Thanks for the below and chart by bi9foot on previous page. Will see next week whether drawing these channels will avoid getting me into an overnight trade where gaps occur on the wrong side. I have a sneaky suspicion that it would help.
See attached chart of GOOG, weekly Should be self explanatory but if anyone has questions, please ask.
tradersaavy, Nice picture....almost perfect....Symmetrical Triangle....which had the Break Up....as it usually does. VSTscalper
Once again, trendline "magic". One may play a bounce from this line or play a break through this line, for just a couple ideas. Of course when to get it, when to get out it up to you. Or, if already long, the T/L may be a place to add, it may be a place for a stop, and on and on..... Point is: line has held at least 3 times, it is acting as support the "trendline is working" Oh, by the way, I personally may go short on a break of the line if it happens soon. There is some support not too far below though so this will be a quick trade.
the age old question. i have been examining trend lines for the past 14 years of trading. the answer would be really how you draw them and how you interpret them. you can clearly see if a market is in a down or uptrend depending on the time frame you are using of course. problem with the trend lines are what you would consider a break of the trend line or a confirmation of the trend line. in volatile markets there are many whipsaws that break through and then it just resumes its trend or is the trend nearing an end? succesful traders always trade with the trend. the problem is trends always end and then move the opposite way to start a new trend. the trick is you can't get on too late. if you do you will lose. there is an old expression "the trend is your friend" i would like to add my own expression to that "the trend will end" happy trading.
Triggertrader, Very true that the trend(line) is your friend until it isn't. The rub, as you say, is the chop. Trader Vic's 1-2-3 is as good as anything I've read and he tells you how to draw the damn things. The problem with news is that usually it isn't new to the people who are moving the markets unless it comes out of left field and then everyone gets a surprise - a nice one if you're on the right side of the line and not so nice if you're not. Trendlines in and of themselves have no predictive value whatsoever. As Taleb says always be aware of the possibility of being fooled by chance. lj
They absolutely DO have predictive value, remembering that no prediction with a chart is 100% guaranteed. Look at the very last example that I posted just a few entries before this. It was in realtime. Price came down the the trendline again and it bounced. One could have "predicted" that price would bounce from the trendline. One of the most common "predictions" or uses of a trendline is that it MAY act as support or resistance which CAN predict a bounce from the S/R area. I am attaching the chart I posted and below it, what eventually happened later.
Tradersavvy, Do you have any instances where in spite of your expectation that price would bounce off the trendline, it in fact didn't? I'm sure that you do and as you say yourself: "...remembering that no prediction with a chart is 100% guaranteed." All I am saying is that what a trendline can do is to alert the trader to the possibility, (which depending upon the particular circumstances surrounding a particular trade will have a certain probability associated with it), that something is going to happen. It does not say that it will happen with certainty and that would seem to be a point that we agree on. The great Einstein used to say that the value of a theory was to be found in its ability to accurately predict the results of future experiments. Experiments drive theory - period. The goal, I would suggest with folks who use trendlines in their trading, is to derive a set of parameters which would allow one to say that if this parameter set contains these values then with a probability between 0 and 1, this event will happen. To derive such a parameter set for the market would be to say the least, non-trivial but, I would suggest, not impossible because kortotic events aside, there is a finite collection of things that the people who move the markets can do. The first step in the search, IMO, is to appreciate that as a retail trader (and speaking only for myself) I ain't going to be moving the market in any meaningful sort of fashion. lj