Rules for Drawing Trendlines

Obviously you know horizontal lines are not trend lines, right? Even when price is range bound.

Horizontal TLs are considered trend lines per published books going back to the 20's written by the founder & masters of classic TA. Price can be congested/sideways, that is a trend. In fact a great deal of classic T.A. is built upon horizontal TLs that border various geometric price patterns.

I never comment about option trading since I have no experience at it. I always comment on classic TA when someone's opinion is far from hard facts since I have been practicing the academic model of it for many years.

And I agree with Xela about horizontal TLs being far more reliable.
 
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comagnum said:
Obviously you know horizontal lines are not trend lines, right? Even when price is range bound.

Horizontal TLs are considered trend lines per published books going back to the 20's written by the founder & masters of classic TA...
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Post a passage.
 
dklepak said:
Hi Everyone. I'm a new member to this site and also new to the trading world. I was hoping that someone can help me out with defining the exact or concrete rules for drawing trendlines. I read couple of books on how to draw trendlines, however non of those books give a specific definition where to start drawing them. I read Trader Vic's rules on drawing TL as well as Tom Demark's rules on how to apply them. What I am struggling with is the idea where exactly do I start drawing TL on the lower timeframes as there is a lot more noise in the market. It is easy to draw trendlines on the monthly, weekly and daily charts, but when it comes to the 4 hour and 1 hour charts I am struggling to find the right anchor point. Is there anyone on this forum who specialize in Trendlines and can help me out. If yes, I got the below questions.

1st Question.

When it comes to 4 hour and 1 hour chart. Do you start drawing Trendlines from the beginning of the trend where you can see a clear sequence of HH and HL in uptrend (as an example? What about the situation where for a short period of time the HL was broken but then it created another HH. Do you look at more data or you just draw the trendline from the low point that preceded the new HH?

2nd Question.

How do you adjust trendlines? Do you you look at the most recent HL and connect it with the anchor point? What about the swings inbetween? are they deemed irrelevant?

Please see the screenshot below for illustration. Which of the TLs are correct. A B or C?
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I draw trend lines between swing levels. I re draw the lines when a trend line is broken.
 
Why don't you look it up yourself or buy a book on it?

Here is a post from Peter Brandt - he is one of the market wizards 5 decades of strict adherence to classic T.A. as defined by Richard Schabacker (1930's). Look at Twitter yourself - this is not altered. This pattern, as many do, depended on price closing above the horizontal TL.

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We recognize trend lines to identify areas of support and resistance. The angle is not the issue, support and resistance are the issues. Zela and comagnum are pointing out that horizontal lines can represent strong areas of S&R.
 
I wonder if Renaissance Technologies uses trend lines and if they'd raise their eye-brows if you mentioned them in an interview.
 
comagnum said:
Why don't you look it up yourself or buy a book on it?

Here is a post from Peter Brandt - he is one of the market wizards 5 decades of strict adherence to classic T.A. as defined by Richard Schabacker (1930's). Look at Twitter yourself - this is not altered. This pattern, as many do, depended on price closing above the horizontal TL.
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A cup and handle pattern with a horizontal line. Not a trendline. Where do you see the word trendline or TL? Where?

And I don't need to look it up. You do. You made the claim.
 
lovethetrade said:
I wonder if Renaissance Technologies uses trend lines and if they'd raise their eye-brows if you mentioned them in an interview.
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They are a quant hedge fund ...different species and discussion.
 
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