Price and Volume

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The first step for a trader is to determine the current trend of the market.

The second step is to determine one's place in the current trend.

The third step is to determine the proper timing of one's entry into whatever it is he's trading.
 

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Those of you who are working toward "indicatorless" charting may find the AD line and the AVDVd (advancing volume/declining volume differential) helpful, as with the chart posted here.
 

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Let us believe that it is possible to profit through economic changes by following today's trend, as it is revealed statistically day-by-day, week-by-week, or month-by-month. In doing this we should entertain no preconceived notions as to whether business is going to boom or bust, or whether the Dow-Jones Industrial Average is going to 500 or 50 [This was published in 1956]. We will merely chart our course and steer our ship in the direction of the prevailing wind. When the economic weather changes, we will change our course with it and will not try to forecast the future time or place at which the wind will change.

-- William Dunnigan
 
Trendlines

As I noted on Thursday's chart, I'm going to spend more time with trend and trendlines this month since I've said just about all there is to say about the relationship between the price and volume slopes (the gray lines), which is why I stopped annotating every single example.

Some readers may have missed my note that there's a file on trendlines at the Yahoo site (click Files below). If you're interested, download and study the file. If you have trouble downloading it, read the messages at the site. Do not email me with problems. I'm not sleeping with anybody from Yahoo, so I can't help you any more than they can.
 
I'm playing around with graphing trendlines. Do you find it beneficial to use semi-log vs normal ruling on your graphs? I would think it would only matter if one were utilizing a strategy that depended on the absolute slope of the trendline. Relative differences are obvious.

I did some searching here on ET and some folks are pretty passionate about this. I'd like your opinions.

Mamis seems to use normal ruling (non-log) in his books. I haven't finished reading them, so I'm not sure whether he addresses this.

Cheers,
Tim
 
I wouldn't say I'm passionate about it one way or the other, but I've never used log charts. And the trendlines aren't going to come out the same, assuming that you're using trendlines to show trend. I assume you've read the file on trendlines? If not, click Files below.
 
Sometimes it takes all my resolution and power of self-control to refrain from batting my head against the wall.

-- Joseph Conrad
 
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