Since childhood we've learned to draw lines. You simply connect two dots and you've got a line. It doesn't have magical powers, it can't stop trains, speeding bullets, or even price action.
All too often I see chartists and technicians connect two dots and then assign some unearthly significance to the power of that line. Sure, the first point of the segment is some significant swing pivot but the second point is on the far right edge where there is absolutely no evidence that the market will respect that region. The chartist simply continues to draw that line until it works all the while making poor trading decisions off of the "interim" line.
In the trading world, a line only has significance if it is able to hold price a third or even a fourth time. After multiple touches the line does take on some importance. The more times a line can hold an advance, the stronger it becomes.
A line drawn from two simple points is just that; simple and the person who places importance upon that line is equally simple.
All too often I see chartists and technicians connect two dots and then assign some unearthly significance to the power of that line. Sure, the first point of the segment is some significant swing pivot but the second point is on the far right edge where there is absolutely no evidence that the market will respect that region. The chartist simply continues to draw that line until it works all the while making poor trading decisions off of the "interim" line.
In the trading world, a line only has significance if it is able to hold price a third or even a fourth time. After multiple touches the line does take on some importance. The more times a line can hold an advance, the stronger it becomes.
A line drawn from two simple points is just that; simple and the person who places importance upon that line is equally simple.