Do Trendlines work?

[joepepper2001]

 

[tradersaavy]

Quote from tradersaavy:

Well, what I will watch for is a consolidation at the line and then a break below for a short. I am not predicting this, this is what I would like to see to set up a possible short scenario.

See attached chart.

 

[joepepper2001]

djt chart

 

[joepepper2001]

another transport chart

 

[joepepper2001]

$indu bouncing around support

 

[joepepper2001]

ym with fibs

 

[tradersaavy]

Dow bulding some energy here for a thrust.
(intraday type of timeframe)

Don't know which direction the thrust will be.

 

[tradersaavy]

Quote from tradersaavy:

Dow bulding some energy here for a thrust.

Wow, wasn't expecting THAT much of a thrust, but hey, what the heck.

 

[tradersaavy]

How one trader may make a play 'working' a trendline:
The thick red downtrend line on the attached chart is a good resistance area for a consolidation to build (energy to build) and then a move higher.

As well, the horizontal line at 13500 is a significant resistance area because of all the past heavy support/resistance. A trader could 'work' this area for trading decisions like:
* Go long if broken
* Go short at the resistance
* Take profits if long
* Take partial profits if long
* Move stop just underneath this area if 13500 is broken to upside

 

[Spectre2007]

http://www.elitetrader.com/vb/showthread.php?s=&threadid=64965&perpage=6&pagenumber=2694

if you have any doubt whether they work look at this mornings trade............. woooooooooooooooooooooohooooooooo.