Is anyone using Edwards and Magee's trendlines in action rules?

the bottom trend line in your blue channel is not valid, you cannot just draw arbitrary lines from one low to the last bar - its not even a low yet

 

yes, if only to use weekly chart.

Only I would run blue line from the first high and the first low

 

yeah what he said. IMO it is better to trade futures as opposed to EFTs, Im just curious as to your opinion on why ETFs are better?

 

I do not think ETF is better, I just get use to it, as I said - my bad habit .

 

OK, i getcha now

 

The topic is about how to trade any issue according Magee's rules for trendlines. If you have a comment about the topic, then please post it. If not, please just lurk. Thanks.

 

The blue lines are parallels drawn off the last two obvious peaks on the chart. It is my understanding that a new set of parallels is drawn each time a new peak or vally reveals itself. The red set has one purpose and the blue set has another. If you read the book, you will understand what is going on here, if you have not read the book you will be lost.

 

I understand, but there has not been a new 'valley' yet. therefore you cannot draw that bottom blue line until it is determined a that a low or valley is in place. Does that make sense?

 

At first I thought it was a buy signal, but the price action has not penetrated the red sets of parallels for the last two attemps, so I am not so sure. Anyway it does appear to be affecting the price action. Also volume here appears to be enough to mark a trend change.

Consider this chart.

 

I think your top blue line should be redrawn, and start from Feb 2004 and end at Feb 2006, and the parallel to it bottom blue line should start at Aug 2004