[Soultrader]

Trendlines are useful for support and resistance purposes as well as identifying a change in the trend. Different traders have different ways to draw trendlines. For example Victor Sperandeo, author of Trader Vic: Methods Of a Wall Street Master, uses the following rules:

- An uptrend line is drawn under prices, joining the lowest low to the highest pullback low which does not pass the line through prices in between. The line is then extended past the date of the highest high.

- A downtrend line is drawn above prices, joining the highest high to the lowest rally high which does not pass the line through prices in between. The line is then extended past the date of the lowest low.

One particular method I use in playing trendlines is to wait for the retracement once broken. For example, in a downtrend once price breaks the trendline I will wait until the next pullback using the trendline as support. Vice versa for an uptrend. There are other ways to time your entry once a trendline is broken. You can choose to use the TICK hook's or a Fibonacci retracement for an entry.

Remember, always use a stop.

See attachement for chart picture.

The chart shows a broken trendline, price retracement back to the trendline, and a lift for approximately 30 points.

[JEHs]

I was a little confused after reading Trader Vics book, (though I think I get it, it just seems poorly defined). He says to use the highest high, (in a down trend), and the highest hi before the lowest low without drawing through prices in between. In many cases this is not possible and in the examples he shows in the book, that is not what he is doing. It seems what he means is to start with the highest high before the lowest low in the trend and draw backward to the highest high that will allow the line to be drawing without drawing through price.
Here is a chart I marked up quickly this morning:

[JEHs]

Trendline trading....

[jackj]

I think this is a case of like those pictures, that can be seen as two different things (old and young lady) depending on how you look/read it. I read your quote from Vic, and what you say in your re-phrasing, as the same thing. Your confusion is when you think that Vic is saying that the second point of the TL, the highest high before the lowest low, is necessarily the second point. He isn't; it only is IF the line doesn't pass through other prices. If it does, then you don't use that high. That's why you say it's often not possible, and you're right; in that case, that then is not the second point that you use, you go to the one where it IS possible to avoid going through prices in between, as you do in your example. I probably just confused things more Anyway, you're right in your understanding of it, and that's all that matters.

[JEHs]

Yes, I have been playing with trendlines for many years and this is the conclusion I have come up with too.
I just thought it would be worth discussion because it seemed to be worded in that book in a somewhat confusing, (at least to my simple brain), way.

Trendlines, for me, are the most important things on my carts. More often than not, they keep me on the right side of the trade. And "more often than not" is all we can really hope for.

Thanks,
John H

[jess82]

then, trend lines are only used on long tf trades? Actually I’m just a scalper, do you think swing strategies may be useful? Checking some market trend lines it doesn’t appear as a good indicator supporting my decisions but I’ll really appreciate your opinions, I’m just fixing strategies. Jess

[annu]

Originally Posted by JEHs »

Yes, I have been playing with trendlines for many years and this is the conclusion I have come up with too.
I just thought it would be worth discussion because it seemed to be worded in that book in a somewhat confusing, (at least to my simple brain), way.

Trendlines, for me, are the most important things on my carts. More often than not, they keep me on the right side of the trade. And "more often than not" is all we can really hope for.

Thanks,
John H

hi
can you suggest me any good book for trendline learning or any link .
thank you

regards

[JEHs]

The book mentioned above by Trader Vic is here.

That book just has small but very important mention of trendlines.

Another that I have found to be good reading is here.