Do Trendlines work?

[taowave]

Quote from jack hershey:

He does have strong views.


I simply regard prediction as unecessary. I do not find that I need to deal in any way with pascal or Fremat or anything along that line. This is because I have turned to an approach that is oriented to making money very rapidly and I test the rate of acquisition against what is available as time unfolds.

As I examine these two things, there is no aspect of prediction that shows up at all.

Here is an example: GMXR two day hold going from trendline crossing the channel. I do not look at stocks that do consolidation. I only deal with trending stocks and they have to be of excellent quality. Trending and excellence go hand and glove it turns out.

By annoating stocks with trendlines and their channels and their internal formations, you get to take all the market offers from your lists of trending stocks. I use the "unusual" volume as a sort so that i have time to enter aftr the leading indicator of price shows the price will be lifting off the trendline.

To have a day's advance notice of the volume making the move, I use the leading indicator of volume which is the STOCH (5, 2, 3) fast line going upward through 50% see the bottom indicator.

I feel it is possible to run stock portfolios at a money velocity rate of 2.5% a day ordinarily.

By doing the annotations on charts (it all starts with trend lines) and projecting them and then using leading indicators of price (volume) and a leading indicator of volume (STOCH 5,2,3), it is roughly like shooting fish in a barrel.

Commodities trading does much much better for several reasons: it is leveraged, a cycle of profit taking occurs 20 to 40 times a day instead of once every few days (2 to 4) in stocks, the % of the indiviual move is greater, and you are going both ways by doing linked actions of holding and reversing to stay on the right side of the market where the trendlines are overlapped so you have advance warning.

There is no prediction as you see. leading indicators of price replace prediction it turns out.

Am I the only one who finds Jacks quote of runing a stock portfolio at a money velocity rate of 2.5% PER DAY staggering??

 

[kiwi_trader]

Quote from slowBear:

I've finally read through all of this thread. I've found several things that I think may be useful in my trading.

The thread periodically returns to arguments about whether trendlines work or not. I have not found these to be of much value.

So I'll suggest that we close this thread and start two new ones:

1) Examples of trendlines -- people like myself can read/participate in this thread to share our experiences using trendlines.

2) Trendline arguments -- people who have a need to argue about trendline usefulness etc. can use this thread to argue.

If we do this, both groups will not be bothered by the clutter generated by the other group.

enjoy,
slowBear

SlowBear, mparkernys,

You don't need to start two new threads; just understand the nature of this forum. Its much bigger and more active than most and its both "educating traders" and "entertaining traders."

If a "big question" is asked like "is there a god?" or "do trends work?" then after a few pages you get those fixed unchanging big question opinions to come out. And people like me will play games with relative newbies who think they know everything like taowave. Or Cashmoney (read his thread on TA driving him mad (pm me if u cant find it) if you want some really good advice). The game ends when you get them to reveal their inconsistencies for everyone else to read or just get bored.

If you start a "small question" thread then you can explore such topics in a more educative fashion. So don't name it "does X work" ... name it "using tl's better with slowbear." And you should get some good contributions.

Compare the two threads "Market Profile -- who needs it?" and "Market Profile Plus by bolter."

Keep the topic focussed and the discussion away from questions which attract the debate for entertainment and you can achieve a great deal.

Cheers

 

[Bearbelly]

Quote from taowave:

Am I the only one who finds Jacks quote of runing a stock portfolio at a money velocity rate of 2.5% PER DAY staggering??

Jack seems to have stopped posting after his SCT thread was closed which I hope is not permanent. I got pissed at him after he cussed me out for asking for proof of some kind but I do find his posts interesting and provocative and I hope he returns. I have my doubts about SCT but I do believe trendlines and channels work. Interestingly enough the set of indicators that he uses also seem to have some predictive value. In the attached chart you can see the change in trend coming. I have noticed numerous instances of this sort and feel that there is something here worth studying.

 

[romik]

Quote from Bearbelly:

Jack seems to have stopped posting after his SCT thread was closed which I hope is not permanent. I got pissed at him after he cussed me out for asking for proof of some kind but I do find his posts interesting and provocative and I hope he returns. I have my doubts about SCT but I do believe trendlines and channels work. Interestingly enough the set of indicators that he uses also seem to have some predictive value. In the attached chart you can see the change in trend coming. I have noticed numerous instances of this sort and feel that there is something here worth studying.

, you know that chart basically refers to the point I was also trying to make earlier on, that an indicator providing a reversal signal (I was eye balling that chart last Friday man), but so many times price would bounce off the trend line, but when it does start closing above the current trend line, that does seem to elevate the odds of a reversal. Nice one.

 

[Spydertrader]

Quote from taowave:

Am I the only one who finds Jacks quote of runing a stock portfolio at a money velocity rate of 2.5% PER DAY staggering??

Monitor the following symbol for a while, and note what precedes a Failure of Price to respect a trendline. The market provides an early warning for this phenomenon. Some people have named it FTT (Failure to Traverse). I have noted two such occurrences on the daily chart for RNOW, and a couple of others exist as well. Simply, add the trendlines (not drawn in) to locate the early warning. Note also, the dates each colored trend line made its way onto the attached chart. See how price respects the trendlines and the 20 SMA (circled areas). How the FTT and trend line use relate to profitable trading has recently been discussed at the end of Journal II.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1263106>

Edit: Green Trendline notation should read Green Volatility Expansion also added 11/08/06

 

[Hook N. Sinker]

Quote from jack hershey:


Here is an example: GMXR two day hold going from trendline crossing the channel. I do not look at stocks that do consolidation. I only deal with trending stocks and they have to be of excellent quality. Trending and excellence go hand and glove it turns out.

By annotating stocks with trendlines and their channels and their internal formations, you get to take all the market offers from your lists of trending stocks. I use the "unusual" volume as a sort so that i have time to enter after the leading indicator of price shows the price will be lifting off the trendline.

To have a day's advance notice of the volume making the move, I use the leading indicator of volume which is the STOCH (5, 2, 3) fast line going upward through 50% see the bottom indicator.

Jack, is it time to buy GMXR now? I observe the price greater than the upper trend line, volume increasing and fast stochastic indicator value greater than 50 %. I am using bigcharts.com and bigcharts indicators are a little different than yours. I do not see the failure to traverse.

 

[mparkernys]

Quote from Hook N. Sinker:

Jack, is it time to buy GMXR now? I observe the price greater than the upper trend line, volume increasing and fast stochastic indicator value greater than 50 %. I am using bigcharts.com and bigcharts indicators are a little different than yours. I do not see the failure to traverse.

===============================

well above 3 year trendline, BUT facing the top of the LRC at 46.23. RSIWLR shows continuation to that point probable, but stock must hold the 42.14 support area

imo, of course !

mp

 

[taowave]

Quote from mparkernys:

===============================

well above 3 year trendline, BUT facing the top of the LRC at 46.23. RSIWLR shows continuation to that point probable, but stock must hold the 42.14 support area

imo, of course !

mp

where do you get 42.14 as support....i assume you are looking at the dailys since you brought up the 3 year trendline..Would you be flat here as it diddnt hold your support level???

 

[Spydertrader]

Quote from taowave:

where do you get 42.14 as support....i assume you are looking at the dailys since you brought up the 3 year trendline..Would you be flat here as it diddnt hold your support level???

See attached GMXR daily chart ....

Based on this chart, one anticipates further price degradation prior to this morning's open. Price may hold at the weekly pivot (pink line), but I anticipate additional downward movement until price reaches the right (lower) trend line. To avoid any argument over hindsight vs. realtime analysis, forget what one should see prior to today, and monitor GMXR using your own charts, over the next few days, and note the changes as price approaches the blue uptrend lines.

Good trading to you.

- Spydertrader

Edit: Once again all trend lines were drawn in prior to today.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1263729>

 

[VSTscalper]

Nice to see the tread back on topic.

This is how I see GMXR....on a 15 minute chart. While I don't trade equities anymore....just Futures....this is how I would trade GMXR. A 15 minute chart would be an eternity for me....since I am really a Scalper....on the Futures. But....the methods are the same....whether I am Scalping....or riding a Trend.

This shows how I use Trendlines....with my indicators. I consider Trendlines....as a Support & Resistance....just as I would the normal S & R horizontal line.

Good trading to all.

VSTscalper