T/A won't make sense to me until I understand this:

Discussion in 'Technical Analysis' started by jonbig04, Jun 28, 2008.

  1. I'm reading about finding patterns:

    head and shoulders, double tops and bottoms, ascending and descending triangles, etc etc

    Can these patterns be applied to ALL time frames? If so cant one security be trending, reversing, and have all sorts of different patterns at the same time? Am I just a nutjob? I'm reading this book and it shows a chart and says "now draw trend lines, they're are at least 8. I drew like 33 of them! Some were long, some where short, some were in the middle. I am understanding the basics of these patterns, but doesn't everything depend on what time frame your looking at or trading in?
  2. welcome to the world of rorschach inkblot tests. Unfortunately, most books forget to expand on the subjectivity part.

    It's good that you are catching that early on.

  3. Haha I get you...kind of like the "girl with large breasts...girl with medium breast" scene in the movie Armageddon. Just talking out of my ass here but its kind of interesting because in thinking about it if human beings lived for 1000 years we would still be in a raging bull market judging by over-all stock performance going back 100's of years or whatever. I know thats kind of ridiculous but it just changes the way i will look at comments like "the dow is going up"...because no one is ever right, and no one is ever wrong...the key is to be able to predict trends small enough to make you money in a reasonable amount of time in proportion to how long your going to live...or how fast you want to make money....which usually is the fastest way possible. It makes some sense then to try to predict and profit off of very short term trends. I guess, im only 3 or 4 days into t/a though.
  4. CWU


    Hey Jonbig04,

    Name a stock.

    I’ll post an EOD chart and identify the patterns I recognize, draw in applicable trendlines and give you my read on its future movement as dictated by its sector and the overall market. Once more, most folk’s who employ my particular charting method would see exactly the same pattern/s/ and draw trendlines exactly the same way. (There are always a few oddities here and there, but essentially the patterns and trendlines are dead-on same.)



  5. I understand, and I don't doubt you. However I think if i posted a chart for ITNC that was in 3 month increments going back 5 years, wouldn't you draw different trendlines and different patterns than you would if the stock was in hourly increment going back 1 day?
  6. You can have trendlines etc. on different timeframes for the same chart.

    Maybe a daily chart is trending upward, but the 5 min chart is trending downward (maybe it's a little pull back in the overall upward trend of the stock).

    And it's all subjective. There's no "one right way" to draw trendlines. I don't use trendlines very much, partly because it's so subjective and, like you, I end up with like 33 of them.

    I connect highs and lows. That yields a lot of lines. That's probably why I don't use trendlines :D

  7. haha highs connected to lows= lots of trend lines. Thanks all for the input, just wanted to make sure i wasnt missing anything.
  8. A stock or market can be in a short term downtrend, within the context of a medium term uptrend, within the context of a long term downtrend, etc, etc. You have to decide what your objective is and find the appropriate time frame and trend filter (if you are trend following) to meet that objective. There are no perfect solutions. For example I trade inter day and typically hold for a few hours. I use 5 min bars. If the 10 period EMA is above the 30 period EMA I call that an uptrend and vice versa. But obviously if I was holding for months at a time the 5 min chart would be irrelevant.

  9. Thanks for providing specifics, it helps a lot.
  10. whoops, sorry, i meant all the highs (to each other) and all the lows (to each other). not the highs to the lows :p
    #10     Jun 28, 2008