Diagonal Lines for Breakouts and Swing Points | Forex Factory

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Attachments: Diagonal Lines for Breakouts and Swing Points
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Diagonal Lines for Breakouts and Swing Points

  • #1
  • First Post: Sep 24, 2014 2:07pm Sep 24, 2014 2:07pm
Let's get into an area of importance.

How do you know where a price is gonna go? As I stated in another thread, that's a matter of the trader's interpretation.
But there is a tool, a successful tool might I add, that allows you to see where a price probably will go. Now if the gap is huge the reliability of this decreases substantially. When the space is close you can expect it to happen more times tan not. We won't cover the "when will it happen" part, just the "how to do it" part.

Let's discuss the diagonal trend line.
Everything easy was hard at first
  • #2
  • Sep 24, 2014 2:12pm Sep 24, 2014 2:12pm
Let's pretend price has soared and now it is pulling back for a breather. This process can take days or weeks.

Where do you put the first attachment point?

Look for the highest point (no brainer) and then pullbacks near the highest point.
Everything easy was hard at first
  • #3
  • Sep 24, 2014 2:20pm Sep 24, 2014 2:20pm
Point #1 will be subjective so you will have a few options initially.

Attachment point #2 will allow you to easily figure out future price targets for #3 (and beyond) trend line touches.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 10 KB
Everything easy was hard at first
  • #4
  • Sep 25, 2014 8:22pm Sep 25, 2014 8:22pm
Quoting ocd
Point #1 will be subjective so you will have a few options initially. Attachment point #2 will allow you to easily figure out future price targets for #3 (and beyond) trend line touches. {image}
That there is the only problem with diagonal lines: subjectivity.

As long as accuracy and line "touches" remain a concern for you (e.g. in questions as to what point to select as your Point #1), then subjectivity will make you second-guess yourself. Consider the fact that different brokers provide varying price history, i.e. different traders will see slightly different highs and lows depending on the brokers they use.

If accuracy is NOT a concern, and you're willing to allow ad hoc discretion then by all means go ahead with diagonals, in which case the only useful information from diagonals are the magnitude (for lack of a better word) of the slope and the direction of the slope, and not really the points on the line itself.

Just my two cents.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #5
  • Sep 28, 2014 10:48pm Sep 28, 2014 10:48pm
I just got back into town tonight and see my thread got moved.

Quoting skenobi
{quote} As long as accuracy and line "touches" remain a concern for you (e.g. in questions as to what point to select as your Point #1), then subjectivity will make you second-guess yourself.

Uhhh, no. Diagonal lines are either breached establishing a new trend or become a point of resistance. The starting points are either high points or pullbacks (in the examples provided) which then give assistance to trading decisions. Patience determines which points the major hitters are using for that particular move.

This thread was started for the rookies but moved to trading discussion which I can understand. The problem is that the majority of rookies are quite intimidated by all the information in the trading discussion section. Answers like the one quoted from create nothing more than confusion for new traders. I'm certain Skenobi didn't know what my intentions were so he answered correctly for this section.

Just trying to add a little more meat to the rookie section, sorry.
Everything easy was hard at first
  • #6
  • Last Post: Sep 28, 2014 11:23pm Sep 28, 2014 11:23pm
Quoting ocd
I just got back into town tonight and see my thread got moved. {quote} Uhhh, no. Diagonal lines are either breached establishing a new trend or become a point of resistance. The starting points are either high points or pullbacks (in the examples provided) which then give assistance to trading decisions. Patience determines which points the major hitters are using for that particular move.
Well, my main contention was that the "high points" and pullbacks will be different (although probably not too dissimilar) for different people due to the fact that different people use different brokers. So if everyone has different points of references (i.e. the "accuracy" question), then this could be a concern to rookies reading this.

And the kinds of rookies I'm talking about are the kinds who always asks irrelevant questions e.g. "how come your broker's high point is different from mine" etc etc

Quoting ocd
This thread was started for the rookies but moved to trading discussion which I can understand. The problem is that the majority of rookies are quite intimidated by all the information in the trading discussion section. Answers like the one quoted from create nothing more than confusion for new traders.

Actually, you're absolutely right. Perhaps I waded in without checking.. Altho perhaps you should also give the rookies more credit that a good portion of these (those who "matter") can actually understand deeper subject matter better than you think.

Quoting ocd
Just trying to add a little more meat to the rookie section, sorry.
No need to apologize!
I'm not trying to convince anyone. I'm not in the "convincing" business.
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