Does Anyone Use Trend Lines To Signal Exit Points? And Can they be automated?

[achilles28]

Quote from Hook N. Sinker:

I use trendlines as a guide. They work well. I am having trouble coding trendlines into my trading program.

Well, you're probably 10 steps ahead of me. Im still learning how to program in Wealthlab.

Have you thought about programming a time and/or price delay into your trendline generator? I've found the natural tendancy of the market is to pullback after a decent move, thus violating the original trendline.

Incorporating a time delay or lag before generating the trendline would be effectivily similar to Grobs trendline recalbriation of point three - skipping the first point three entirely and connecting to only the second point 3.

If you're not familar with Grob, don't worry, you'll have no idea what I just said. Its worth checking out.

The net effect of adding a time delay or waiting until after a major pullback then reversal is a more viable and sustainable slope to the trendline that can better predict the movement while avoidng several short term violations.

 

[achilles28]

Quote from tradingbug:

It is my perception that Grobs contributions are excellent. He has laid out a model for others to follow to become a wizard. My interpretation only.

I rarely exit on TL breaks. It is their primarily for protection. I mostly exit on the other side of the trend channel where the most profit is made.

Yes, Im pretty much of the same opinion. A real treasure.

His confluence theory of price movement - the nexus of long, medium and short terms trends pinpointing the next area of significant movement - is particularly exiting.

I still don't get exiting on the left side of the channel though. I haven't read all of his work. Perhaps I've missed it? But the idea of exiting on the left and morons exiting on the right still eludes me?

I understand the justification - to preserve and lock in profits before a decline. But I dont understand how a trendline failure can be predicted at the left side after a full traverse from right to left. Since we dont know it'll fail when we're on the left side until its already gone to the right, and then failed. Know what I mean?

 

[Walther]

Quote from achilles28:


1/
What interests me regarding your post is the predictive ability trendlines can have to spot breakouts and contractions ahead of time.

2/
Your comments also peak my curiosity because they seem to parallel much of grobs/hersheys work in the area of trendline prediction.

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1/
Not just that , trendlines can identify dominant price levels

2/
I am light years ahead of Jack as far as trendlines go.. There is no paralel whatsoever.