Quote from traderlivermore:
One more thing:
Channels are better, they are the natural extension of trendlines.
snip....
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All most al discussions of trendlines refer to the right line as the trendline and that the channel is formed as a parallelogram formed with the trendline and the intitial price volaitility as the left channel line.
As volatility increases (another measure of a trend beginning) the spread of the parallel lines is widened by adding another left line projection.
All trendlines and their channels are drawn at the BEGINNING of trends in the space to the right (half of the width of the chart) of the bar being formed.
Then as money is made by trading the long diagonal of the parallelogram, at the end of the long diagonal the next trend begins. You have all the points required to draw the next trend channel by the time the price leaves the prior channel.
This leaving of the prior channel at the point where the ensuing channel is completely drawn and projected is well into your current trade and well after you have taken profits on the prior long diagonal of the prior trendline channel.
You can observe here in this thread that almost no one is drawing trendline channels on the fratcatl that is most tradable from the viewpoint of monitoring and chart annotating.
It takes three points to draw a channel in the trading channel. that trading channel esists in between the channel formed in the next slower channel and is a construct that is made within that slower trend channel.
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Anyone can work this out quite simply by looking at the long term trends the intermediate term trends, and the positiontrading trends to arrive at the boundaries of the intraday trading trend channels. It is much less an art than a science.
Once a person understands pace, then they can determine whether or not to reade the traverses of the intraday channels.
On average every day has four intraday trend channels. The H/L range of the days as they go by gives you the measure of the intraday tend channels as a first approximation of the potential value of the long diagonals.
There is one very nice addition. When you are approaching the contemporary R or S that exists, you will see that the price action is a retesting of those values and as a consequence a trend channel is formed at the slope of the R and/or S slope which is nearly never perfectly flat. Obviously you make more money profit velocity at thses time because you "see" chop which is a periodic entrained (within a nearly flat trendline channel) higher frequency than the four trends of an average day.
Luckily, the day is broken into am and pm with a low volume interlude interposed whereby there is not enough activity to support trends. You can leave the market for this period of lowprofitability and greatest daily risk. Then, fortunately you beging your profit making as the pm market wakes up and you are lead into the first pm trend channel with a bracket entry where the market dictates to you the direction of your trade.
where a person the begin to annotate trend channels for 10 of 20 days in the manner described, he would have the answers to all the questions this post raises.
Keeping things this KISS will give you a good multiple of the daily market H/L range since ther are four chances to make trend proifits across this range and their are additional profits from the times the S and/or R are tsted and you get profits from the first movement in the pm BO.
AFTER KISS comes intermediate and then expert trading.
Intermediate trading involves using and additional variable and expert trading comes along when you trade with sports memory primarily.
The first difficult step is to move the forming bar to the middle of your chart. This step is the step that frees your mind from the need to mistakenly predict. It also shows you just how much of the past is involved in making analysis from monitoring. If you have a small amount of data to use to get three ppoints to draw the parallelogram , it is less likely that you will be drawing many possible alternatives.
How long in minutes is a long diagonal if the day has a slow middle and two trends am and two trends pm?
How many actions are taken in a day to make three times the daily H-l point range?
