thank you, guys
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Do Trendlines work?
- Thread starter duard
- Start date
terry , could u post a chart, it doesnt have to be current,thanksQuote from Terrylee:
There is no such thing as holy grail but stuff that eventually works better than average.
Here is an example of what I do with trends:
For each parameter of my system:
- I do a trend segmentation
- I build a matrix for which each row is made of a trend
- I build the autocorrelation matrix
- I do a Principal Component Analysis on this matrix
This model looks at the temporal unfolding of a series of contiguous trends. I use this information to generate entries instead of projecting a trend which I agree is stupid.
I haven't really kept up with the thread but I'd thought I'd say something here.
I think trendlines are far less useful than regular bar and price action signals. They can definitely work their magic at times, but one of the problems is that I find they need a lot of adjustment and can't often be trusted unless there are 3 solid hits and/or the market is synched in time heading into the third hit (as in 3 hours from point one, 3 hours from point two, and approaching the area after another three hours).
I will only trade off a trendline if I see the market react to it fairly aggressively.
This chart I made a few months ago sums up how I feel. At the time, the point was that I used to take reactions off of pullbacks to trendlines, and as the chart shows trendlines don't often signify any change in trend and reactions to pullbacks don't necessarily mean much either.
Edit: the last signal has more to do with the inside bar (which was still bearish) - haven't looked at it in a while.
I think trendlines are far less useful than regular bar and price action signals. They can definitely work their magic at times, but one of the problems is that I find they need a lot of adjustment and can't often be trusted unless there are 3 solid hits and/or the market is synched in time heading into the third hit (as in 3 hours from point one, 3 hours from point two, and approaching the area after another three hours).
I will only trade off a trendline if I see the market react to it fairly aggressively.
This chart I made a few months ago sums up how I feel. At the time, the point was that I used to take reactions off of pullbacks to trendlines, and as the chart shows trendlines don't often signify any change in trend and reactions to pullbacks don't necessarily mean much either.
Edit: the last signal has more to do with the inside bar (which was still bearish) - haven't looked at it in a while.
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Quote from trackstar:
If you understood how to draw them you could probably make more sense of them.
I understand a good bit about trendlines, I just think they have a lot of limitations.
I'll keep quiet and observe the thread for a while though since I haven't kept up with it, unless people have questions.
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http://bigcharts.marketwatch.com/help/glossary/detail.asp?area=trendlines&word=0 they are pretty simple, and older than noah