Do Trendlines work?

[tradersaavy]

A follow up to a post by Easyrider and Duard:


Summertime is definately in full effect.

Some traders that I trade with who have lost their ass all year trading reversals off of resistance/support have been racking it up recently.

Me, catching new trends in breakouts went in to a flat mode until recently when I adjusted to taking smaller profits, being that volatility is contracted.

In YM that is.

The more time I trade the more I realize that some of the old cliches are true. Especially : adapting to the given environment. Having just one style of trading may not make it if you try this style during times that are not appropriate for it.

 

[easyrider]

Thought Id bring one of my favorite threads back to the top. This trend channel was drawn before the market opened. I dont know why price follows these channels so often (Im still waiting for an explanation) but its definitely worth watching.

 

[tradersaavy]

Would love to see a few bars consolidate at one of these lines.
Consolidate meaning the bar sizes are small and somewhat inside each other.

Then a breakout from these contracting bars/trendline will get me in the trade.

 

[tradersaavy]

Here is an update of the triangle drawn above.
And, as usual, my posts are in realtime.

I don't say this to sound arrogant, I state this to add to the realness of using trendlines (along with some other technical analysis)

The chart attached here is the miniDow.

 

[JoeF_Rocks]

You have to use cycle trendlines in order to consistently (key word) time any market. They are the primary market timing consideration.

 

[tradersaavy]

What does cycle trend line mean ?

 

[tradersaavy]

here is a great, great triangle

I will play a break, however, cuz of yesterdays large range day, this triangle may have no energy when/if breaking.

 

[aus_SPIder]

only real problem i have with trendlines is that their subjective. I cant specify a particular gradient range or some other feature with which i can distinguish when drawing a trendline.

Envelope MA such as Keltners can provide approximately the same use but much less subjective.

 

[tef8]

http://www.stikky.com/0003-stockcharts/0003-fulldetails.htm

great little book that'll teach ya how to do them right.

 

[tradersaavy]

Quote from aus_SPIder:

only real problem i have with trendlines is that their subjective. I cant specify a particular gradient range or some other feature with which i can distinguish when drawing a trendline.

Envelope MA such as Keltners can provide approximately the same use but much less subjective.

It all comes back to the price action.

If price is respecting a 20sma, then the 20sma could be used to determine a change in price action should the 20sma break with other factors as well.

Or, if price action is respecting a Keltner, trendline, pivot point, etc.......... fill in my prior sentence here and it is the same.

For me, and for this thread, a trendline is not subjective in that you are simply highlighting an area on the chart where price action is showing support or resistance. Make sense ?