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Re: TrendLines... Do they make sense?
[Re: nanotir]
#456435
11/22/15 19:08
11/22/15 19:08
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Joined: Dec 2013
Posts: 568 Fuerth, DE
Sphin
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User
Joined: Dec 2013
Posts: 568
Fuerth, DE
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In http://www.financial-hacker.com/seventeen-popular-trade-strategies-that-i-dont-really-understand/ jcl stated clearly that it is neither proven nor disproved that traditional TA works. Many TA instruments are dealing with trend recognition, trend following and recognition of trend reversals. Often I read that the quantity of instruments is an indication that TA won't work, because otherwise one or two with predictive power would be enough. I'm not sure but it seems to me that there is often a discrepancy between the usage of TA's indicators and the way they should be used. Consulting the TA 'bible' (J.J. Murphy, Technical Analysis of the Financial Markets) I read there more about a concept where indicators' results are used as puzzle pieces that if cleverly choosen, interpreted and arranged can constitute an image of the present markets' situations and with more or less probalility can also make forecasts of further developments. Murphy describes the importance of indicators that deal with one intrument or market as well as the importance of indicators dealing with intermarket observations or secondary paramters like e.g. the volume and the use of those instruments in different time frames to determine the actual trend situations in markets which are additionally interdependent. I do not read there that any indicator or any fixed combination of indicators based on one intrument alone can reliable predict its future price curve. Therefore the fails of such tries should not be very amazing. To cut it short - in the field of using technical analysis and therewith analysing trends there is IMO still very much room for improvement!
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Re: TrendLines... Do they make sense?
[Re: Sphin]
#456442
11/23/15 01:05
11/23/15 01:05
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Joined: Mar 2015
Posts: 336 Rogaland
nanotir
OP
Senior Member
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OP
Senior Member
Joined: Mar 2015
Posts: 336
Rogaland
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I just want to play around. See if it works to buy when the price hits the down channel and sell when it hits the up channel. Not sure what I will get.
"up-trend connects the minima" It's just use something like LL(10) and LL(20) and I use both to create a y=ax+b?
Last edited by Nanitek; 11/23/15 01:12.
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Re: TrendLines... Do they make sense?
[Re: nanotir]
#456451
11/23/15 15:50
11/23/15 15:50
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Joined: Dec 2013
Posts: 82 Sydney, NSW
Thirstywolf
Junior Member
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Junior Member
Joined: Dec 2013
Posts: 82
Sydney, NSW
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Hi Nanitek
Trendlines definitely DO work, but as Sphin suggests in his reference to "Technical Analysis of the Financial Markets" it is not as simple as them just working. You will see a lot of false breaks to trend lines or channels, and the gradient can change as well in really long trends. I would suggest using trendlines as one part of a strategy, not as a strategy itself. Also, so long as you are looking at trendlines, look at support and resistance as well. This tends to be cleaner and more meaningful.
Also, in regards to both of these you will find that every market behaves differently. The E-MINI loves to find support and resistance, break them, clean out all the stops, and then just fade the whole move, whereas a break of a significant level in the DAX tends to be more meaningful.
Thirstywold
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Re: TrendLines... Do they make sense?
[Re: nanotir]
#456465
11/23/15 22:54
11/23/15 22:54
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Joined: Dec 2013
Posts: 568 Fuerth, DE
Sphin
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Posts: 568
Fuerth, DE
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For painting you don't need the equation, if you have the bar and the price from e.g. the minima, plot it with:
plotGraph("Line",LocalMin1_Bar,LocalMin1_Price,LINE,BLUE);
plotGraph("Line",LocalMin2_Bar,LocalMin2_Price,LINE|END,BLUE);
But how do you determine useful minima/maxima for trend lines?
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