Why do trendlines work? - Page 2
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Thread: Why do trendlines work?

  1. #11
    nokaA
    Guest
    Quote Originally Posted by ;
    If you never ask, you will never understand. For a beginner, observing what occurs can just tell you so much. The advice of knowledgable traders here atforexforum.co.zacan definitely speed up the learning curve.

    Besides, it's just poor form to generate fun of a post that was actually trying to understand a subject better. This is after of the rookie forum. If you have nothing constructive to say then why not STFU.

    Thanks as it pertains to those who did offer there opinions. Appreciated.
    In the event that you always ask dumb questions why should anybody bother to reply them ? Are you looking to be one of the winner searching newcomer?
    Work hard and get what you want... no other manner....
    My first article was a lesson to the future... you didnt get it...
    peace out newcomer boy

  2. #12
    Dont worry about it pambeesley, there are plenty of members who will aid (myself included) and they arnt still in diapers like vaflis.

  3. #13
    Occasionally trendlines work since a lot of traders draw and trade trendlines in charts

  4. #14
    Quote Originally Posted by ;
    Am interested in the reasoning behind why trendlines work? For instance, why is it that SOMETIMES, prices will nonetheless respect a trendline drawn and prolonged many days before?

    Due
    Trendlines seem to work because they are nothing but blend of price points and time points. Both have fixed quantifiable periods. Since one moves down or up and also other moves from left to right they produce a relatively stable connection.

    By way of example prices will generally move from 1.4500 to 1.4600 to 1.4700 to again 1.4600 to 1.4700 afterward 1.4800 afterward 1.4900. If all these motion occurs at a day and you draw a chart it's going to have subsequent readings / points.

    Day 1 - 1.4500
    Day 2 - 1.4600
    Day 3 - 1.4700
    Day 4 - 1.4600
    Day 5 - 1.4700
    Day 6 - 1.4800
    Day 7 - 1.4900

    Today without drawing a trenline you'll be able to predict that Day 8 will probably be 1.5000

    In clinic price does constantly move in round amounts but at sub-sets of round numbers producing a constant effect. What do I mean by sub-set of round number is:
    Price 1.4500 to 1.4600 might be broken up into certain cubes, lets say 10 of .0100 each. These blocks might not be from 1.4500 to 1.45100, 1.45200,.... Etc. but can be 1.4500 to 1.45020 1.45080, 1.45120, 1.45180, etc.. Again there might be additional sub-sets within such cubes.

    These all blocks might not be of equivalent number of pips (or of uniform size) but there'll always be some type of connection among them because of number of reasons such as human plogy, round amounts, pivots, averages, etc.. But, basically all of them signify smaller collections of larger price cubes.

    When you look at the larger time period charts and focus on 500 pip ranges, you might observe this connection. But again these relationships are not exact but approximate. Major price benchmarks (round numbers) plotted punctually X Axis will demone the tendency. That is 1 reason why it is believed that larger timeframes have less sound i.e. they follow fibs, trendlines, etc. more exactly than smaller timeframes. This is only because larger timeframes hide smaller deviations.

  5. #15
    Quote Originally Posted by ;
    If you always ask stupid questions why should anyone bother to answer them cleverly? Are you looking to become one of the mercy searching newcomer?
    Work hard and get what you need... no other way....
    My first post was a lesson to the future... you get it...
    calmness out rookie boy
    Hey guy dont you see its a roockie dialogue section? If you can't post something great than stop posting worthless bullshit.
    The main point of this section is newbies. They are allowed to ask anything.

  6. #16
    There is the self-fulfilling nature of the validity of trendlines, but it is reasonable to presume that there was a value in trendlines, perhaps only in concept, before they became so popular enough to have gained this characteristic. When Dow and his posse began plotting charts of stocks and indexes of past price action before the arrival of technical analysis, they discovered that their theories had value. Trendlines were honored, tendencies made sequential highs and lows along with the breaking of the levels had significance (support and resistance) regardless of the obvious actuality that market participants weren't necessarily aware of these variables. So, it goes beyond the'folks use them so they work' theory.

    A trendline represents value of an instrument over time. This is important because individuals discount value over time. If I was to offer you $100 now or $110 at a year, although $110 is higher in absolute terms, you might perceive the value of the $100 now to be higher because of uncertainty of the value of the dollar, or perhaps you think you could attract a greater rate of interest through alternative avenues. Precisely the same, market participants may dismiss value over the collective value/time schedule could represent itself as a trendline where demand or supply will come into the market as participants deem the price at the trendline to represent value, all else being equal.

    Trendlines may also ch the resonance at which a market is'vibrating'. In case you have any experience with the Andrews pitchfork, you may no doubt have noticed some instances if a median point is admired time and time again, bouncing accurately within the confines of the structure. I don't think anybody knows for certain why the relationship between the 3 factors from which the fork is drawn has such meanings upon the future route of price. In case it interests you, then you need to delve deeper to Andrews' work, which has been extrapolated further by Tim Morge.

    Ultimately, and this does have an element of the self-fulfilling character about it, trendlines are a visual representation of market sentiment. People don't necessarily need to have the trendline drawn for the trendline to be important. The trendline doesn't determine market sentiment, rather the market sentiment determines the trendline. Above a trendline is bullish, below is bearish (maybe not a egy recommendation). If a trendline is drawn accurately and predied upon important points so it clarifies supply/demand within the market, it is at the point that price interacts with all the trendline that buyers or sellers will probably glean the best reward for the least risk if the market sentiment continues. If the trendline breaks, then there's evidence that market sentiment could be changing, especially when price breaks down the trendline hard. As in Peter's chart above, price will often retest a trendline, or the price at which the trendline was dissected, because this is the point at which market sentiment has potentially flipped. Those who have been in transactions will believe this a fantastic place to ditch their positions, and people who wish to ride a new tendency will consider it to reflect value.

    All just concept of course, and most of us know that in practice the markets are frantic, volatile and can trample all over our specialized theories without a second thought. Trendlines are an significant part my trading, but I bear in mind that price comes first and the market does not need to do anything.

  7. #17
    Quote Originally Posted by ;
    My trendlines screamed market, and that I listened....
    STOP trading on the 1 minute time frame.

    You won't have that problem

  8. #18
    Quote Originally Posted by ;
    STOP trading on the 1 minute time period.

    You won't have this difficulty
    : (edit)



    --

    Alright, to be honest, why I was nervous was not because of my use of trendlines, it was since (besides bad use of mm) of the times a clear trade like this is not offered. You will never know until you have made a whole approach for virtually any circumstance, which I'm still working on.


    The trendlines, if you're curious, are projective; almost the entirety of every one of my trendlines has price evaluation them after they're made, not before. Other than that, you still need to choose which one works, although again, they're easier than most trendlines in this respect also.

  9. #19
    zonCodu
    Guest
    Ok,

    What you have just explained as Vibrations is quite near Gann concept
    You will find harmonic movements over time, price, distance (range) and quantity.

    Market esteem Gann Angles, channels, diagonal trendlines as this is natural cycle Time and Price terms.

    Why - that is the question I am trying to find answer for

    Individual to follow is Connie Brown - she did the most research on Gann

  10. #20
    Logically, the trendline joins price interest points on the market, be it a horizontal line or a sloping trendline.
    The more it's admired, the more interest there will be in the future for that line.

    Critically a trendline break will often indie the conclusion of a fashion or the start of a new one.
    IMHO, It is a great market sentiment tool if used correctly.

    Only way to find out is by asking the right questions.

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