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How to draw trendlines

  • #1
  • First Post: May 18, 2007 4:06pm May 18, 2007 4:06pm
Hi everyone,

I was doing some simple technical analysis on one of the markets I am currently watching and posted it on another bulletin board I frequent.

I was a little dismayed to get the response from a senior member: "Most people don't know how to draw lines on a chart - you are one of them".

I've been studying charts and actively trading for over two years so it worries me to be told that I am not drawing my lines right.

Of course I have asked the trader in person but while I wait for a response I thought I would put it to this forum.

I know Technical Analysis is an art and that it is therefore subjective but now I am wondering if there is indeed something wrong with my charts.

So I have posted my charts (following post) and two clean ones (this post).

Would anyone be so kind as to either draw their own lines on either or both of the clean charts to show me how they would analyse this market or tell me where I am going wrong on mine?

Thanks,

Tom
Attached Image(s) (click to enlarge)
Click to Enlarge Name: bobl_new.jpg Size: 51 KB
Click to Enlarge Name: bund_new.jpg Size: 47 KB
  • #2
  • May 18, 2007 4:07pm May 18, 2007 4:07pm
Here is my Technical Analysis for the Bund.
Attached Image (click to enlarge)
Click to Enlarge Name: bund_mine.jpg Size: 67 KB
  • #3
  • May 18, 2007 4:08pm May 18, 2007 4:08pm
Here is my Technical Analysis for the Bobl.
Attached Image (click to enlarge)
Click to Enlarge Name: bobl_mine.jpg Size: 53 KB
  • #4
  • Edited 8:59am May 19, 2007 6:38am | Edited 8:59am
The other trader avoided telling me where I was going wrong and simply said that the lines seemed to be working for me and "if it ain't broke, don't fix it".

Still, I would really appreciate any insight as to where I am going wrong here.

Thanks,

Tom
  • #5
  • May 19, 2007 9:50am May 19, 2007 9:50am
we have about the same experice time in trading and your lines look good to me.

THere are some good articles on trend lines in this thread.

http://www.forexfactory.com/showthread.php?t=8464

when it comes to senior members of a forum I have found there are some good leaders, not all seniors are kind in nature, dont let it get to you.
  • #6
  • May 19, 2007 9:58am May 19, 2007 9:58am
Telling you something is wrong without telling you why is simply an opinion without evidence.

Everyone has an opinion.

Lou
  • #7
  • May 19, 2007 10:15am May 19, 2007 10:15am
Quoting the_wizard
The other trader avoided telling me where I was going wrong and simply said that the lines seemed to be working for me and "if it ain't broke, don't fix it".

Still, I would really appreciate any insight as to where I am going wrong here.

Thanks,

Tom
You only know if your trendline is good at the first bounce off it sometime. And in fx, you can be sure it is good if it is broken on strong fundamentals, never looking back.

Then keep it, it is now resistance turned into strong support (or vice-versa).

If price brokes it for no apparent reason, then it might be a bad one.

IMO
  • #8
  • May 19, 2007 10:50am May 19, 2007 10:50am
I would'nt worry about what some annonomys poster that says you are wrong without trying to help you by showing you where you are wrong.....
If it is working for you then it is right....... by the way your lines look OK.
1st rule DO NOT TAKE AS GOSPLE WHAT IS SAID ON A FORUM....
also remember....opinions are like assholes, everybody has one.
Same Whore .... Different Dress
  • #9
  • Edited 12:33pm May 19, 2007 12:10pm | Edited 12:33pm
Note: i used visio to markup your charts, so the lines are not exactly where i would have put them if i had the actual chart in my pgm, however, i think you can get a close enuff idea of what i am attempting to illustrate.

the first jpg blocks out some of the price bars to simulate the unknown.
as you work on static charts, honing your skills, you have to keep in mind that drawings are not in realtime.
a good exercise in charting would be to hide portions of the historical chart and work on segments - aiming to define the future possibilities for market direction.

the first jpg identifies a trading range and a breakout.

the second chart attempts to help determine:

1. the support and resistance levels of the breakout trend.
2. a potential topping spike hi bar (don't try to pick tops) -which is really only useful after confirmation of:

3. the potential dbl top / small head w/shoulders area

4. the trendline failure

5. retest of the pre-breakout resistance which may become a support.

6. failure of the pre breakout R area to become a support for continued uptrend and failure of support at the longer term uptrend support line

7.testing of the pre-breakout support level identified in the prior Trading Range S/R channel

8. failure of the are mentioned above in #7.

9. resistance testing of the same area.

10. mkt failure to sustain itself above the last resistance area tested.

if u want to add more - it could be the new trading range established after # 10; so on and so on.

There is more than one way to skin a cat and these 'drawings' will often be used in conjunction with other tools to help you manage your risk vs. reward while attempting to determine market direction with reasonable odds.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: chart001.jpg Size: 94 KB
Click to Enlarge Name: chart002.jpg Size: 144 KB
  • #10
  • May 19, 2007 12:18pm May 19, 2007 12:18pm
Trendlines are subjective. No two people will draw them the same.

That's why I like DeMark's trendlines. They are mechanical and objective.

If yours work for you, keep doing them the way you do them.
  • #11
  • May 19, 2007 12:24pm May 19, 2007 12:24pm
Quoting the_wizard
Hi everyone,

I was doing some simple technical analysis on one of the markets I am currently watching and posted it on another bulletin board I frequent.

I was a little dismayed to get the response from a senior member: "Most people don't know how to draw lines on a chart - you are one of them".

I've been studying charts and actively trading for over two years so it worries me to be told that I am not drawing my lines right.

Of course I have asked the trader in person but while I wait for a response I thought I would put it to this forum.

I know Technical Analysis is an art and that it is therefore subjective but now I am wondering if there is indeed something wrong with my charts.

So I have posted my charts (following post) and two clean ones (this post).

Would anyone be so kind as to either draw their own lines on either or both of the clean charts to show me how they would analyse this market or tell me where I am going wrong on mine?

Thanks,

Tom

I cannot say that that you have drawn them wrong. Maybe not complete. I have 10 years experience in stock trading. Can you post the same 2 charts but with the 21EMA(Exponential Moving Average), the 89SMA(Simple Moving Average) and the 200SMA plotted on it. I want to show you something that you will use for ever.
Thanks
Phillip
  • #12
  • May 19, 2007 12:26pm May 19, 2007 12:26pm
Quoting the_wizard
The other trader avoided telling me where I was going wrong and simply said that the lines seemed to be working for me and "if it ain't broke, don't fix it".

Still, I would really appreciate any insight as to where I am going wrong here.

Thanks,

Tom
you are going wrong, but the lines are working?? is that even possible?? how can something thats wrong, work?
  • #13
  • May 19, 2007 12:28pm May 19, 2007 12:28pm
Not sure if this how most do it, but the rules I follow. Respect recent price spikes, older spikes can be drawn through to make the trend line fit better. Try to line up at least three peaks or dips where two bars or candles have about the same price. You can use two peaks or dips, but the trend isn't completely confirmed with 2 peaks or dips, but still often offer a decent place for profit.
  • #14
  • May 19, 2007 12:59pm May 19, 2007 12:59pm
Quoting AmeriTrini
you are going wrong, but the lines are working?? is that even possible?? how can something thats wrong, work?
Out of context ur'e right but these lines might be wrong to you, me or that guy from another forum. In case of appropriate rules they might work as well. Just like someone presents a complex system and trendliners say it's completely useless because they don't understand a thing from it

So in general it's hard to say which lines are right or wrong however I suppose that the main trendline would be the same for most of people trading H4 or Daily but the use of it would be different.

bla bla bla
  • #15
  • May 19, 2007 1:19pm May 19, 2007 1:19pm
Quoting Phillip Nel
I cannot say that that you have drawn them wrong. Maybe not complete. I have 10 years experience in stock trading. Can you post the same 2 charts but with the 21EMA(Exponential Moving Average), the 89SMA(Simple Moving Average) and the 200SMA plotted on it. I want to show you something that you will use for ever.
Thanks
Phillip
Phillip,

Thank you for your response. I've followed some of your threads - particulary the five minute intraday strategy which I have used with some success. I really respect what you are doing as a teacher and trader so it's a privilege to have you giving your help here. Unfortunately the charts I use do not have enough data to display the 200SMA and the 89SMA is relatively short so I cannot do as you asked! I will have a look on the web and see if I can find another source of data that can go further back as I am very intrigued by what you have said.

Thanks again,

Tom
  • #16
  • Edited 1:33pm May 19, 2007 1:21pm | Edited 1:33pm
fx_ninja - Thank you very much for your reply.

That is a GREAT POST.

I am going to save that as a source of reference.

Tom
  • #17
  • May 19, 2007 2:39pm May 19, 2007 2:39pm
If you know the motion of the Market you will know how to draw your trendlines to anticipate future motion.
Attached File(s)
File Type: pdf Market Motion.pdf   38 KB | 2,430 downloads
File Type: zip Market Motion.zip   838 KB | 1,774 downloads
  • #18
  • May 19, 2007 4:04pm May 19, 2007 4:04pm
Don't know if it's the right or the wrong way. But I switch to a line chart, draw my lines and then switch back to a bar chart and adjust to the nearest hi/lo.
  • #19
  • May 19, 2007 5:34pm May 19, 2007 5:34pm
Quoting Phillip Nel
If you know the motion of the Market you will know how to draw your trendlines to anticipate future motion.
Phillip that's a great tutorial. THANK YOU!

I base my trades exclusively on S/R, trendlines and fibos however from now on I'll also look at your MAs combination for a further confirmation.

I checked them against the main pairs on the weekly charts and they definitely are useful.

Good job
Money is merely a by-product of one's skills as a trader - M. Douglas
  • #20
  • May 19, 2007 5:46pm May 19, 2007 5:46pm
Quoting the_wizard
Hi everyone,

I was doing some simple technical analysis on one of the markets I am currently watching and posted it on another bulletin board I frequent.

I was a little dismayed to get the response from a senior member: "Most people don't know how to draw lines on a chart - you are one of them".

I've been studying charts and actively trading for over two years so it worries me to be told that I am not drawing my lines right.

Of course I have asked the trader in person but while I wait for a response I thought I would put it to this forum.

I know Technical Analysis is an art and that it is therefore subjective but now I am wondering if there is indeed something wrong with my charts.

So I have posted my charts (following post) and two clean ones (this post).

Would anyone be so kind as to either draw their own lines on either or both of the clean charts to show me how they would analyse this market or tell me where I am going wrong on mine?

Thanks,

Tom
look at your attached charts.

you need lot more bars or candles to draw a trend line. zoom out.
BAM BAM BOOM! -bravado
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