp or run works well with no curve fitting or tweaking.
Trendlines only work if the trade goes your way. Geez.