House of If You Can Draw A Straight Line
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The first is drawn incorrectly. If one waits that long, there are no overbought conditions, and it is unlikely that the first parabola would have been traded in real time. Nor is it likely that the second one would be traded since the line would not be drawn until the move was already over. Therefore, the purpose of the trend line is defeated.
As for the second, the purpose of the thread is to illustrate principles without regard for entries and exits. There's plenty of that in the previous journals. But if all of this was done in real time, you must have done well.
As for the second, the purpose of the thread is to illustrate principles without regard for entries and exits. There's plenty of that in the previous journals. But if all of this was done in real time, you must have done well.
And the lines begin to multiply, affecting both simplicity and clarity. And since your "new" channel can't be drawn until Thursday, you've already missed out on two very profitable trades.
Drawing trendlines and channels in hindsight is of no value except with regard to chart review (and showing people how to draw them).
The trendline and tentative channel line begin here:
And if one had drawn in the lower limit of this channel as soon as he had a lower high swing point, around 0945 that day, he would have provided himself with a tentative target:
This has nothing to do with hindsight if one is reading the chart from left to right. A lower high is a lower high. A lower low is a lower low. They exist independently of the trader. What the trader does with them is not the responsibility of the price points themselves.
Drawing trendlines and channels in hindsight is of no value except with regard to chart review (and showing people how to draw them).
The trendline and tentative channel line begin here:
And if one had drawn in the lower limit of this channel as soon as he had a lower high swing point, around 0945 that day, he would have provided himself with a tentative target:
This has nothing to do with hindsight if one is reading the chart from left to right. A lower high is a lower high. A lower low is a lower low. They exist independently of the trader. What the trader does with them is not the responsibility of the price points themselves.
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Your first post, I see. Well, as Gringo says, it depends on one's choice. Or choices. Since we are as you point out in the middle, there are and have been a lot of dramatic moves back and forth, often ending up where they started. These won't go on forever, but they can go on for quite a while (just review the actions in the middle over the past year or so). AMT isn't going to be of much help in these situations, except insofar as it forewarns the trader that trading in the middle is not going to be a breeze.
A daytrader, however, isn't going to want to wait until price gets to the upper or lower limit of the trend channel before doing anything. But he does have the SLA to lean on. As long as he's not obsessed with jumping on anything that moves, the SLA can be enough to steer him in the right direction and keep him there. That is, after all, what it's for.
This morning, for example, even though we were hovering around the middle of the weekly trend channel, again, the failure of the NQ at the overnight high was noteworthy, not because it's a "set-up" but because of the fact of the failure itself. Whether or not a trade like this is worth taking depends in large part on how afraid the trader is of taking it. As for the exit, same old same old: a break of the supply line.
As to one who trades a much longer interval, there are choices to be made here as well. Does one want to exit when he reaches this middle, or does he want to hold on and wait for movement to the opposite side? What if price reverses at the middle and works its way all the way back to the original entry? Those who have spent any time at all with the SLA and how it's applied to exits will have learned that a re-entry strategy is essential. AMT is, after all, theoretical.
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