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Help please, just getting started

  • Post #1
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  • First Post: Apr 29, 2006 6:18am Apr 29, 2006 6:18am
Well I have to say what a very useful Forum this is, I have trawled through most of the newbie stuff here and i am sure I will find the answer somewhere but just to help get me started could someone answer these 2 questions for me
1. when drawing trendlines on a candle chart does one connect the wicks or the bodies ?
2. I see reference to different timeframe charts ie hour, day ,15min etc, could someone advise in the best period of time time to look at ie, if i want a "day" chart would this best over a week, a month, a year ?
I have no feel for what is the best way of viewing these charts, is there a "rule of thumb" I could use ?
I thank you all in advance and promise not to ask too many dumb qusetions.
Hi dragon,

I'm not that skillful with trendlines yet but just to give you my input, see the replies below.
Quoting dragon77
1. when drawing trendlines on a candle chart does one connect the wicks or the bodies ?
I think most people connect the wicks. They start from the low/high of a candle and just draw it at another low/high as another end point. Maybe this link would help:
http://www.stockcharts.com/education...rendlines.html

I think that through practice, you'll be able to have a good handle of them.. I know I for one lack practice..
Quoting dragon77
2. I see reference to different timeframe charts ie hour, day ,15min etc, could someone advise in the best period of time time to look at ie, if i want a "day" chart would this best over a week, a month, a year ?
I have no feel for what is the best way of viewing these charts, is there a "rule of thumb" I could use ?
Sorry but I can't seem to understand this question.. Maybe you could clarify more? Or maybe others could understand better than me..
Quoting dragon77
I thank you all in advance and promise not to ask too many dumb qusetions.
No dumb questions.. only dumb answers..

Hope this somehow helps,
East
here could be a dumb answer. let me give it a try. When I was getting taught how to draw trend lines, they are pretty much the same as support and resistance only in an uptrend or downtrend. What I was taught about drawing them is some people like to be very careful where they put the lines but, think of it more as a range where price is gonna stop and turn around. if you want to be very precise with where to put them, that is fine but, more times than not the price will go past the "perfect line or will not quite make it. The best trend lines are where the price is most of the time. not just the extremes. the extremes are where the price will jump or drop to quickly and retrace. Ok, this is probably getting a little confusing, I think I am starting to confuse myself.
JOHN 3:16
Thanks Eastmaels, sorry if I confused.

On the chart question, I wanted to know what the best expansion is on any given time chart ie, when a "daily" chart is quoted and 1 candle represents 1 day, what is the best span to view these over ? how far back in time would the chart be best viewed at and whether there was a general rule of thumb.

Hope this helps .
Hi 77!!


how many 7s are here on forum huh?

Well who was first I wonder
kiss the trend
Hi dragon

I'm new as well but I'll put in my 2 cents. from what I've been reading the best chart to use is kind of up to who's viewing the chart or charts. One thing for sure, no one seems to use those second charts. At least I don't see much on it.

What people seem to do a lot is pick a chart they feel comfortable with and use that as their main stay. For example, I use the hour chart but also always check out the 30 minute and the 15 minute as well. Everyone I've spoken with use multiple charts (time frames) I guess it's what ever floats you boat.

Have a good one
Happy learning experience.

B
A trend line can only become a trend line when you find ( at least 3 points ) this can be on horizonal patterns or downward/upward pattern. Finding some sort of Resistance points (3 points min) you then can go down to find trend lines on the support ( again at least 3 points ), this then forms the trend of the trading CHANNEL.

Hope this is of help.

I can explain further if required, Best wishes.
Quoting dragon77
Thanks Eastmaels, sorry if I confused.

On the chart question, I wanted to know what the best expansion is on any given time chart ie, when a "daily" chart is quoted and 1 candle represents 1 day, what is the best span to view these over ? how far back in time would the chart be best viewed at and whether there was a general rule of thumb.

Hope this helps .
Hello Dragon 77

I am not aware of a rule of thumb for precisely what you are asking. But many traders use the 3 screen approach. Since you suggested daily why not start there. Then maybe 4 hr and 1 hr. But lets put trading aside for awhile (hard to do due to excitement) until you get a feel for how one chart flows into the other.

Also if you are planning to trade by watching the screen for longer periods of time maybe 15 mn 1 hr and 4 hr charts will offer some insight.

A completed candle hides the fluctuations that occurred during its time frame. It does show the open, close, low and high but not what happened within that day or hour. It is interesting to compare a 15 mn chart with a daily chart.

Find a chart package that allows you to answer your question. It should allow you to squish the daily bars together so you can see back months and maybe a year but still see the most recent candle at the same view. This will give you a great visual of price action over time. (CMS VT charts allow for this and there are probably many others.)

welcome and good trading.

Lou
Quoting renasdad
here could be a dumb answer. let me give it a try. When I was getting taught how to draw trend lines, they are pretty much the same as support and resistance only in an uptrend or downtrend. What I was taught about drawing them is some people like to be very careful where they put the lines but, think of it more as a range where price is gonna stop and turn around. if you want to be very precise with where to put them, that is fine but, more times than not the price will go past the "perfect line or will not quite make it. The best trend lines are where the price is most of the time. not just the extremes. the extremes are where the price will jump or drop to quickly and retrace. Ok, this is probably getting a little confusing, I think I am starting to confuse myself.
Well, ren's reply is very nice answer to your question, dragon..
I think that's why I suck at trendlines.. I always want it to be precise..
But anyway, try it and just practice with it... I hope I could follow my advice... hehe...

As for the length of the chart, what I'm currently doing is just looking at the chart that fits on my screen...
But for me, the longer the better.. It gives you a bigger picture..
So if I had a bigger screen like MuddBuddha's, I'd have it too..
But I think that the longer term trader you are, the bigger the picture, the better.. But if you're just a short term trader, I think you really don't need that much candles or bars on your screen.. Again, just my opinions...

Just to show you what I mean by "I look at the chart that fits my screen", see the attached file. This is what I mostly look at..

Anyway, hope this helps.

Regards,
East
Attached File
File Type: zip Sample Chart.zip   69 KB | 249 downloads
Well, to point 1. Steve Nison who is considered one of the all time authorities on Candles says the wicks should not be considered. Personally I do not think it matters as long as you do it the same way every time to produce consistency.

As to point 2, regardless of the time frame you are working with, the more bars or candles you have on your screen, the easier it is to spot Techincal patterns like Head & shoulders, triangles, flags, pennants...

I like to start with the longer time frame first to get an over view and then work my way down to the 15 minute chart. I generally do not use the 15 minute for signals only to see price action... I personally work mostly in the 4 hour time frame for my signals, but that is just my peronal choice and fits my type of trading...

I think it is safe to say that newer traders try to trade too often and on to small a time frame... In the book Bird Watching In Lion Country the author says looking at a 5 minute chart like standing on the side of the highway watching cars with binoculars. They just pass by in a blurr. However, if you step back and stand on a hill you can see the flow of cars on the highway. What would appear to be random begins to show the patterns of flow that are there...

Scott


Quoting dragon77
Well I have to say what a very useful Forum this is, I have trawled through most of the newbie stuff here and i am sure I will find the answer somewhere but just to help get me started could someone answer these 2 questions for me
1. when drawing trendlines on a candle chart does one connect the wicks or the bodies ?
2. I see reference to different timeframe charts ie hour, day ,15min etc, could someone advise in the best period of time time to look at ie, if i want a "day" chart would this best over a week, a month, a year ?
I have no feel for what is the best way of viewing these charts, is there a "rule of thumb" I could use ?
I thank you all in advance and promise not to ask too many dumb qusetions.
Eastmaels

Many thanks to you I think ( excuse the pun) i have the picture now !! looks like the further back in time, with the current candle visible looks good........thanks

Also thanks to all the others for your info................such a friendly place
  • Post #12
  • Quote
  • Last Post: Jan 7, 2008 1:44am Jan 7, 2008 1:44am
Quoting dragon77
Well I have to say what a very useful Forum this is, I have trawled through most of the newbie stuff here and i am sure I will find the answer somewhere but just to help get me started could someone answer these 2 questions for me
1. when drawing trendlines on a candle chart does one connect the wicks or the bodies ?
2. I see reference to different timeframe charts ie hour, day ,15min etc, could someone advise in the best period of time time to look at ie, if i want a "day" chart would this best over a week, a month, a year ?
I have no feel for what is the best way of viewing these charts, is there a "rule of thumb" I could use ?
I thank you all in advance and promise not to ask too many dumb qusetions.

I loved that analogy smjones, I'm buying that book sometime this weekend.

To the poster, I personally start my trendlines from the top of the wick and run it against the body of the most recent highs/lows - or sometimes along the wicks - but most of the time it's against the real boadies...in my own expereince, I found that to be more accurate for my strategy.

However, the key word is personal experience. Yes, It's fustrating trying to get to the nitty gritty of doing it "the right way", but there is no right way to drawing them...the only possible way to make them work for you is if you practice for a couple of weeks drawing them. The concept is always simple, it's implementing them to make it profitable that makes it really challenging, yet fun, so have fun with this (or try to atleast).

Secondly, the timeframe thing...yea, that is probably going to take you longer to get used to then learning to draw trendlines on price charts. But I assure you, learning it the right way and being patient with yourself (meaning, forget trading live until you get all this down pact playing in a demo account) will be worth your time & effort.

Anyways, time flies and before you know it, drawing trendlines , reading PA, and associating larger timeframes with smaller timeframes becomes a part of who you are subcoincously.
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