Quote from tradersaavy:
maestro and others wondering how trendlines can add value to your trading:
Please note that the charts that I put up a few posts back were REAL TIME.
Trendlines don't have to be used just to trade with the trend or trade reversals.
As 50cent stated, the lines represent possible S/R areas where price may halt or stall.
If price may halt or stall then this does set up a possible/probable near future event.
And, as 50cent mentioned, this combined with understanding some dynamics of the market that you are trading, and nothing else at all, may be utilized by a trader to profit.
You make some nice points.
I looked at both of your charts.
I would have annoted your first chart in a manner that showed how the path was going to develop that did occur.
While others than you feel the thread has exhausted the topic, I can see that you recognize that only the surface has been scratched.
The several who are making money are fairly specific about the the utility that they find in using trendlines and the associated channels
Since the late 50's, I have depended upon channels for all types of trading that I do. By making the list below, my intention is to , perhaps, open a few windows for those who want to improve their money velocity (rate of making money) and those who still are building their minds to be able to monitor and analyze what is there to see for proper decision making and action.
1. Channels from trendlines most be projected ASAP. Then extended as the market continues to operate at that operating point.
2. Channels from trendlines can be used to eliminate risk for traders who are progressing from beginner to intermediate to expert. They are, in fact, the primary judgement device for risk management.
3. Channels overlap and in doing so, when they do, enable traders to take maximum profits for that interval and take the next position to continue to accumulate more profits. (Opitimizing the use of market time.)
4. The volatility of the market varies. Channels can always be managed to accomodate volatility changes. If fact, changes in volatility are most easily observed in the context of channel axtrapolation.
5. trenldine based channels provide the most rational basis for extending market "know how" and understanding.
6. price formations fit into two categories: those that occur within channels and those formed using channels to complete the segments of the formations.
7. there is a heiracrchy of channels in play at all times. Knowing and using that heirachy helps a trader to maximize money velocity. One of the keys to enhansing any equitiy curves steepness is to operate within the channels that can make the most money per unit time (see 2.)
8. continually annotating channels is the fastest way to build the mind for making money. This is, in fact, the fastest way from your current status to "sports memory" for trading at highest efficiencies. The ratio of traces (before and after) in the brain is exponential rather than linear; therfore, using the cardinal market consideration (visually speaking) to exponentially develop is the critical path.
9. Using trendline channels is one of the most effective ways to obliterate past mental errors in mind building. a six lane highway of traces can obliterate most any trading irrational building. There are exceptions. ftrader, recently, showed how trading externalities built an orreversable trap in his life. He, logically, retired from discussion and moved back into his cultural mindset somewhere else.
10. the fact that tredline channels operate within other channels is an orthagonal concept related to families of mathematical expressions. Families behave in one way, fractal "nesting" operates in another manner. there is overlap. The overlap allows you to use a "sharing" mental concept to extrapolate learning channels fractal analysis in a family of expressions context.
11. Adding to price channels the channel concept for volume is a major synergistic advantage. 50cent and others have this advantage down cold. The cardinal theme of this is that you always know what is next in price from the present formations of volume. And this knowledge is directly in the context of the extrapolated trendline existing price channel. This item (11.) has a subset equal to the first 10 items cited above.
What I am suggesting is the consideration of an example. It was presented by someone here who has a comprehensive terminology for personal development. It involves three components. a. gaining knowlege from authorities (he cited four books). b. doing primary reasearch. c. doing secondary research. From him I learned what these three things are. It turns out I did them informally for about 50 years. In one of my buildings here I have about 25% of it filled with boxes. (when I did a TFSE on my corporations, I took to my rsidence four straight truck loads of personal research stuff...lol. Filled all the box stall in my horse barn....(but i had bought another mennonite barn and had a crew dismantle and move it...so I could have an operating barn.)
What transpires when a person purposefully goes through a, b, and c. A mind is built that operates and is effective. The building of the mind generally is a by product and not a conscious primary effort. But what if a person took the time to learn about himself as part of his life style. Learning in a medical sense and a psychological sense is a minimum that can be done. It does lead to needing malpractice protection as part of practical training because of licencsng, etc in the formal context, but that is part of knowing how things work in life.
a. If you use the above list and annotate it from the books recommended here, you get only a little ways own the road. I have done that job over the years as formal texts are created in these categories.
b. primary stuff is the hardest because it is so difficult to learn to monitor the markets. As I read ET, I feel that almost no one does primary research here. It is unaffordable as people tell it here. secondly, there are few people who have any skills to do it. Thirdly it is not written about mostly anywhere (that takes us to c.
c. secondary research. I have lectured at most business schools, etc. Still today I am a finalist judge of the annual business school competitive 36 hour shoot out.
So obviously there is an alternative shortcut to really getting this stuff down to make a lot of money fast. For ET, there is the eternal landmine crew out there fucking things up all the time so some alternatives are moot. We all know of the niave turds that screw around endlessly. Then there are the intentional dumbies who roll on incessantly as AGM's (attention getting Mechanism users). In the face of this noise though, there is a very rapid way to do things. Collaberation is what is called for.
My list is not the scope and bounds of the opportunity. For sure there are many many items that can be synthesized. from this thread alone, I discovered that i should be making tapes. the two posts of the charts a couple of pages back cemented the idea. I am going to use my architecture computers to montior my trading computor bank. I shall have a way soon of making tapes that show the extrapolation and i will have commentary in advance of the actual unfolding that will happen. This is not a, b, or c. It is more just creating study tapes for building minds. i have advocated repitionof ideas at no risk for years and noone does it, of course. Today's world is immediate no effort satisfaction or not gaining the prize. People who have not experienced wealth do not know its value and cannot strive to be wealthy. People with wealth wind up in a self selecting group and cannot relate to others... At the end of life my rules have changed. Personnally, I hope a lot of people learn how to make money. It is one big shortcut to getting help to where it is needed. Collaboration is the name of the game. Learn that as soon as possible. Different experience is what creates peer relationships. Around that table the younger people can contribute their fresh gifts to older guys who have made all the mistakes and learned from them.
