Trendline Points Clarification | Forex Factory

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Trendline Points Clarification

  • #1
  • First Post: Dec 26, 2006 11:59am Dec 26, 2006 11:59am
I realize this system has been beaten to death but after reading hundreds of posts, I'm still trying to figure out some of the finer details.

Instead of asking it here, I'm attaching a chart with teh question.

Anyone who understands this system, I'd appreciate your help,

JH

http://www.lentrica.co.uk/images/fx/std/mouteki.gif

Have I drawn them correctly?
  • #2
  • Dec 26, 2006 12:03pm Dec 26, 2006 12:03pm
The most recent one applies. That means you just broke the upper trend line that defined a down trend and you bounced off the most recent lower trend line that defines a up trend. So, you are in a uptrend. an the broken downtrend line should become support...


It looks to me like you have drawn them perfectly for a TDTL level 2. With the following exception that the newest up trend line is not valid until you have completed the second bar . In other words the bar that is current must close then that line is valid.
  • #3
  • Dec 26, 2006 12:14pm Dec 26, 2006 12:14pm
ok, I understand what you're saying but why couldn't I have done this?

http://www.lentrica.co.uk/images/fx/std/mouteki2.gif

I mean, since there are many possibilities of connecting various points, there could be several trendlines which fit the criteria.

The most recent one could be a crappy one like the one shown here whereas the one before that could be a good looking setup like that in my previous post.

Which one do we use? It seems a little subjective as to which points are 1 and 2.

JH
  • #4
  • Dec 26, 2006 12:14pm Dec 26, 2006 12:14pm
I would say that none of those trendlines apply for a couple of reasons:

1. They weren't drawn from significant market swing points therefore they bear no importance when broken.

2. They only involve 2 price intersections. Everyone knows a line can be drawn between any 2 points. What makes it special is when it is tested for a third (or more) time.
  • #5
  • Dec 26, 2006 12:22pm Dec 26, 2006 12:22pm
Phil, that may be true, but he is asking if these are Moteki or TDTL trend lines .. Under the strict definition of both of these, they are...

I agree that under more common definition of trend lines they are not.

This of course is explained in
Tom DeMark's book.
Quoting philmcgrew
I would say that none of those trendlines apply for a couple of reasons:

1. They weren't drawn from significant market swing points therefore they bear no importance when broken.

2. They only involve 2 price intersections. Everyone knows a line can be drawn between any 2 points. What makes it special is when it is tested for a third (or more) time.
  • #6
  • Dec 26, 2006 1:15pm Dec 26, 2006 1:15pm
ooops. I didn't notice this was thread specific. my bad.
  • #7
  • Dec 26, 2006 1:38pm Dec 26, 2006 1:38pm
No, my bad, I should have stated what I was talking about to begin with...



Quoting philmcgrew
ooops. I didn't notice this was thread specific. my bad.
  • #8
  • Dec 26, 2006 1:43pm Dec 26, 2006 1:43pm
You could have done this, but it would not alter the outcome. It is still an uptrend with a broken down trend line. This is technically the most recent... You are correct, if the second most right bar is not higher than the right swing high point... From my view point on the graph, it looks like it is higher.



Quoting Jetheat
ok, I understand what you're saying but why couldn't I have done this?

http://www.lentrica.co.uk/images/fx/std/mouteki2.gif

I mean, since there are many possibilities of connecting various points, there could be several trendlines which fit the criteria.

The most recent one could be a crappy one like the one shown here whereas the one before that could be a good looking setup like that in my previous post.

Which one do we use? It seems a little subjective as to which points are 1 and 2.

JH
  • #9
  • Dec 26, 2006 2:35pm Dec 26, 2006 2:35pm
To take the correct TL, use a momemtum indicator...
Youl reduce your risk at the same time...
TL by it self is not enought...
Sorry for my bad english translation
  • #10
  • Dec 26, 2006 3:48pm Dec 26, 2006 3:48pm
this is a very weak up trend if a trend at all. On a more long term basis, it is more of a symetrical triangle pattern as the price consolidates showing that neither the buyers nor the sellers have a clear direction, and it is awaiting for a breakout. However, if one must determine if the buyers/seller is stronger, the most recent price action shows the buyers are stronger than the sellers. Not really good risk/reward to worthwhile a trade. IMHO
  • #11
  • Dec 26, 2006 8:50pm Dec 26, 2006 8:50pm
OK thanks guys, I think I understand.

If I have any more, I'll post it here.

JH
  • #12
  • Dec 30, 2006 6:58am Dec 30, 2006 6:58am
Quoting Jetheat
ok, I understand what you're saying but why couldn't I have done this?

http://www.lentrica.co.uk/images/fx/std/mouteki2.gif

I mean, since there are many possibilities of connecting various points, there could be several trendlines which fit the criteria.

The most recent one could be a crappy one like the one shown here whereas the one before that could be a good looking setup like that in my previous post.

Which one do we use? It seems a little subjective as to which points are 1 and 2.

JH
I like the second one for the sole reason it is closer to the right hand side of the chart. Thats where the money is made.

I have only studied these lines in theory so I may be biased in my comments.
  • #13
  • Dec 30, 2006 7:00am Dec 30, 2006 7:00am
Quoting Jetheat
OK thanks guys, I think I understand.

If I have any more, I'll post it here.

JH
Feel free to post more that you have. We can all learn together.

Zygons
  • #14
  • Dec 30, 2006 10:35pm Dec 30, 2006 10:35pm
depending on the amount of bars u draw ur trendline...the smaller the amt the less significant the breakout.
  • #15
  • Jan 3, 2007 8:30am Jan 3, 2007 8:30am
Can TD lines be backtested or are they pure discretionary?
  • #16
  • Jan 4, 2007 4:11am Jan 4, 2007 4:11am
Quoting Jetheat
I realize this system has been beaten to death but after reading hundreds of posts, I'm still trying to figure out some of the finer details.

Instead of asking it here, I'm attaching a chart with teh question.

Anyone who understands this system, I'd appreciate your help,

JH

http://www.lentrica.co.uk/images/fx/std/mouteki.gif

Have I drawn them correctly?
You will have very high succes rates using trendlines like To Go Long and To Go Short - 2.

Bigger the span and gap between the points that make the trendline the better!
  • #17
  • Jan 4, 2007 4:12am Jan 4, 2007 4:12am
Quoting Jetheat
ok, I understand what you're saying but why couldn't I have done this?

http://www.lentrica.co.uk/images/fx/std/mouteki2.gif

I mean, since there are many possibilities of connecting various points, there could be several trendlines which fit the criteria.

The most recent one could be a crappy one like the one shown here whereas the one before that could be a good looking setup like that in my previous post.

Which one do we use? It seems a little subjective as to which points are 1 and 2.

JH
If you are using those two points, so close of each other, trade on a LOWER time-frame, 1h, even 30 minutes, for better entries and succes rate.
  • #18
  • Jan 23, 2007 9:54am Jan 23, 2007 9:54am
im quite new in this mouteki.. but i have successfully make some pips.. my way is.. first.. i would check other indicators what is the trend for time frame H4 and D1.. make sure both are same (means if uptrend.. both shows uptrend.. vice versa - and yes.. it takes quite some time)..

after that i'll draw my mouteki lines to project the target..

just my two pips.. any comments?
  • #19
  • Jan 23, 2007 10:28am Jan 23, 2007 10:28am
Quoting Jetheat
I realize this system has been beaten to death but after reading hundreds of posts, I'm still trying to figure out some of the finer details.
Instead of asking it here, I'm attaching a chart with teh question.
Anyone who understands this system, I'd appreciate your help,
JH
Have I drawn them correctly?
Although I'm not using them at the moment, I found this indi is very good, and there was a thread devoted to it.
I won't post my version as there may have been an update, and I notice the thread is closed http://www.forexfactory.com/showthread.php?t=8780 but I'm sure if you read through it or PM lightkeeper he'll advise on current state of play
It picks the right Highs and Lows, according to both Tom DeMark, and Mouteki, so will take the indecision out of the equation for you.
  • #20
  • Jan 26, 2007 2:20am Jan 26, 2007 2:20am
Quoting Zygons
Can TD lines be backtested or are they pure discretionary?
I know this question has become a bit old but since no one has taken it up yet...

Yes, TD lines can be backtested.

No, they are anything other than discretionary. Tom DeMark believes in trading mechanically and the systems - TD lines included - that he developed are all mechanical.
I am JuMPeR.
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