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  • #101
  • Feb 20, 2008 1:05pm Feb 20, 2008 1:05pm
hi Adeiaz1 and all fellow traders out there!

i've a question in mind here regarding drawing trendlines. most of the educational sources on the web suggest that trendline are drawn on the shadows instead of the close of price. however one book that i've read "Trading for a Living" suggest that trendline should be drawn on the close of price. As my trading experience is few, i'm not able to judge whether which is the proper way of drawing trendline. i hope u all can help answer my question and solve my confusion.

1)Which is the correct way of drawing trendline and why?

2)Another question i have is what gd source are there in the net which explain the theory behind SR lines and trendlines? just like Adeiaz1 said that an uptrend tells tt demand is higher than supply and the SR lines(demand lines) etc. most of the sites teaches hot to spot and draw but did not have gd explanation behind. i think that understanding the reason is as important as learning how to draw correctly.

thanks in advance and gd trading to all

Yuna
  • #102
  • Feb 20, 2008 1:52pm Feb 20, 2008 1:52pm
Quoting yuna
hi Adeiaz1 and all fellow traders out there!

i've a question in mind here regarding drawing trendlines. most of the educational sources on the web suggest that trendline are drawn on the shadows instead of the close of price. however one book that i've read "Trading for a Living" suggest that trendline should be drawn on the close of price. As my trading experience is few, i'm not able to judge whether which is the proper way of drawing trendline. i hope u all can help answer my question and solve my confusion.

1)Which is the correct way of drawing trendline and why?

2)Another question i have is what gd source are there in the net which explain the theory behind SR lines and trendlines? just like Adeiaz1 said that an uptrend tells tt demand is higher than supply and the SR lines(demand lines) etc. most of the sites teaches hot to spot and draw but did not have gd explanation behind. i think that understanding the reason is as important as learning how to draw correctly.

thanks in advance and gd trading to all

Yuna
1. The way you see lines are drawn in this thread is 1 way. Why does it work?
Mostly because you have other traders drawing it the same way. And I don't mean only those with 10k $ account. This drawing-method pull lines between where supply/demand changes. This is where you want your lines to be, where supply/demand changes strength. So, traders will look to sell/buy and place stop/loss around this levels, that's why you will see quick (large) movements when price hit those levels again.

It's not hard. When drawing S/R lines you could almost draw them from everywhere with success to some degrees but using a rule on your drawing will make it clearer and stronger, improving where you put orders and stop/loss.

This is also a way preventing you from filling up your charts with 100's of different lines. Try update your lines when you see new candlestick forms in the mentioned way, but also keep your old ones to some degree to see if they still are valid. Only practice will give you experience. So studding price action around your S/R lines is a nice way of getting knowledge of how price behaves here.

2. Try run a google on it (much of help eh?) or run some drawing on your own chart to learn how price reacts on your lines. It's quite easy after a few attempts.

This type of drawing have provided with effective S/R lines so I'm sure you can add this to your arsenal of tools with confidence.
Measure twice, cut once
  • #103
  • Feb 20, 2008 2:09pm Feb 20, 2008 2:09pm
When I don't have any clear support as in this 4h downtrend example, it works taking the same angle as your confirmed resistance-line and just put it where you see price reverse. Of course, you will not trade it, but tend to be valid when retested. Easiest way of doing this is : double-click your line (so it get marked by 3 dots) and press Ctrl bottom and drag it down to your spot. Same angle achieved !

Example of wrong and right drawn lines.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: wrong.gif Size: 31 KB
Click to Enlarge Name: perfect.gif Size: 33 KB
Measure twice, cut once
  • #104
  • Feb 20, 2008 2:19pm Feb 20, 2008 2:19pm
Quoting aediaz1
1. The way you see lines are drawn in this thread is 1 way. Why does it work?
Mostly because you have other traders drawing it the same way. And I don't mean only those with 10k $ account. This drawing-method pull lines between where supply/demand changes. This is where you want your lines to be, where supply/demand changes strength. So, traders will look to sell/buy and place stop/loss around this levels, that's why you will see quick (large) movements when price hit those levels again.

It's not hard. When drawing S/R lines you could almost draw them from everywhere with success to some degrees but using a rule on your drawing will make it clearer and stronger, improving where you put orders and stop/loss.

This is also a way preventing you from filling up your charts with 100's of different lines. Try update your lines when you see new candlestick forms in the mentioned way, but also keep your old ones to some degree to see if they still are valid. Only practice will give you experience. So studding price action around your S/R lines is a nice way of getting knowledge of how price behaves here.
sry aediaz1, jus discovered i spelled your nick wrongly, lol.

so as u say it works be coz it's jus lik an self fufilling phrophecy?
well u hit it right when u said to prevent having 100s of line in my chart.
anyway i'll take note of your point and try to apply it.
meanwhile i'll like to share my view on GJ, but i'll like to admit tt i do not have 1 year of exp in trading which you mentioned in ur 1st post. jus a thought i lik to share and at the same time practice my drawing of tl/sr lines and interpreting them. hope anyone can correct me if i'm wrong
Attached Image (click to enlarge)
Click to Enlarge Name: stay at sidelines.gif Size: 26 KB

this is an hrly chart, it's showing strong res at upper trendline and yet also showing strong support. imho it's best to stay at sidelines. wonder is there a big movement to catch if it breaks the triangle.....
  • #105
  • Feb 20, 2008 2:33pm Feb 20, 2008 2:33pm
Quoting yuna
sry aediaz1, jus discovered i spelled your nick wrongly, lol.

so as u say it works be coz it's jus lik an self fufilling phrophecy?
well u hit it right when u said to prevent having 100s of line in my chart.
anyway i'll take note of your point and try to apply it.
meanwhile i'll like to share my view on GJ, but i'll like to admit tt i do not have 1 year of exp in trading which you mentioned in ur 1st post. jus a thought i lik to share and at the same time practice my drawing of tl/sr lines and interpreting them. hope anyone can correct me if i'm wrong
Attachment
this is an hrly chart, it's showing strong res at upper trendline and yet also showing strong support. imho it's best to stay at sidelines. wonder is there a big movement to catch if it breaks the triangle.....
My purpose for saying that was only meant for daily updates on different pairs

This thread is hopefully here to learn how to draw S/R lines.

Your highest circle around 210.40 is not perfect. Unfortunately you don't have any valid candlestick around that area. You might ask why price stopped at that level? This is where correlating with other time-frames comes in. Take a look at the 4h (and 30min) chart drawn in the example last post, it will tell you.

Your right, stay of out ranging markets, sometimes I have experienced price just to walk tru S/R without any reaction.

A big move will occur when we have so solid wedge like this. We just don't know which way yet.
Attached Image (click to enlarge)
Click to Enlarge Name: perfect.gif Size: 25 KB
Measure twice, cut once
  • #106
  • Feb 20, 2008 2:35pm Feb 20, 2008 2:35pm
so the reason behind the wrong chart in post #101 is because it was not drawn at the point when the mentioned candlestick pattern formed?

anyway thanks for sharing the trick of holding ctrl+ left click for parallel lines didnt know that.
  • #107
  • Feb 20, 2008 2:40pm Feb 20, 2008 2:40pm
Quoting yuna
so the reason behind the wrong chart in post #101 is because it was not drawn at the point when the mentioned candlestick pattern formed?

anyway thanks for sharing the trick of holding ctrl+ left click for parallel lines didnt know that.
sorry i mean post #103
  • #108
  • Feb 20, 2008 3:02pm Feb 20, 2008 3:02pm
Quoting yuna
so the reason behind the wrong chart in post #101 is because it was not drawn at the point when the mentioned candlestick pattern formed?

anyway thanks for sharing the trick of holding ctrl+ left click for parallel lines didnt know that.
Correct, since that specific pattern provide us where supply/demand changes.

But remember, this is not bible for trading, it's only a method I have applied for drawing lines
Measure twice, cut once
  • #109
  • Feb 20, 2008 3:14pm Feb 20, 2008 3:14pm
Quoting aediaz1
Correct, since that specific pattern provide us where supply/demand changes.

But remember, this is not bible for trading, it's only a method I have applied for drawing lines
okae, but i can see that this method adds strength and significance to to your lines.
  • #110
  • Feb 20, 2008 3:58pm Feb 20, 2008 3:58pm
Quoting yuna
okae, but i can see that this method adds strength and significance to to your lines.

It does, good luck with your trading
Measure twice, cut once
  • #111
  • Feb 20, 2008 4:02pm Feb 20, 2008 4:02pm
Maybe it's a good time to go long on usd/chf? I don't trade this pair but it seems to me that there was a breakout today and a retest also happened...
What do you think?
Attached Image (click to enlarge)
Click to Enlarge Name: usdchfm5-02-20-2008--2300.jpg Size: 205 KB
  • #112
  • Feb 20, 2008 4:06pm Feb 20, 2008 4:06pm
Quoting aediaz1
Gbp/jpy
Hi aediaz1

Can I have the indicator that you using on the picture, drawing trend? I am a newbie. Still try to learn. How do you draw the round circle color around the target?

If Aediaz1 is not here, and if any one know, or have the indicator, can you please share.?

I am much graceful.

Thank you.

Forex Star.
  • #113
  • Feb 20, 2008 4:20pm Feb 20, 2008 4:20pm
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Quoting Forex Star
Hi aediaz1

Can I have the indicator that you using on the picture, drawing trend? I am a newbie. Still try to learn. How do you draw the round circle color around the target?

If Aediaz1 is not here, and if any one know, or have the indicator, can you please share.?

I am much graceful.

Thank you.

Forex Star.
are you using MT4, if so right click over the tool bar with the fib's etc on and click customize, insert anything that looks interesting and try it out.

have fun
  • #114
  • Edited 5:19pm Feb 20, 2008 5:02pm | Edited 5:19pm
Quoting MarkGavalda
Maybe it's a good time to go long on usd/chf? I don't trade this pair but it seems to me that there was a breakout today and a retest also happened...
What do you think?
Your lines seems dependable but when drawn from a different point it seems dangerous. Why?

Look how this bearish run have retraced to 61.8 (look how the second attempt matched with resistance) and retested it, provided us with a very strong resistance. That told, chf gives us limited upside (look how price felt down after doing 61.8 retrace on first attempt) and a retest of support-line could be possible. Pinch of salt here, this is not a pair I trade, this is purely technical speaking.

Also, making new highs have failed.

IMO, a better long-opportunity could occur at orange square with red arrow, or a short when resistance-line is retested again.

Nice off you analyze another pair, since I'm mostly stucked with gbp/jpy

Chart turned out to have really bad quality when I took chart-picture from my biggest screen why.. anyway posted 2 charts to make it clearer
Attached Image(s) (click to enlarge)
Click to Enlarge Name: chf.jpg Size: 134 KB
Click to Enlarge Name: chf2.gif Size: 33 KB
Measure twice, cut once
  • #115
  • Feb 20, 2008 5:09pm Feb 20, 2008 5:09pm
Quoting MPP
are you using MT4, if so right click over the tool bar with the fib's etc on and click customize, insert anything that looks interesting and try it out.

have fun
I See it. Thank you MPP.


Forex Star.
  • #116
  • Feb 20, 2008 5:27pm Feb 20, 2008 5:27pm
Quoting aediaz1
Your lines seems dependable but when drawn from a different point it seems dangerous. Why?

Look how this bearish run have retraced to 61.8 (look how the second attempt matched with resistance) and retested it, provided us with a very strong resistance. That told, chf gives us limited upside (look how price felt down after doing 61.8 retrace on first attempt) and a retest of support-line could be possible. Pinch of salt here, this is not a pair I trade, this is purely technical speaking.

Also, making new highs have failed.

IMO, a better long-opportunity could occur at orange square with red arrow, or a short when resistance-line is retested again.

Nice off you analyze another pair, since I'm mostly stucked with gbp/jpy

Chart turned out to have really bad quality when I took chart-picture from my biggest screen why.. anyway posted 2 charts to make it clearer
Wow great post!! I have to admit that I made a sloppy analysis with this pair. I should have looked into it more deeply. Thanks for sharing your thoughts aediaz1! And off I go, U/CHF is already falling.

I'm done for today I made a few pips on G/U, broke even on G/J and completely missed the very good opportunity on E/U. Not my day, maybe tomorrow
Have a good night everyone.
  • #117
  • Feb 20, 2008 5:36pm Feb 20, 2008 5:36pm
Quoting MarkGavalda
Wow great post!! I have to admit that I made a sloppy analysis with this pair. I should have looked into it more deeply. Thanks for sharing your thoughts aediaz1! And off I go, U/CHF is already falling.

I'm done for today I made a few pips on G/U, broke even on G/J and completely missed the very good opportunity on E/U. Not my day, maybe tomorrow
Have a good night everyone.
Just hope it saved your from going long

Not too eager about my own trading day could have traded much more aggressively, buying and selling each time price touched S/R on 30min and 1h. Stick harder with my plan. It's days like this it really can pay of having excellent S/R. Ah well, can't complain.

Don't worry, tomorrow is a new day, new possibilities ! See you @ London start.

Good night.
Measure twice, cut once
  • #118
  • Feb 20, 2008 5:39pm Feb 20, 2008 5:39pm
Quoting aediaz1
Just hope it saved your from going long

Not too eager about my own trading day could have traded much more aggressively, buying and selling each time price touched S/R on 30min and 1h. Stick harder with my plan. It's days like this it really can pay of having excellent S/R. Ah well, can't complain.

Don't worry, tomorrow is a new day, new possibilities ! See you @ London start.

Good night.
PS: if you have some spare time could you make some drawings on a USD/JPY H1 (or maybe H4) chart, please? I've been evaluating this one for half an hour now but I'm totally lost. I can't find anything useful (maybe there isn't anything right now?) Thanks
  • #119
  • Edited 6:07pm Feb 20, 2008 5:49pm | Edited 6:07pm
Quoting MarkGavalda
PS: if you have some spare time could you make some drawings on a USD/JPY H1 (or maybe H4) chart, please? I've been evaluating this one for half an hour now but I'm totally lost. I can't find anything useful (maybe there isn't anything right now?) Thanks

Ok gimme some few mins

Looks like udsjpy have entered a nice bullish run, technically. Also, take notice how fib and earlier resistance, now support confirms a really strong support around 108. If this area fails to support, we could target lower part of this wedge. If it holds we could see a 30-35pip move to the upside. Not bad R/R eh ? 15 S/L and target 30, thats 1:2 R/R. Obs: Please don't take this as a trade call, only take it as education of the art of drawing
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy.gif Size: 35 KB
Measure twice, cut once
  • #120
  • Feb 20, 2008 6:06pm Feb 20, 2008 6:06pm
Quoting aediaz1
Ok gimme some few mins
yeahaa! i cant wait for this sometimes im seeing it breaking the resistance and now retesting it.

and if channel is drawn, looks like it is bounce off of the resistance.
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