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Attachments: Why do trendlines work?
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Why do trendlines work?

Quoting DarrenLehma
{quote} Yes, & sometimes it works as like support and resistant level; then we can set our TP & SL based of trend line.
I use them mainly for that purpose and I find that one can judge where the supports and resistances are based on them quite accurately.
Quoting mlawson71
{quote} I use them mainly for that purpose and I find that one can judge where the supports and resistances are based on them quite accurately.
Really, it helps! I got your intention mate, because I’m also with the same plan (almost).
I have seen many times that when price breaks a Trendline a double top/bottom is formed with the previous low/high prior to the break, then price continues in the direction of the Trendline. Price will either break back through the Trendline too resume the trend or price will find support/resistance at the Trendline before reversing.
Quoting gannwd
I have seen many times that when price breaks a Trendline a double top/bottom is formed with the previous low/high prior to the break, then price continues in the direction of the Trendline. Price will either break back through the Trendline too resume the trend or price will find support/resistance at the Trendline before reversing.
Yes, this type of pattern depends on the market momentum & the strength of market trend; so we shouldn’t use trend line so blindly.
I love trend lines
Quoting Forexkongs
I love trend lines
Actually this is the video that I wanted to post. Sorry about that.
Inserted Video
I think as other (much wiser than me) minds have pointed out. If enough people believe in the trendlines and make their trades accordingly, then the trend line would work that way. Self-fulfilling prophecy, I guess.

Now being a rookie myself, pardon me for my ignorance, but isn't that what happened to bitcoin. People believed its value is increasing and this made the demand for bitcoin shoot up. And then once it reached a tipping point, everyone panicked and sold off. I guess that's one lesson I am taking from this thread.

Never give your heart the driver's seat. Sorry for the rant here. But like always, I learn so much by just browsing through these threads. Seriously, I appreciate everyone here.
Quoting mlawson71
{quote} I use them mainly for that purpose and I find that one can judge where the supports and resistances are based on them quite accurately.
Basically Support/Resistant levels are too much important; whatever the type is horizontal or trend line! In addition, in my live trading I use the trend line tool so consistently.
Trend-line exist. But you have to identify the right time to entry and exit the market. Strong trend always fact in this matter. Try to identity that as well.
Quoting vaflis
why do pigs fly?
I have never seen pigs fly???
Interesting.

A recently bumped 15-year old thread now with 51 posts (exactly one third of which were made by members now banned) but not one person has addressed the issue to which the original question simply assumed a positive answer: do trendlines actually "work"?

My experience is that only horizontal ones do, and that’s because they display S/R.

For myself, I’ve never seen anything other than anecdotal, cherry-picked evidence for any other kind of trendline "working".
Quoting KarlKraus
Interesting. A recently bumped 15-year old thread now with 51 posts (exactly one third of which were made by members now banned) but not one person has addressed the issue to which the original question simply assumed a positive answer: do trendlines actually "work"? My experience is that only horizontal ones do, and that’s because they display S/R. For myself, I’ve never seen anything other than anecdotal, cherry-picked evidence for any other kind of trendline "working".
I'd post from my older user but it's been banned as well. ha.
I know for a fact that horizontal trendlines work because of the derivatives market behind those levels.
Real life example: Large options at 1.0800 in EurUsd causing hedging to go on there in the past month. OTM Call option writers (sellers) must fully hedge their position by the strike price by buying levels below 1.08. Option buyers and OTM Put sellers must sell at levels above 1.08. Of course this orderflow picks up if the level is close near the time they expire. The most popular expiration being NY 10am cut. Options further away have much smaller gravitational effect.
Quoting pambeesley
Am interested in the reasoning behind why trendlines work? For example, why is it that SOMETIMES, prices will still respect a trendline drawn and extended many days before? Thanks
Trendlines work because they represent visual representations of the underlying supply and demand dynamics in the market and many traders base their analysis on them. When drawn correctly, trendlines connect significant highs or lows in a price chart, indicating the direction and strength of a trend. The efficacy of trendlines lies in the psychological aspect of trading, as they reflect the collective behavior of market participants
Quoting pizd0s
{quote} Trendlines work because they represent visual representations of the underlying supply and demand dynamics in the market and many traders base their analysis on them. When drawn correctly, trendlines connect significant highs or lows in a price chart, indicating the direction and strength of a trend. The efficacy of trendlines lies in the psychological aspect of trading, as they reflect the collective behavior of market participants
Very well said by pizd0s. A trend line works when enough traders believe in them.

Best of luck yo you all.


C
Trendlines work due to market psychology and collective behavior. They represent support or resistance levels where traders buy or sell, reinforcing the trend. Additionally, they offer visual cues for decision-making, aiding in identifying entry and exit points. Thus, trendlines serve as valuable tools in technical analysis.
Trends are predictions of past results to future positions. I think of it like our weather alerts. It rains when the clouds gather. The coming of dark clouds is just a trend, but it does not mean it is absolutely correct. While believing in trends, we must always remain vigilant and be prepared to control risks. I think this is the right thing to do.
Trading life is full of fun
Trendlines work because they help traders visually identify and capitalise on prevailing market trends. They are drawn by connecting multiple price points over a period, creating a straight line that represents support in uptrends and resistance in downtrends. This simplicity allows traders to anticipate potential price movements based on historical performance.

The effectiveness of trendlines lies in their ability to reflect the collective actions and psychology of market participants. When a trendline is respected, it confirms the prevailing sentiment in the market, whether bullish or bearish. Traders often place trades in anticipation of the price reacting in a predictable manner upon reaching these lines, which can create self-fulfilling prophecies as multiple traders act in similar ways at these key levels.

Overall, while trendlines are based on simple concepts, their power comes from the collective adherence to these perceived supports and resistances, making them fundamental tools in technical analysis.

It's important to note, however, that trading involves risk and trendlines aren't 100% accurate. Always trade with funds that you can afford to lose and don't forget to place Take profit and Stop loss orders for better risk management.
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If you will check, you will find the the best TLs are the horizontal ones, they are the only ones that can be drawn objectively
"When you look at what you want to see, the RSI at 70 works in a twin peak. But when you look at reality, you don't see it that way."
Quoting gannwd
{quote} Actually this is the video that I wanted to post. Sorry about that. https://www.youtube.com/watch?v=5SjnwSj5WwQ
My projections with the lines I have a better!
All the lines I have match up almost perfect to any candle movement XD
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