I would need more touches before calling a trendline significant. the lines you drew wer connecting two points mainly and any line can be drawn using two points. I like to see at least 3 clear touches or point before drawing a line and testing its validity.
thanks Coach and Rally. That makes sense. Another question, should the trend line touch the body or the top of the shadow? Or does it matter?
No, Mav's still using the old schmamma technique. I use decamma. Performs much better than schmamma under 26 sigmas. MoMoney.
I know it must sounds like a newbie's crap , but I actually was able to establish very similar position ( theta and gamma +) via Time Fly. PS - not trying to start a fight here , lol
Under the right circumstances e.g. http://www.elitetrader.com/vb/showthread.php?s=&postid=1028813#post1028813 It's called thetamma.
Sure, it's possible under a sharp term structure of vol. Not as though you're going to be carrying any magnitude. It's easily achievable with an intermarket short vol-swap replication in which corr is primary risk. It requires a funky term structure or correlation risk when trading intermarket strips.
What is said : " ... sharp term structure of vol.... carrying any magnitude...... short vol-swap replication....a funky term structure .... trading intermarket strips." What I hear : "The noise the teacher would make on Charlie Brown when she spoke....."
Event vol ... long both, but small order and variance ... a volatility box [long x // short x+n] ... short the pre // long the post earning's vols ... trading Nov vols in NDX against RUT.
RR, Just remember that most of the minute details don't really matter when drawing trendlines. There is only one reason that a trend line will work in forecasting s/r. If a big group of other traders see it too and believe that there will also be s/r at that point. If you are the only one who sees that line then it is guaranteed to fail. Cache