Hey Pabst: I am in agreement with you on the issue of trendlines vs. MA's. I had ocassion to have a long conversation with Ben Warwick on the subject. His opinion was that MA's were the only indicators that added value to his work. He figured that this was because so many other technicians were looking at the same ones. I think he was right. Right now I am using three EMA's (5, 21 and 200 period) on charts with 5 min and 15 min candles. This setup has worked well for years now, and I intend to stay with it until it fails. The longer I stick around, the more I see that the difference between professional and retail is not the tools. If you look at what folks are really using trendlines for, it is simply to show where the levels are (where buying and selling volume gets activated). Anyway, I have to start my homework for tomorrow. Good luck Pabst. Lefty
Your comment captures my position, but your postulate re vectors goes one step too far. If trendlines can be extrapolated beyond their endpoints, then the same math that you would use to predict market direction could be used to predict other natural events. But, prediction of future (random) events violates causality and is therefore not possible. There is no statistical means of predicting market direction based on no information other than price. It is impossible. This doesn't mean that someone cannot use a trendline as a trading indicator to have some success, but it does mean that in the very LONG RUN, success and failure will even out, and what will be left is a random walk with an upward drift. Which is why I asked whether the poster had considered that there were some other coincidental "balls" in play, other than the trendline itself. People may be able to use trendlines to assist them in making profitable trades, but there must be some "other" actor that is the actual cause of their success, because, as I stated, the mathematics absolutely prohibit the trendline itself from being the rationale. It may be that many other traders are using substantially the same trendline in the same market, and that this is creating a self-fullfilling prophecy, thus causing the market to continue to "trend" in a particular direction. After all, if everyone is buying then the trend is definitely up, so what remains is to figure out how to sell before the other people following the "trend" start selling. Evidently, some of the traders here have figured out how to accomplish this little trick, and that is their "edge" against those traders who have not learned. Obviously, there are other means of getting an edge in the market. We either have some winning methods, or we are losers, one or the other. PS. Someone will almost inevitably bring up short-term weather prediction to try to refute my position re market prediction. Unfortunately, short term weather forecasting does not use trendline analysis as a predictive mechansim, so the analogy is false.
I believe trendlines/flag patterns can be useful in equities. Just like anything else, a tool in your arsenal. Daytrading the ES, I believe trendlines are of less help than say, S/R. Trenlines on a smaller timeframe are of less value, imo. Especially, since the ES is not trending now
trendlines are basically taught in the first or second chapter of any introductory t/a book. ask yourselves. have you ever met anyone who became ridiculously rich after only reading chapter 1 or chapter 2 of any introductory t/a book?
The fact that something is taught doesnt imply that the readers really learn much. I could cheerfully trade with nothing other than trendlines (db would say I didnt need them but I like them) although I also use a couple of mas (which to me are forgiving trendlines). It doesnt matter if the only reason they work is because lots of people use them ... thats not so much a self fulfilling prophecy (unless you are all of the users) as an opportunty to observe an edge for your trading. (Yes, kj, trading is all I do, and I agree with Lefty too)
Personally I think they're great! I love it when a woman has obviously changed from wearing a regular bikini to a mini-bikini, and you can see that white patch of skin outlining her old bikini bottom just above her crotch. That is sexy as hell, especially - Oh wait, you said trendlines. I thought you said tanlines. Never mind. H
^^^^^^^^^^^^^ Like to occasionaly use moving averages- a form of trend lines, however; you have to do a lot of work, its not the trendlines that work, you do the work And as far a straight trend lines mess that many ''TA'' trders draw- thats just a mess; botom line trend lines do NOT work -you do the work.
as opposed to the loads that got rich by reading the entire book? Like I said, they are a tool. Some successful traders use them, some don't. Which implies that when used correctly, they are helpful. Its funny when people here talk about some trading tools and act like just because they don't use them in they're strategy, they are useless for anything. Thats like asking, 'hey man, can you use a fork to eat?" and somebody answering, "No, they're pieces of shit....I tried all day to eat my tomatoe soup with one and it was a waste."