Trend Lines Don't Work

I am starting this thread out of interest if anyone else has the same view as me... that trend lines don't work

I have over a while learned why trend lines do APPEAR to work 70-80% of the time.. but I have notice why they really don't.. and what is causing them to look like they work..

In any case I know everyones going to go "oh that newyear guys an idiot he doesn't think trend lines work" haha.. ok thats fine.. but I understand why they don't work.. I love seeing people using RSI when they don't understand why or how RSI works.. and same for every indicator.. here you go my friend.. its an indicator.. have fun using it when you don't know why or how its ploting (just an example)


Anyways I would love to see if anyone else out there sees the same things or if I'm the only crazy one



Well.. I am looking forward to seeing your responses


PS: I am mostly saying trend lines don't work because there is another reason all together why they appear to work.. in other words ploting a subjective line on a chart does not work but yes there is a reason it appears to work 80% throughout the line.. but then you need to redraw a new line to make it appear to work again ?

but most don't take the time to find out how or why things are appearing to be working.. if you did you could be drawing a much more accurate picture.. and know why when price breaks a "trend line" its doing it and such and could have foreseen it


maybe I'll post some charts latter to give more insight

Is the reason trend lines don't work because they way they are drawn is subjective?

I respectfully suggest that you read this post. You can apply the logic there to any TA tool.

As far as trading is concerned, nothing works 100% of the time...otherwise, we could all set up shop and trade the same pattern over and over again with extremely large leverage w/o any fear of loss. There has to be that possibility that something won't work in order to make markets operate efficiently. Some of my most effective trading strategies rely on failed Trend line resistance/support....it is all a matter of interpretation and experience. It takes experience to decipher between a fake breakout and a real breakout. If you don't know the difference, you will get crushed. Some traders & MMs get excited when they see a trend line fail under the right circumstances...it is not seen as a failure...it is seen as an opportunity.

Yup..anything individualistic is not going to work consistently. My trendline, my RSI, my fib etc wont work consistently.

Markets is a 'mass psychological game'. The only way to beat the market is to understand and learn about mass psychology/crowd psychology.

To grab and become fluent in mass psychology is a matter of at least 5 yrs hard work training neurons and synapses inside the brain.

If you combine trendlines with market flow, things will fall into place. You will understand then why some trendlines work better than others, it all comes with experience though.

Good post by that guy, Hanover.
It is true though TL's don't work like they used to, assuming you know how to draw TL's correctly.
Markets change and we have to adapt to these changes.
Lets assume the "smart money" know intermediate level traders, with only TA skills but no "feel" for the market, have learned to enter on the third touch of a TL, what do you think they'll do if they need the liquidity?
It is a very simplistic example, but you'll need to learn when it is to be faked and when it is going to be real, where are the most likely spots for either scenario to occur, and then of course know that you won't get it right all the time.

Actualy after reading your post more thoroughly i think you understand all of what i posted above quite well, so therefore i may not have answered your question.

Great thread Newyear. I've been seriously researching this subject as of late. Theres a thread on here from a ways back which someone asked WHY do trendlines work. PeterFM was the last to post and gave a good answer. I'm on my cell right now but I had found it with a google search.

So if trendlines even work 10% of the time then why? What are the actual mechanics behind it? Surely there can't be enough TA traders who can take a market and make it do a 180 at a specific pip..

Trendlines are found in 'random walk' charts too. Random walks derive from fully informative markets. Maybe that has something to do with it.

Lack of rules on identification, mixing drawing from closing-price and extreme, which doesn't work that well, is probably the main reason why it such a failure for many traders.

I will say that trendline identification is more of an art than a science. There are some trendlines that can only be identified by thinking outside the box....and studying the not so obvious types of trendlines...it takes a whole lot of practice and imagination. It becomes even more complex when you start talking about the impact of trendlines in higher/lower timeframes that you may not even be aware of and could easily blindside you. If you want to know why your daily trendline support was not taken out, you may have to drill down into the hourly timeframe or vice versa.

Hey guys,

So what I'm saying is they don't work.. trend lines don't work

now if you start asking why they appear to work there is an underlying reason why on some occasions you can see a trend line appearing to work

so I must not be drawing correct trend lines? hah.. ok whats a correct trend line my friend.. theres no official definition but ok.. I do draw trend lines as most do.. I have drawn them for many years..

In fact I will still draw them because I understand where they can be useful.. because I understand there underlying cause..

but if you start drawing a liner line throughout the market you will begin to wonder why it does not continue forever.. because applying a liner trend line is not going to happen my friend..

ok ok.. so what its a tool.. nothing works 100%.. umm.. well.. have fun with your tool.. again back to the tools your using that you do not understand why they work

look I'm not going to use a Philips screw driver unless I understand the reason, when and where I need to apply my Philips screw driver


But ok.. so many want to argue you do not need to know why it works to use it.. ahh.. have fun applying so many indicators to your wonderful system.. thats all I see when I glance on FF.. I laugh.. consider commenting.. know I will be banish by the majority for putting down there system and I do not wish to be rude.. I move on


I'm here in this thread to see if anyone else knows what trend lines underlying reasons are,


well heres my chart.. case and point.. not cherry picked and just to show a liner line is pointless

sure it works for a while.. but you guys must be so confused as to when its going to stop working and why..

and you don't even question why it is working!!

HERE IS THE SECRET TO MAKING MONEY... JUST USE THIS COMBINATION OF INDICATORS AND YOU WILL MAKE MILLIONS... "oh ok.. I will not consider why this combination of random indicators work.. I will follow it and make money.." (thats the 90% of trader mentality)

All a trend line is (whether drawn subjectively or not) is a visual representation of a pattern. Unfortunately most do not recognize the pattern until it is well established, and in this market that means it is too late to trade.

What exactly does it mean if price stays above or below a particular trend line? What exactly does it mean if price break a particular trend line?

Answer to both these questions is "nothing". Perhaps a price is indicating a change in pattern when it breaks a trend line, perhaps not.

Lets all keep in mind the market is made up of people and institutions who care very little to where you may have put a line on your chart. Like any other technical analysis tool, context is what matters. Trend line break coupled with a fundamental news announcement may be more significant in the short term. Likewise price staying within the confines of a trend line during a major geo-political event may also indicate a continuation of the pattern. It is this context that puts the technicals in better perspective, not the technicals in and of themselves.

Look.. so many things coming up about support and resistance.. and order flow.. ugh..

so now your telling me my trend lines don't work because of those reasons.. ok ok.. I understand


Actually order flow is a VERY VERY good topic as to why trend lines don't work .. BUT BUT BUT

I see so many talking orderflow in a really weird way.. people seem to have orderflow mixed up in some crazy definition.. I dont get how you guys are trading orderflow... so lets just forget this topic because its OVERFLOW of information..

the way I view orderflow.. is in a way where I would never use the words "order flow" because its such a cutesy term that misrepresents the main point..

so I would give you a HINT HINT.. more in the direction of "institutionalized trading"

and HINT HINT.. if you followed the way they were trading there money you would see why HINT HINT.. the trend line trail looks so glamorous at times


but to get into.. "well trend lines work you just don't understand they only work with more understanding of orderflow.. then you'll know why which trend lines work..."

Nooooo.. if you understood "order flow" then you would understand that trend lines need not be question if "is this a good trend line or a bad one" you would not even need to look at a trend line

etc etc etc

blah blah blah..

the reasons why I don't understand which trend lines work and which ones don't will keep coming.. but the point is.. they appear to work.. just like if I FLIP A COIN.. it would appear to work sometimes

I wouldn't say trendlines don't work. It's about making them work, incorporating it with individual's trading strategy. These lines do not show us anything, but it's us who finds out something out of it. It may not work for me or you but it may work for someone else.

If it would work for everyone the same way, when it's time to go long, everyone would go long and guess what, there would be no seller and it won't get into this statement further.

trend lines are kind of like a barrier,that needs to be passed,so we can see if its weak or strong ,and are we heading for a turn

with experience and tools it can be used if u know how to

Ok.. I understand.. more comments about how how trend lines don't necessarily not work.. its about knowing where and when not and how they are tools..

again back to using a Philips head screw driver when you don't understand why or how a Philips head screw driver works.




heres your trend lines.. have fun

Ok guys lets go.. draw a trend line will see whose right

If trend lines have any significance it is only because someone with a lot more money than you or a collection of people with a lot more money than you decide this is also the case.

But now its just like any other area of S/R: is it buy limits or stops? or sell limits or stops stacked on the line...? (the ones that matter that is). What is the big money thinking? That's anyone's guess... and if "they" were so predictable to use the same strategy at every trend line in the market then we wouldn't be having this conversation.

Trend lines work for those on the right side of them. Simple as that, weather the line had any significance on or not. So in the end its just another tool open to subjection and interpretation, but on its very own (just a line on your chart) its just another fancy way of flipping a coin

With all due respect, it's hard to determine if you're serious with the things you've written here, because it doesn't sound like the mindset of fx trader.

Trendlines - and channels - work. Nothing is 100%, but they have much validity. They provide excellent entry points, with tight SLs, and great risk-to-reward ratios. At the risk of missing something in my diatribe, it's best to start drawing them at a higher timeframe, and work one's way town to lower time frame charts. trading them is done in the direction of the respective chart's trend. I believe the accepted definition is that the line becomes valid after revisit and holding of the 3rd attempt (not necessaily even a touch, by my usage and experience) - it certainly doesn't have to last much longer after that, but if you take the right trade position, it's solely about the pips, and a decent exit, isn't it.

Frankly, I use them right down to a M1 chart, when I believe the end of a move is in. Different pairs behave and adhere to TLs in different ways and with varying degrees of success, and I would say their applicability and dependability has changed over the last year given the unusual (wolf) market we are in.

In fact, I would put forward that each of the charts you have posted has at least half a dozen valid entry points solely from the trendlines you have drawn.

Again, with respect, if you've been using and drawing them for years, I think there's some other mental blockage at play.

I find USDJPY is a great pair that has a great job of adhering to and obeying TLs and channels. I am able to scalp relatively successfully off this chart. The pips aren't always huge, partially because of my impatience, but also because I do not want to give back to the market, but one can average about 20 pips, with a 5-10 pip SL. If I am not feeling good about a trade, or, based on time of day, a play/counterplay might be underway, I will take my ten pips and run. With a decent size account, this can translate into some serious coin. The see saw nature of this pair (and other yen pairs) gives ample opportunity to reenter a needless exit, IMO.

Without droning on, I'll throw up my USDJPY chart (many TLs - valid & invalid - get removed as the chart paints), and a long term EURUSD chart - that latter pair has relatively good respect for TLs.

try using the (trend) cross of a 13 EMA and a 20 SMA. on one minute charts only, try using a 50 SMA, a 100 SMA, and a 200 SMA. for real adventure, use a 4-bar least squares with a 10-bar least squares. several years ago i wrote in FF about the magic of the bollinger bandwidth; readers in those days were too narrow minded. the BBW works very well in indicating the start of a trend; with the help of some MACDs ( and the aforementioned averages ) you'll know in what direction ( for a very brief period ) the market is going to move. the bad news is, you'll need an honest forex broker. good luck in doing that.

/s/ bfs