Why I don't watch trendlines...

Discussion in 'Technical Analysis' started by RangeTrader, Jun 10, 2012.

  1. And you shouldn't either...

    When you draw a trendline between two cycle lows as a trend begins... Your just following others, and chasing is bad practice in trading...

    When the market makes it's first higher high in a new trend cycle... Generally those traders setting the following bottom in the consolidation cycle are either using retracement measurements or fib fans. There is still a pretty large amount of traders using fib fans as far as I know... But the pro's are all using retracements and projections for the most part as those are the most effective ways to get the best prices.

    Fib fans are nice because they also tell you the strength of the trend by how far it retraces through the fan each cycle... Be careful when price starts to fall out of the fan! It's the same as a trendline break.

    The proper way to draw fans is from the rightmost points of the swing highs/swing lows.

    Personally, I just use projection/retracements... Someone on here said "All you need for trading is a ruler and a pen..." He knows his stuff. :)

    Anyway, that is all... See you all next weekend!

    My most used drawing tool nowadays is a chart calculator, followed by price projections Note: A chart calculator is just a measuring tool. A point to point ruler... Hehe

    Retracements I don't pay too much attention to anymore. There are a few key ones to watch for here and there. 1341 on the ES is a major resistance level as it's a 50% retrace back to the highs, but besides the major ones... Not enough traders and alogos are watching them for them to influence price much.
  2. ========
    Good points Range/T
    maybe thats why its called ''trend following'' and not trend predictions.LOL

    I like my trend lines drawn by computer;
    even though i can figure a 50 day moving average by hand.:cool:

    I am glad you dont watch trendlines;
    it takes all kinds to make a market. Have a good year:cool: