Do you draw your trendlines based on the candle BODY or based on the SHADOW? And why? It can make a huge difference and completely change your trendline, and since some people make trading rules based off of trendlines, it could cause you to generate a buy or sell signal at the wrong time.
I don't use TL's any more and of course you will get different opinions. With angled TL's I almost always used the absolute high or low as the touch point. But with horizontal S/R levels I draw my lines across the opens or closes. I find it works much better.
Whatever seems to fit the best because that's apparently what most people are looking at for that stock. But yes I also agree. It seems horizontal trendlines work best with closes and uptrend/downtrend lines with both shadow touches and closes. Try touches first. It's half an art.
i use the closes because i usually look at the daily frames since it helps with spikes resulting from price manipulations, news and other urgent factor that might affect a stock intraday. However, you can do the same thing intraday for the same reason but i usually use lows and highs intraday. whether i'm trading on the intraday timeframe or daily, if i find a vast difference between the outcome from using either one i draw both lines and see which one holds and you should be able to tell assuminf you have other aspects or engines to your system or methodology.
heres todays ym, the lines are drawn off the lows of the shadow but it depends, you have to see where the price is to the left, is there support or resistance there or a ma something to confirm your trendline is best, sometimes I change the chart to a line chart , draw the line and change it back to candles, it usually draws the body of the candle, you have to remember trendlines are slanted support and resistance, they are areas , not exact price points, just a place to expect to see a trun around, use them with other indicators and use multiple time frames
Official answer = The body. The breaking of a trendline is confirmed on a close < or > than the TL not on a mere penetration. But......whatever the mkt respects the most is probably a smarter approach.
look at the first chart above, if you had used the body you would have been down 100 points without a stop or you would have been stopped out
You trade your way. I`ll trade mine. 100 points by itself means nothing to me. If it were my trade I would only care whether my position was valid or not.
sorry I quess I should have said you can say either is the best thing to use, I think you have to see which line lines up with support or resistance and if there is price to the left, a place where there will be short covering or selling at resistance and does volume and other indicators also line up, are there a lot of guys to the left that will act around that trendline or is it just a quick bounce and a continue down or up and will computers buy or sell there