Do Trendlines work?

[hank rollins]

Quote from tradersaavy:

OK

So, if you are sincerely interested in productive dialogue regarding the utilization of trendlines then ask any specific questions that you have and I am sure that those who feel that they have something valuable to offer will do their best.

certainly, i am quite sincere. trendlines are a geometric illusion. people have a strong desire to assert order onto randomness and the trendline fits this bill perfectly. a trader who is in a profitable trade will, of course, see the trendline as holding price down or up, the trader on the other side of this trade--the losing trader will percieve the trendline entirely differently.

<i>"trendlines can not withstand serious critical scrutiny. it is born from the geometric desire to suppose that a bull or bear market should proceed at a constant speed. it is ludicrous to try to confirm the constant speed of markets by trend lines"</i>

William Gallacher
"Winner Take All"

ofcourse this is all predicated on the interesting notion of predicting future price by looking only at the past....

the entire trend discussion, trend lines, et al is ALL based on ones perception. anecdotal evidence means nothing in this regard.

 

[BSAM]

Quote from hank rollins:

.....people have a strong desire to assert order onto randomness and the trendline fits this bill perfectly......

Uuuuuh.....Exactly. That's the whole point, Surfer.

 

[BSAM]

Quote from hank rollins:

.....a trader who is in a profitable trade will, of course, see the trendline as holding price down or up, the trader on the other side of this trade--the losing trader will percieve the trendline entirely differently......

Yeah, man. Now you're catching on!!! That's why (as you clearly identify) the person on the other side of the trade is the "LOSING TRADER"!!!

 

[hank rollins]

Quote from BSAM:

Yeah, man. Now you're catching on!!! That's why (as you clearly identify) the person on the other side of the trade is the "LOSING TRADER"!!!

ok, bsam, why doesn't this "losing trader" see the trend line and reverse. they are not hard to spot, you know......

have you read gallacher's book?

 

[hank rollins]

Quote from BSAM:

Uuuuuh.....Exactly. That's the whole point, Surfer.

self delusion is the point? just joking. when you look at things like trend lines from a detached critical perspective--- the sand castles begin to fall.....

my trading evolution continues......

 

[BSAM]

Quote from hank rollins:

ok, bsam, why doesn't this "losing trader" see the trend line and reverse. they are not hard to spot, you know......

have you read gallacher's book?

You tell me, bro. You seem to clearly understand what is going on with the tool we call a trendline. Could be because he is a newbie, because he is caught off guard, or maybe even because he has lurked on ET and has bought what some guy named Hank has previously stated can't exist. (But, oh that individual should read Hank's most recent posts!!! )

No, I haven't read that book. But why would I want to be convinced something doesn't exist when I see it every day???

 

[John Merchant]

Duard. Not one of my patterns, but I get it. Since I cannot read the tape for shit, I have several different visualizations of it to see those cases. One of my favorites is watching price and volume action in a floor rotation after a significant and "obvious" move. How delicious it is to see price retrace just one tick beyond where the flood of entries occurred, and to see the flood of panicky exits. A tape visualization of breakouts from tight consolidations is just short of orgasmic. I love consolidations. They're like pussy. The tighter, slower and longer lasting, the better. Apologies to Wolfie. Mike.

 

[jem]

hank you are pretty ignorant for a journalist.

Go talk to mangers at funds and ask if they have every been step up buyers or step down sellers.

Go talk to floor brokers on the nyse and ask them what happens when most of the crowd is looking to buy at good prices. Especially in non index stocks.

What happend in the old days when there were tons of vwap buyers and sellers.

Finally please explain the following

Every day a stocks low is a half a point higher than the day before. And each day you see a buyer for size and refreshed size showing up at the lows.

Is that imaginary could you draw a line through that?

 

[hank rollins]

jem,

i understand what you are saying. questioning and testing commonly believed trading notions objectively is what i am trying to accomplish. thank you for the input !

 

[jem]

hank you said trendlines are a geometric illusion.

We were not talking about trading strategies.

I was commenting on your illusion deal.

Once again. How the hell is rising lows on a daily chart a geometric illusion?


for instance are the rising lows on UHS lately an illusion?

I mean is it making higher lows and a daily chart or not.

Come on tell me it is an illusion.



I mean a journalist should be precise in his terms. You should say, my friend VN runs very limited tests, and in those tests his limited mind can not develop profitable trading strategies.

One of the limits of his testing is that you must take every trade in every condition and you must subract out when price does not act random. ( I read your interview, VN was mincing words and his conditions pretty much invalidated his conclusions)