Charts used in training vs those in trading

Ever noticed the difference between the 2?

Like let's say you are learning a new trading system and it involves charts and somehow the lines draw align perfectly with price. Then the time period is usually some obescure time period say a few months or years ago on some little traded pair.


Then when you actually try to use the new system to test it out yourself on a real moving chart with live moving prices somehow you can never ever seem to find a price line that aligns perfectly like what is shown in the training chart.

Let me give an example. Say using fib retracement tool and from a site say babypips where they actually draw the price for you instead of actually finding real prices from real pairs. So in this site they will draw price that aligns perfectly with the retracement levels and then either shoots down or up.

When you attempt to do that yourself on an actual pair you find that price seldom hits the retracement lvls properly and this is just one example.

lesson nr 1 in charts. don't generalise for 100 trades. generalise for at least 1000 and for different charts.
besides that it's best when you put a question regarding charts to actually show what are you talking about.

I have been a sucker to this many this actually. When many perform analysis or try to teach you a concept such as trendline breakout or a wedge formation, they are using historical prices. they are using prices that have already formed and so drawing a trendline a series of fractal lows is very easy to do. this isn't so easy to do in real time. i was watching a webinar over on fxstreet by sam seiden, he brought up a very interesting concept about trend lines which i follow very closely now. the thing is, trend lines can be re-drawn so a breakout may not actually be a break out and a new trend line needs to be re-drawn as new price lows come out.

if you follow babypips and listen to their trend line breakout trading, you could be suckered in to many losing trades before you actually get one nice trend line breakout. this is because they probably just opened up their terminal, saw the existing trend formation and just drew it without taking into account that future price movements could change trend lines. i like to think of myself as a price action trader, but i do rely on a moving average mainly as another confirmation that there is truly a trend change. it's not perfect, but i've learned my lesson with not adapting to real time data.

I think you've to realise that these lines are zones. It's not as if if price closes one pip beyond the line it's "broken". Lots of balancing will take place in these zones, many traders executing trades etc. eventually one side will win out but it takes time and the larger the time frame, the more drawn out the process can be. So if price dips below an uptrend line and even closes below it, it can still react to it the next day and bounce to new highs from there because the trend line is still in effect. that's just how it is.

I would say to never trade the first break of the trendline on the daily chart, always wait for a consolidation after the break and trade the break of the consolidation trendline and even then your win rate will still be maybe about 50% with a stop, but the key is to go for large reward:risk ratio.

I learned my lesson. started out on babypips and followed it too closely to the books. i'm not talking about a 1 pip break out or anything, i'm talking about the need for them to be redrawn as they could be a part of a much bigger trend continuation. just one of the examples i'm using.