Do Trendlines work?

duard · Apr 30, 2005

Jack,

In fact I have been using a crude auditory monitor which in fact has been probably my best monitor. I have a volume bar chart set at 100v and when volume hits the sound of the processor humming tells me what's up and when it slows then that is the time to reevaluate i.e. is this a continuation pause or reversal.

I'm going to take your advice and further quantify this "electronic squak box" as it opens up another sensory channel.

Thanks again.

nzbryant · Apr 30, 2005

Jack - good advice re: getting more senses involved. Some people may think your stuff is weird, but they are probably not making a lot of cash

50 cent · May 1, 2005

Quote from nzbryant:

Jack - good advice re: getting more senses involved. Some people may think your stuff is weird, but they are probably not making a lot of cash
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it's not weird, however it could be phrased in a way that would make it easier to digest. the concepts are good but to actually understand, let alone absorb them, from what is written, takes quite an effort. well i use my own concepts anyway. but still i am making a note of this.

BSAM · May 1, 2005

Quote from duard:

Jack,

In fact I have been using a crude auditory monitor which in fact has been probably my best monitor. I have a volume bar chart set at 100v and when volume hits the sound of the processor humming tells me what's up and when it slows then that is the time to reevaluate i.e. is this a continuation pause or reversal.

I'm going to take your advice and further quantify this "electronic squak box" as it opens up another sensory channel.

Thanks again.
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duard.....

You wouldn't be the artist formerly known as nwbprop would you?

duard · May 1, 2005

Quote from BSAM:

duard.....

You wouldn't be the artist formerly known as nwbprop would you?
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Sorry not me,

I've been trading awhile (7 years) but I only recently discovered ET. I appreciate everybody's willingness here (for the most part) to discuss trading. I started the trendline thread because I use them and as can be seen they are controversial but what in trading isn't. Basically it comes down to if it works for you then use it.

dkm · May 2, 2005

IMHO, the subjective nature of trendlines and channels makes them very difficult to use as a basis for a consistent profitable trading strategy. That is not to say that they are without value, but I find monitoring the price volume relationship far more useful.

Grob109 · May 2, 2005

Quote from dkm:

IMHO, the subjective nature of trendlines and channels makes them very difficult to use as a basis for a consistent profitable trading strategy. That is not to say that they are without value, but I find monitoring the price volume relationship far more useful.
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Here is a comment that relates.

Hi Jack

My understanding is that the objective is to exit or reverse after peaking volume. However, we do not know if volume has peaked until we see the prv of the next volume bar. If that is lower then it could still be a hitch. So do we wait for the R2R/B2B switch in order to know we are at the end of a traverse? This is often way after the spike i.e. more than 3 pairs away from the extreme. So does it boil down to being able to recognise a spike, in order to know that we are not in a hitch? Frequently, when I see what I believe to be a spike, it turns out to be a hitch (and I'm out too early) and when I hold through what looks like a hitch, I miss the spike by a mile

I will parse the comment in a post by relating the P.V relation , the topic of this thread (trendlines) and how volume connects with treendlines.

easyrider · May 2, 2005

I dont know who posed that question to you but he has my thanks as I could not have asked it better. This is an area that I need help on too. Very much looking forward to your explanation.

Walther · May 2, 2005

Quote from murray t turtle:

=======
True Maestro ,which translated means teacher;
but its not about prediction its about probablities.
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Actually, it is about predicting when probabilities will be the highest .

Grob109 · May 2, 2005

Quote from Grob109:

Here is a comment that relates.

Hi Jack

My understanding is that the objective is to exit or reverse after peaking volume. However, we do not know if volume has peaked until we see the prv of the next volume bar.

The volume that is driving a trend is one that follows the notion that if the volume is increasing, then the trend will continue. Naturally we want to see how to monitor volume satisfactorily to catch the trend ending event as shown by the cessation of increasing volume.

The prv (pro rated volume) on a five minute trading fractal can be measured easily a number of times using simple arithematic. We do that s a routine in a context.

Getting the context straight is a major consideration. The best way to do that is to write in a log copiously for quite a few sessions. What you find out is several things: what is not important; what is key in the sequence of events that occur; and "knowing the market" in terms of the P, V relationship. So you have done that as indicated by what you commented below. So lets go there with these three items in mind and solve the problem.

If that is lower then it could still be a hitch.

This sentence says a lot. If volume is lower (first part of sentence) then just put the flag up. With the flag up we know there is going to be a change. P, V relation is speaking through monitoring. It is speaking on the 5 min fractal. So you have two fratals that are adjacent to the 5 min: one on either side.

One simple trendline rule (technique) is to go to slower and slower fractals until you find a rocket (consecutive bars fill the trendline channel). When you see the rocket on the given fractal, you know and understand that from the volume showing that the stage of the rocket is near the beginning, continuing, or near the end. All of this is a longer term consideration of the trade you are in in the 5 min. You know where you are in the rocket. If the rocket is old, then another flag goes up.

Go to the faster fractal than the 5 min: the two min. Here you get to see the traverses within the five minute channel. It is the guide you use for determining whether to just hold through the five min entire channel or to trade each traverse to make money. (the pace(steepness) of the five minute channel) determines this. The better the pace the less likely it is that you trade traverses (but make less money than when traverses are effectively traded in a slower pace) This aspect of the context is already in hand, meaning you have decided to trade or not trade traverses. Your comment below indicates you are holding for the entire five minute trend and holding in a hitch. (the harmonics in a trend cause various size perturbations: small medium and large.. A hitch is a medium one that occurs in a portion of the width (measured vertically) in a trend channel.)

Okay, the volume flag is up. The state of the trend progress is determined (if ending another flag up and if not, YOU RELAX a little). the pace of the channel is known and your strategy for the pace is in effect. Now lets go to the details of this gross (course) circumstance.

So do we wait for the R2R/B2B switch in order to know we are at the end of a traverse?

we always watch the long (B2R) gausians or the short (R2B) as they repeat on the next faster fractal of the 5 min trading fractal. In a long trend the repeat is B2R from the beginning of the trading channel traverse, going into the middle and as the left trend line is approached, the flag goes up. In the early part of trading trends and additional thing occurs. This is when the trend volatility increases (It makes you annotate and additional left line segment out into the futre. The long B2R will repeat during this extension. Here you will finally see, as always on the left line a B2B as you hang on the left line. Holding is dictated by only volume flag up at this time. If other above flags are up, you go into a detailed look see.

Here is that looksee without going into any other collateral indicators but the one you mention below. First, classify the pace (whether you trade reversals) and stick with that strategy. In this case you are going to ride through hitch and that is that. You will just see one or two gausians and only one reversal. you need to have an earlier signal than this if you are going to be trading all traverses or if you are only trading the R2L traverses in a trading trend. Here is what to observe on the gausians. As you approach the left line, the peaking volume on the prior gausains is not going to be reached. sideline on the bar just before the middle gausian bar or if you are seeing more than three pairs happen during the traverse, reverse then and pick off the L2R traverse back to the right trendline on the trading fractal. This is exactly like doing a wash. BUT it is a reverse toset you up for the bounce off the right line back into the channel. Here you do the same thing as solving the hitch equivalent problem with regard to the consideration of the L2R traverse turning from being a trend retrace into a reversal as a BO of the trendline occurs. Pace in trends is always a consideration. the spectrum form rockets to slow pace is a coarse consideration mentioned above. This discussion relates to paces that are average or less. faster paces usually have L2R traverses where no profit ground can be lost and it takes a while in the trend for even a hitch to show up along the left channel trendline.

This is often way after the spike i.e. more than 3 pairs away from the extreme. So does it boil down to being able to recognise a spike, in order to know that we are not in a hitch?

formations within trading channels are not as important as making the judgement to hold or reverse. I do see formations and I look mostly on the two minute gaussian chart. It is here where the price traverses usually have pauses, hitches or dips. Usually the volume is flagging more and more to go through the common sequence of no pauses, pauses, hitches, hitches turning into dips, and a tend overlap beginning.

Frequently, when I see what I believe to be a spike, it turns out to be a hitch (and I'm out too early) and when I hold through what looks like a hitch, I miss the spike by a mile

Now at the end, I suggest that you take a step towards sports memory. This is not a hair trigger screwup type suggestion. By staying deeply focused on the five minute and using the two minute as a vernier, go through very frequent sweeps. you will say "hold" often....... but when you don't, then do a washright then and there. It takes the formation issues off the table. Then after about 50 washes...... replace the wash with a reversal and go into the groove again. what will happen is that you will do more holding knowing more detail of those moments and then when you reverse, you will, again do more holding before the next reversal. what will be actually happening is that you will be acting earlier and not missing spikes and you will learn that there is money making on the other side of the spike. Finally you wil emerge into a place where you use much more consideration of market pace to be deciding on the reversal activity. That is whether the day deserves eaking out another set of H/L range profits.

You will see long rides about 15 mins into the open and 3 to 5 other H/L range profit taking trading series. Each of these series will be similar to each other although from day to day they group up in differing pace groups.

This is a god starter comment on your topic.

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I color coded these parses for my convenience. they go from the more general to the more specify. Like shells within each other.