trend lines

hello mouteki !!!!
first of all i want to tank you for you'r effort to make us a better trader's.

i have difficulty to understand some of your example's that you made in the powerpoint about choosing the right trend line point's
i mean why did you choose demand line and not supply see the attach files.

tank's moshe
p.s
i'm sory for my bad english

You should draw both lines at all time. In that example you pointed out, the price was more closer to the demand line so he only highlight that line instead of confusing you with a second line that doesn't come into play with the entry.

the first arrow that i drow from the right is closer to the price (supply line)
so i dont understand please explain

tanks for the fast response

can some one please elaborate on the selection of points or point me to a thread that explains this?

I don't know the reason why or how he uses TD Supply / Demand lines but it may be because he is using higher TD points so the Demand line would be closer to price than the Supply line.

Looks like maybe TD points(3) meaning 3 higher highs on either side of a pivot low or 3 lower lows on either side of a pivot high.

ok, so is that mean everytime im trying to use mouteki i need to test out both DEMAND & SUPPLY line? this is 4 hour chart for GBP/USD, i worked out the demand line for it, am i doing it correctly?

please advice, Thanks.

http://img385.imageshack.us/img385/7...pusdgw0.th.gif

First they are not TD Line, they are demand and supply...
For 2 reason:
1- You must have 2 lower low or higher each side.
2- It does not use the most recent TD Line
So there not TD Line

He just use the concept of TDLine, but only when they are 2 or 3 candle each side, thats it...

The problem with Mouteki and other technics is, what breach is the good one?
Even if you test both, it does not mean it will fullfill the target point.
So yes, you must test each one. But if you fallow is rules (If i dont make a misktake), you must define the line at the begining of each week...

But if you test all the possible line, you will have a million line on screen ;-)
Many people are fighting with this, because they are so many false signal.
See the main Mouteki thread for further knowledge...

Even if it does not say to use indicator, i think to accuratly use them, you must at least use a momentum indicator to pinpoint a good entry.


Ps.: haha22, if you use Metatrader and ray line,maybe you should reverse the line :-) ...

what do you mean by reverse the line? lol..

Thanks anyway

The line should be projected into the future, not the past.
Thats my reverse. ;-) lol

Here are some additional ideas for using trendlines and support and resistance, some of which may be covered in the Mouteki thread, which I am going to read next, and some of which might be new/helpful to you.

1. First, make sure that you're testing whatever type of trendlines you're thinking of using. Testing means that you go back in time on the charts, you draw your lines, you move forward and make trades, marking down your performance as you go. I believe you can be surprised at how much you can learn about which trendlines you like better (ie, where you like to draw them) if you simply do this testing.

2. Second, try short term trading off long term trendlines. This means that you go to the daily chart or the weekly chart and you draw a support / resistance line. Often this line is a simply horizontal line across a point that was touched at least twice in the past. I've attached a chart to this post, called SR1.gif. It will show a daily chart of the GBP/USD. The 1.9150 area was a good point of resistance in the past. Then it gave way. If the pair falls back down to that level, and I believe it has a great chance of doing that in the month of January 2007, then it should stop there. A trader could buy at that level for just 20-50 pips, with a stop of about the same size. This means you're taking a long term support line and making a shorter term trade.

3. Third, I highly recommend two books. One is Technical Analysis of Stock Trends, the 8th edition. This is the bible of trendlines and support and resistance. It is a big book, and it's not easy to get through sometimes, but it has some amazing information for a trader who wants to use trendlines and support and resistance. The next book is Pring on Price Patterns. I think the reason that Martin Pring did such a great job is that he (whether he meant to or not) re-introduces the concept of line charts in support and resistance trading. I've attached an example of a line chart, line1.gif (this is a recent example of the 15 minute GBPUSD chart), so you can see what I am talking about. Sometimes using a line chart makes it easier to notice / trade a break of support and resistance. As with everything else, testing what you're going to trade is mandatory.

Good point rob...

But it sound like: buy the dips in a uptrend ans sell the rallys in downtrend...
I think its hard to do for new trader...

Yes, most of the time the line will be retested and is a good place to take a trade but,
only if you draw your trendline correctly, and thats the hardest thing to do for new trader.

In line1 you draw a good support ( Higher low each time) but new trader sometime forget that( you could have done 3 or 4 diffent bad lines)...

I think they must master support and resistance before buying on retracement. Also i think new trader should only go for good/clear breach.

Good idea(#1) to do backtesting, for those that whant to do this,
with MT4 you can do that by loading a blank EA(That do nothing) in the expert adviser, so you will be doing td line in real time.

These are interesting points.

1. A "correct" trendline is not easy to define. Most people find that it's easy to see which lines worked well in the past, but very difficult to draw them and use them on the far right edge of the chart. This is why it is so important to do the testing.

2. A new trader won't draw trendlines like an experienced one of course! But that is the point of reading as much as possible and then making some hypotheses about how S/R works, and then doing the testing to prove or disprove the theory. There isn't any substitution for hard work, most especially when using something as "subjective" as trendlines.

3. What do you mean by a good/clear breach? Is that a certain number of pips beyond a trendline? How many, on what time frame charts? Is this something that you do on a regular basis?

Clear breach is not just td break...
What make the currency move? Buyer and Seller!
Each move is associated with 3 thing: Buyer, Seller and Period of inactivity.
So for me a good clear breach is when there is enought buyer/Seller to sustain the breach! How you do that? with Volume.

If Volume is over is average, then you can presume(Its always like that anyway) that there is enough force to drive the currency up or down...

And also, i like the see the Close at the bottom of the Stick(Z shape :for short) and the reverse for long.

Since i associate volume with trading... i use 15,1H and or 4h, because the other timeframe are a little bit weird with volume

GBP/CAD
Instrument has reached its button.
After consolidation it will go toward 1.79960 ... but it takes time.
Now we have
BUY1 = 1.64085 (already in market)
BUY2 (limit) = 1.63234

BTC

We have two resistance levels ... and do not eager to lost them.
So
SELL2 (limit) = 14123.80
SELL1 (limit) = 13623.80

XAU / USD

The gold rush is waning, but the ascending flows are still strong. We are preparing to re-touch 1437,904 and surge to 1451,904.
My choice is 1458.904

SELL3 (limit) = 1458.904
SELL2 = 1437.940 --> TP = 1165.904
SELL1 = 1423.904 --> TP = 1165.904