I'm trying to figure out how to correctly draw trend lines. I think i'm drawing them correctly but would love a second opinion.
Old School technicians will tell you you need to connect the lows on an up trend and the highs on a down trend. What you have drawn approximates a channel. The correct trendline as per textbook definition in your chart would be the rightmost line until around about 2/10 when a new higher set of lows started to print. Some prople swear by tendlines and the breaks thereof, but if you're going to use lines you might want to consider a moving average as they are by definition more dynamic to price movement and you dont have to get into all that messy drawing slopes and such.
I seldom frequent this site any longer, any even less frequently post. However your chart is a blast from the past and brings back fond memories. I haven't seen HL only bars for years. It appears you once followed the AHG thread, so I am compelled to respond. The username shortskirt also helps, I am a sucker for the ladies lol... anyway, I have a great respect for Anek. He was instrumental in developing my TA skills and success as a trader. In that regard, I promised to never divulge any information he shared privately, which I will always honor. So I do not post chart's with TA analysis. The concepts are not mine to share... That being said.... I believe that the TL concept was originally shared in the AHG thread, so I feel comfortable commenting on it. In this particular case, the key concept is Trend line fanning. DBphoenix threads are very good reference. I suggest you review his thread In your SS, I would move the TL because a HH was plotted and the original TL was breached twice. If it were only breached once, I would monitor it along with the newly drawn TL. Regarding your copied "channel TL" imho the correct starting point is always between the first two anchor points, your TL has three touches, so you "could" move it to the place you started yours. Your example is an old obvious trend, you could actually treat it as an ascending triangle, rather than a parallel channel, just a thought... As a rule I normally do not move channel lines, if a TL is fanned, I may create a new channel line. Then either monitor both if still valid by my rules or suppress the original. TA is more art than science. Good luck and watch out for brisk winds. lol... If DB, NoDoji respond to your post. I would pay attention, there are a few others. but the majority of ET, I would take with a grain of salt, actually a cup of salt...
I have to wonder why you're asking this now after nine years, but . . . What is the purpose of a trendline? What is the purpose of a trend channel?
You are a fan of LBR? I liked her interviews in Floored. Your inquiry is an important one. The utility of having price boundaries that you trust cannot be overstated. It's good that you are using charting software that allows for precision in the slopes of lines. The value of a "snap to" software feature seems to be lost on a lot of programmers who don't trade. Looking at how others use lines to trade so that you can compare may have some benefit. No doubt there are a lot of examples available out there, most of them bad. If you learned the nomenclature, you could follow the better ones. This is probably stating the obvious, but I would avoid examples where the guru uses free charts downloaded from the internet that look like they've been annotated with MS Paint.
SS, 1st attachment - I took your rendition (or as close a approximation as I could) and extrapolated the next set of lines 2nd attachment - I drew the lines how I see it HTH RN
This is why I asked my questions, but the OP hasn't responded. If one believes that trendlines and trend channels should incorporate all or most of the price movement, then he loses all the OB/OS information, and that can be important, particularly with regard to AMT and the continuing upmovement in this particular instrument. The lines in his post are more or less correct, though perhaps not for the reasons he thinks. In order to draw these lines correctly, he must know what they're for. Otherwise, they're just lines.
I looked back at the chart i posted and wonder why i had not started the upper parallel trend line on the first swing high as you mentioned. I guess the price action seemed to fit in between that channel better but i understand that it should have started between the first two swing lows.
Yes i have been on and off this forum for quite a few years! I have looked at a lot of charts over those years. Often those charts have had many different indicators on them like MACD, CCI, MAs etc but not trend lines, so i really have not worked at drawing correct trend lines until recently. To me the purpose of a trend line is to help me identify who is in control. Whether that's the buyers or the sellers. I realize that i don't necessarily need lines to show me that, but i'm not able to see it as clearly by just looking at price. I like to think that the upper and lower trend channel lines are places at which buyers and sellers may step in and create more supply and demand.