TA question often asked... "Do trendlines work"?
- Thread starter Scataphagos
- Start date
Thats a daily chart,it wont help the way youve drawn it.You should have a descending into end of 22 start of 23 and then ascending to Sep/Oct.
You can easily switch to horizontals on that chart and have a wealth of levels to work off.
It works for me.
I trade of a daily chart. Long only. Mainly Canadain (TSE) and US equities.
Mickey,
There's a difference between trading and investing, and of course I know you know that.
Trading, as you pointed out.... yeah, you have to be quick. $SHOT this week was a perfect example of that. Do fundamentals have anything to do with the intraday or multi-day movement that can be traded(?)... absolutely not.
You said this:
"These sort stocks you describe, do you think you are the only one to recognise the FA value and then buying and holding? No, a trillion other fundamentalists have seen it too and the price is already baked in."
Of course I'm not the only one to spot this--duh. But what makes a company's stock price increase over time? The company grows, it makes more money per given share. Growth is baked in, that's exactly why different companies trade at different PE ratios and PEG ratio's. If you want quality, you have to pay more. But being "baked into the price already" doesn't mean the stock isn't going up over time. Far from it. Here's a great example:
https://www.elitetrader.com/et/threads/nvidia-the-next-great-tech-stock.305398/#post-4379800
Chipotles is another great example. It opened around $40 on the first day of trading. I got in, lost money, got back in, and made money, closing at $62. It was a simple to understand business model, and the stores were friggin packed. And as you pointed out "a trillion other fundamentalists" saw it too.
I would be willing to bet, had you taken the minimum PDT amount of $25K and bought the day I sold @ $62... between then and now, the money you have made (or lost?) using that $25K chasing intraday movements on stocks that aren't worth the paper they're written on... would pale in comparison to what you have made holding CMG as those "trillion other fundamentalists" joined the party. Your $25K would now be worth $899,000. Did your $25K make that much since 2007?
Sure, that's a cherry picked example, but one I am personally familiar with. Another one comes to mind, Quanta Services. Certainly no CMG, but 500%+ over 6 years.
https://www.elitetrader.com/et/threads/quanta-services.312653/
Hey, I do dozens of round trip trades daily, and fundy's have absolutely nothing to do with anything... I realize that. But I also invest for the long term using quality stocks.... and even at that, I have screwed up by getting in and out based on my view of the greater tide. My returns in those accounts would be far better... by a longshot... had I just bought, forgot, and used dividend reinvestment. Now we're talking a 25 year time-frame here... but still.
Ya know Warren Buffett... if he read your post.... he would fall down laughing (and probably break a few ribs or something at this point) because Berkshire is the quinessential example of what I speak. Now you're entitled to your opinion, but history is on my side here.
Here is the best explanation of the difference I have heard.
"Investors own assets.
Traders speculate on the price movement of those assets."
I agree with @semperfrosty.
I'd draw the trendlines as below.
With your *trendline*, if one of the 2 fractals to the left were slightly higher/lower, the *trendline* would be in a completely different location to the right.
Not saying it's wrong though as I see others draw it that way also.
I am not endorsing OP's posts on the object. However, discretionary trading is a very personal thing and I find the humble trend line (more accurately a trend ray) and its clones to be a neat tool.
Reference sources are widely known and available. I've read Schabacker, Gann, Elliott, Edwards and Magee, Sperandeo, Hershey and others. But to make it useful, as with any tool, a repeated religious experience in actual practice is required. A lot of money has to be made with it. This is a very personal thing. People who do not have such experience will never trust it or believe it.
Of course, stating that trend lines are useful and showing that they are are two different things. My viewpoint from experience is that no one who actually makes money will make a demonstration in public, or even show charts like the OP.
In any case, I will conclude by saying trend lines are not subjective but are drawn objectively every time according to rules. They are drawn in advance and they are extended into the future ahead of current price. The common convention is that they always require a minimum of two points to be drawn, but this is not accurate. Only one is usually required.
Happy Thanksgiving.
Reference sources are widely known and available. I've read Schabacker, Gann, Elliott, Edwards and Magee, Sperandeo, Hershey and others. But to make it useful, as with any tool, a repeated religious experience in actual practice is required. A lot of money has to be made with it. This is a very personal thing. People who do not have such experience will never trust it or believe it.
Of course, stating that trend lines are useful and showing that they are are two different things. My viewpoint from experience is that no one who actually makes money will make a demonstration in public, or even show charts like the OP.
In any case, I will conclude by saying trend lines are not subjective but are drawn objectively every time according to rules. They are drawn in advance and they are extended into the future ahead of current price. The common convention is that they always require a minimum of two points to be drawn, but this is not accurate. Only one is usually required.
Happy Thanksgiving.
Genuine query, do you have an example chart of one point only SLOPING trend line?
Thx.
I suppose it will be a parallel line?
I no longer show charts in a public forum since like 2003. Recently one guy here kept asking me for charts in PM and I almost relented but I'm glad I didn't considering how the relationship turned out. Not that giving him my charts would have helped him much.
If it's a clone, yes.
Gottit.