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-   -   How can I draw trend lines correctly? (http://www.forexfactory.com/showthread.php?t=400874)

forexmnstr Dec 17, 2012 6:34am | Post# 1

How can I draw trend lines correctly?
 
how can I draw trend lines like a pro ... can any one give me steps ... or any kinda site that teach how to drw these lines and how to figure S/R

... i think only mathmaticians can draw patterns without an indicator use

forexmnstr Dec 20, 2012 2:42am | Post# 2

...<>...

gbengoyor Dec 20, 2012 4:36am | Post# 3

how can I draw trend lines like a pro ... can any one give me steps ... or any kinda site that teach how to drw these lines and how to figure S/R

... i think only mathmaticians can draw patterns without an indicator use
use Demark trendline indicator...u can google it

wendigo Dec 20, 2012 4:37am | Post# 4

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ask the dude who done this chart he seems to have a good handle on drawing lines

WENDIGO
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deltatrade Dec 20, 2012 5:10am | Post# 5

there is a trader who is a member and who seems to master trendlines. his user is wmd http://www.forexfactory.com/wmd.

Robertk Dec 20, 2012 9:30am | Post# 6

Honestly, just experiment some with your own drawn TLŽs and see how price reacts to it. Eventually youŽll get better at it.

Trader_V Dec 20, 2012 9:55am | Post# 7

Trendlines are like art. The beuaty lies in the eye of the beholder. They are subjective in nature but when you draw them according to your own rules you can make them more objective. Once you make them more objective you will have greater success with them. Like a couple of the other members here have mentioned Tom Demark is a good resource.

60minuteman Dec 20, 2012 10:15am | Post# 8

dont bother, plot a 50sma, use it as dynamic trendline

Trader_V Dec 20, 2012 10:24am | Post# 9

dont bother, plot a 50sma, use it as dynamic trendline
You can do that as well but I would add a rule to it in order to better define the rule such as the trendline (SMA 50) is not valid until exceeding an angle of 30deg or whatever rule you want to wrap around it in order to better define things.

forexmnstr Dec 20, 2012 6:43pm | Post# 10



How can any one draw trends and patterns like that ... what are the basics ... from were can i begin ... and were i will end ... please guys just give me some hints that i can actually begin with ... ... steps please ... indicators arent good ... i want to draw myself ... i have tried many times and none made sense ... not even one time i was right about my drawings

pipcorn Dec 20, 2012 7:13pm | Post# 11

I have nothing to do with the website:
http://www.forexhit.com/learn-forex/forex-trends.html

but it has an interesting approach about trends, take a look.

pipcorn Dec 20, 2012 7:15pm | Post# 12

dont bother, plot a 50sma, use it as dynamic trendline

This is also a good way.

Aich Dec 20, 2012 9:24pm | Post# 13

Before worrying about how to draw trend lines, you need to ask yourself what you expect trend lines to achieve for you.
Better to start with the view that top traders are conservative in their trading style - that is how they manage to stay in this business.
Ask yourself what the big/successful traders use to enter trades.
In short you will find that the answer is support and resistance, demand and supply - horizontal lines rather than oblique lines. The smaller traders use trend lines to try to follow the big traders. Think like a BIG trader even when you are a small trader.
Build a trading style around S/R and continually question your system until you are comfortable that it is really working.
With a good system, you will be able to take every trade that is signalled and end up with a positive account over time. A simple uncluttered system works best, but you need to try things till you get there. Keep questioning every line you draw and every indicator you add and ask yourself "am I using this? Does it help me to see what price is doing and find an entry?" If the answer is "no" then delete it.
If your system does not allow you to do this, you are not there yet. Keep working, minimise your losses while you are developing your trading style.
The secret is staying around till you can "see" where price is likely to go. Avoid people who say they "know" where price is going. You never know where price is going. You think in terms of probability.
Every time you take a loss, use it as an opportunity to learn. "Oh boy, I made a loss. Now what did I miss here?". Find out and use this knowledge to move forward.
etc...etc...
If you want to use trend lines, try Tom DeMark trend lines, they join swing lows to show an uptrend and swing highs to show a downtrend.
But then ask yourself, "how can I use this information?"

PS. wmd has some interesting stuff to say. Read this and try to see why he says things. How can you apply it?
Ignore all of the responses. Use your own intelligence.

ForExtraPips Dec 20, 2012 9:54pm | Post# 14

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how can I draw trend lines like a pro ... can any one give me steps ... or any kinda site that teach how to drw these lines and how to figure S/R

... i think only mathmaticians can draw patterns without an indicator use
Here's one way that you could do it. Connect the two lowest wicks going in an uptrend. And connect the two highest wicks going in a downtrend. Then you can even go further and connect the second highest wick with the next second highest wick, etc....... Then where the two trend lines meet, put a horizontal line through it. And there you have your S/R lines. Glance to the left and see how price is acting on those lines. Then look at what price just did on the E/U, where the one trend line met up with the other trend line. Then your trend line or horizontal line below that could be a possible tp target. Hope it helps. But like others have said, there's different ways to do it. Whatever works for you is what matters. GL
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the redlion Dec 20, 2012 10:07pm | Post# 15

instead of drawing trend lines which are like art..........why not take the log returns of every hour for the past 24hrs, and do a linear regression

use linear extrapolation to get an idea of the return in the next 24hr ceteris paribus.

but also the beauty of this is you can use it as the drift for price simulations

advantages

1- it is not like art, it is objective mathematically (given the linear assumption)
2- can be input in this equation price*e^(drift{linear regression model} + standard deviation of the asset * random normal number generator)

3- you can get your Value at Risk by finding the .05% if you are bullish or .95% if you are bearish

4- it is objective.


gives you a better idea as you of what price can actually be as you are using more of a probability flexible approach as opposed to drawing lines on your chart and gives you better parameters which are empirically observed in my opinion

of course people say why make it so complicated? I just want to draw a damn line and open the door to riches

gonefishin Dec 20, 2012 10:46pm | Post# 16

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  1. to be considered a low, the candle needs to be the lowest candle with two to the right that are higher, and two to the left that are higher
  2. to be considered a high, the candle needs to the highest candle with two candles to the right that are lower, and two to the left that are lower
  3. in an uptrend, to draw an uptrend you will need the low and a high, then a retracement (low) with a new higher high.
  4. in an uptrend, each high will have a preceding low.
  5. Connect only the low candles when a new higher high is made.
  6. If you have a new low, and there has been no higher high...it is a break of the trendline, you do not move the trendline unless there is a new higher high.
  7. Follow your rules. Do not cut thru any low candles, if a new high has been made. If a new high has been made then you adjust to that highs low, without cutting thru any previous candles. If you do cut through some candles, then adjust your trendline accordingly.
  8. If the price action falls below the trendline, without having made a new higher high...let it break the trendline. You do not accomadate (moving the trendline) unless there is a new higher high.

In an UPTREND
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gonefishin Dec 20, 2012 11:08pm | Post# 17

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CindyXXXX Dec 21, 2012 12:46am | Post# 18

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how can I draw trend lines like a pro ... can any one give me steps ... or any kinda site that teach how to drw these lines and how to figure S/R

... i think only mathmaticians can draw patterns without an indicator use
To keep it simple;

Draw the line that connects the most points, without impeding the candle bodies.

The theory; As someone mentioned earlier, everyone will draw the line differently but this line will include the MOST amount of those people.

this line will in turn have the most weight/ orders and become not only a strong support/resistance from limit orders but a liquid target that price "should" seek.
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Aich Dec 21, 2012 12:54am | Post# 19

  1. to be considered a low, the candle needs to be the lowest candle with two to the right that are higher, and two to the left that are higher
  2. to be considered a high, the candle needs to the highest candle with two candles to the right that are lower, and two to the left that are lower

This actually describes a fractal. It is considered a quite powerful indicator of a reversal in some markets.
I suggest going back several weeks and drawing some trend lines on closed candles and see if price actually responded to them before committing to any new practice.

The test to everything is "does it work for me?".

FXEnjoyment Dec 21, 2012 2:36pm | Post# 20



How can any one draw trends and patterns like that ... what are the basics ... from were can i begin ... and were i will end ... please guys just give me some hints that i can actually begin with ... ... steps please ... indicators arent good ... i want to draw myself ... i have tried many times and none made sense ... not even one time i was right about my drawings

Hi, With this DiNapoli AB=CD pattern you are at the beginning of your journey. Start to connect the swing lows from right to left with eachother, in order to draw the up trend. Connect the swing highs from right to left with eachother in a downtrend. For further information I would suggest you study the link here: http://www.forexpeacearmy.com/forex-...on-pro-banker/ Have a lot of fun!


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