This is what I hate about Trend Lines

I used the same two points to draw the trend line.

On the 5 minute, we break the trend line.

on the 1000 - tick nice trend line bounce.

Its a function of time compression into a bar giving a different slope.


<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=2066790>

 

maybe you need some more trend lines.

 

Just out of curiousity what charting software are you using?

Regards:
simon

 

but with your trend lines, the continuation of the uptrend confirmation happens 2 bars later (10 minutes) then the tick chart.

 

I require at least three points before drawing a trend line. After all a line can be drawn between any two points. 3 or more raises its significance IMHO.

 

Also, you would have to factor in the different range averages of the various time frames .

 

Assuming that sloping (non-horizontal) TLs on a time chart do sometimes have genuine predictive value, I really doubt that TLs drawn on any other kind of chart (volume, range, tick etc.) can possibly be "real" since the slope is different...

 

Try GMMA - Guppy Multiple Moving Averages to give little more perspective whether the trend line break is for real. I have seen it applied mainly on daily charts, and users from FOREX forums show it for intra day too.

Google for "GMMA chart" or "GMMA chart Trendline break".

 

Simply stated, When you use tick, time or volume based charts the vertical price levels are constant. However the horizontal component varies, so you wind up with different trendlines.

Which are valid? All of them. Which one will work? If any work the one with the highest probability is the one that the most people are trusting. Nothing more, nothing less.