Only two trendlines have not been broken

Well, it's been broken now either way

 

You may want to research the fact, IMHO, that when prices have diverged far from a trend line, as with the one you drew from the Nov.& Dec. lows, that the line is of no real practical value in defining the trend.

 

1a2

May I suggest you try this;


Uptrend started on Mar 10, 09 – begin a trend line there

Run this trend line through the lows of Sep 26, 11… & Nov 19, 12 – then extend out past current PA

Next make an exact copy of this line – and move it to the highs (encompassing the same time)

Now you have a channel


Next make another exact copy, then move it so it is halfway (50%) between the above upper and lower trend lines

Now you have a channel – with a 50% line

See what that looks like

======

This won’t be the final answer, but at least it’s a start to get you seeing the terrain – accurately

eta, I used a 4 day candle chart off freestockcharts, so my dates may not be exact, but they are close enough


RN

 

Those three lows do not form a straight line on my chart. Can you please post a chart of what you're talking about?

 

Here's a pic showing what I'm talking about.

 

Here ya go

Now further drilling down is necessary for intraday, but the same method to go about drawing lines is applied - for now



And obviously all hindsight - what matters is to get the context ready for Monday's trading


RN

 

Well dude no wonder they didn't line up on my chart because I was talking ES and you were talking Dow!

 

As Took2Summit stated, "...you can draw the trend line however you want, but you have to be consistent."

You can use any framework for trading as long as it --- and your trading rules surrounding it --- are consistent.

All the ideas you list above for defining a trend do indeed define a trend. None of them, however, can predict whether the current trend --- definable at that moment in time --- will continue.

When you say you have been unable to find a trend definition that consistently works for you, what is your definition of "consistently works"?

All the ideas you list above for defining a trend work for me with excellent consistency, meaning I have rules for trading off these trend definitions that have produced net profit over series' of trades for years now.

Consistency is not certainty. All your threads seem to indicate a quest for certainty. Consistently profitable trading is based on positive expectancy, not certainty.

Your trading plan based on research and testing over a large sample size (such as applying a set of trade entry and trade management rules to 500 appearances of a particular setup and finding enough positive expectancy to produce a net profit after slippage and commissions) will provide the consistency you seek without any need for certainty in predicting the outcome of any individual trade.

Think of a well-researched and tested trading plan as a car that will take you through the streets of the Market City each day as you look for potentially profitable opportunities. If you took the car to a good mechanic and got the seal of approval (research, development & testing phase) before buying it, the chances of a breakdown are reduced. If you drive mindfully and safely, and wear a seat belt (stay focused and patient, follow your setup/entry rules, and honor your risk management plan), your chance of getting killed in an accident is quite low, and your chance of being available to take advantage of every opportunity is high.

I know several traders who have absolutely everything they need to extract ample profit from the market every week. They have well-researched and tested trade ideas with specific rules for entry and exit, yet they're unable to realize their dream because of common bad habits related to fear of uncertainty and/or a never-ending quest for certainty (usually in the forms of further testing, changing rules, adding/removing indicators, testing other markets, and so on).

There is a level of certainty in trading and if I were to express it in terms of tossing a coin for a living, it would look much like one of these scenarios:

1. You toss a fair coin. For every head you receive $130; for every tail you pay $100.

2. You toss a coin that is balanced to come up heads 60% of the time. For every head you receive $130; for every tail you pay $130.

3. You toss a coin that's balanced to come up heads 30% of the time. For every head you receive $500; for every tail you pay $180.

4. You toss a coin that is balanced to come up heads 90% of the time. For every head you receive $50; for every tail you pay $250.

If you could choose any of these coins and toss it for a living based on the risk:reward plan, would you do so?

 

Perhaps he went for the index that made more sense, and you did not.