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# Mathematically computing a trendline

Discussion in 'Technical Analysis' started by SeventhCereal, Jul 23, 2011.

1. ### SeventhCereal

I would like to basically compute a trendline of the form (y - y0) = m (x-x0). I want to use this to determine box ranges and triangles.

I tried thinking about it for a little bit, and there are many little details to get this working and I am thinking, this has to be a solved problem.

Sure enough FinViz does have some algorithm for doing it. How do they do it? Is there a link to a paper or book? Thanks.

2. ### gtor514

I'd start by looking at the Linear Regression Line over some time period and see if that is what your looking for.. This many times can approximate a discretionary trendline vey well.

Can't say for sure unless I had some picture of what your trying to accomplish.

3. ### jimbojim

College math 101.

4. ### ProfLogic

You can't do it accurately or consistently on time or tick based charts because the volume weight of each bar varies too dramatically.

5. ### uexkuell

Finding local minima and maxima (which is needed to correctly draw trendlines) is *not* trivial.

6. ### Kubinec

At least some people know about it, I don't even know what the hell a math-computed trendline is. How is it different from a regular trendline one puts on a chart?

7. ### ProfLogic

Manual trendlines are discretionary, computed ones are not.

Step #1 -
Objectively define "Trend" as it applies to your specific charting environment. (IMHO - Constant Volume Bar charting works the best.)

Step #2 -
Objectively define not only support & resistance but the apex of the arc that makes up each support & resistance oscillation as it applies to your specific charting environment.

Step #3 -
Create a program to draw a trendline & to extend that trend line along your continuing resistance apex points in real time as resistance is making HH's and to draw a trendline & to extend that trend line along your continuing support apex points in real time as support is making HL's in a Bull Trend. The inverse is necessary to have the program draw a trendline & to extend that trend line along your continuing resistance apex points in real time as resistance is making LH's and to draw a trendline & to extend that trend line along your continuing support apex points in real time as support is making LL's in a Bear Trend.

8. ### Kubinec

Thanks Prof.

From what I understood of your post, it's basically a programmed function that automatically draws trendlines on a chart. I've seen indicators out there that do that.

9. ### ProfLogic

The key is to do it objectively in real time.
Not so easy.

10. ### pattern39

computing a trendline is easy. The hard part is getting the start of the trend right, something that requires sophisticated A.I. to do well...

#10     Jul 25, 2011
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