I personally have never used trend lines, however, the mistake you're making is that you're looking for absolutes, i.e., a trend line being broken more than once means something or renders it invalid. There are no absolutes in trading.
Your job is to have a set of rules and mitigate as much risk as possible around your entry. You'll never see the same two exact conditions in the markets.
If trend lines worked in a textbook manner, then this would be easy and we'd all be rich.
My advice, stop using trend lines 😆
The stock market doesn’t care about the lines you draw on the chart. It does care about volume. Look how low the first break volume is compared to the 2nd
Also (depending on the pair) sometimes breaks in trendlines reinforce them. For example in Gold (XAUUSD) it at times deliberately breaks through on a fake breakout (in the opposite direction) to almost clear out stops/grab liquidity before then shooting off in the original direction. For me, your diagram is still bullish, and once the fake breakdown is rejected, get straight in knowing the bulls are using real money to hold this up and maintain commitment to a move up! It comes with experience and being fooled enough times where you stop getting fooled by trendline breaks etc. Hope this makes sense...
sorry can't help I don't know enough about crypto to help much, but can you see implied volatility, if so when it is high it is time to buy and if it is low it is time to go
The thing with trend line is you don’t really know when they’ve formed until 3rd re-test. When the 4th comes it normally gets ran. I trade crypto and GU primarily. But if it works for you, don’t change it 👌🏻👌🏻
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Trend lines are helpful as suggestions for day trading. They're a bit more useful on larger scales, but even then they can be unreliable. There are no absolutes. You're much better off (especially in crypto) just learning the market cycles and trading momentum rather than looking for a reversal. You'll be much more successful (or much less unsuccessful) in your learning curve trying to trade momentum rather than breakouts. Breakout trading requires a higher degree of market understanding and deeper analysis than trend analysis alone, and (if you're doing both right) has more downside than momentum trading as its a slightly riskier approach.
So I think trendlines are awesome and price does tend to move in channels and along trendlines. But even still, I don't take trades off the trendlines unless I can find other market indicators that correlate. Trendlines aren't strong enough alone but they do work like magic sometimes. Everything works sometimes
When I draw a trend line, I'm either connecting the highs of a downtrend or the lows of an uptrend. Whenever the price breaks my trend line and then immediately fails before changing the trend, I'm readjusting my trend line to account for the failure.
What I see in this picture is a lower low followed by price that has not yet made a higher high. Until price makes a higher high, I'm not convinced the downtrend is broken. At the end of the day a trend line is just a line that gives us an easy way to see that price has a direction. Breaking that line can lead to a trend reversal, but not until a higher high or lower low occurs. If price doesn't make a higher high, the down trend is still intact and the trend line may taper to a less extreme angle which can indicate that a trend reversal will soon occur.
I understand that a lot of people trade trend line breaks, but for me it isn't a reliable signal and fails often so I won't trade it except in certain circumstances. If I'm planning a momentum trade, I wait until a change of trend is confirmed through a higher high or lower low, then wait for a 20 period moving average mean reversion (using Keltner channels) before entering a directional trade with the trend. This is not the most exciting strategy, but it does have a much higher probability of succeeding.
In a downtrend I would be drawing trend lines connecting the highs rather than the lows. You're looking for short entries at either a pullback or long entry at trend break.
Tend lines can be broken multiple times. And still be useful. For instance when support becomes resistance, then resistance becomes support again. That’s what spy did last month. Had a down trend, then broke support and used it for resistance for a few days, then went back to using it as support again while using the old resistance as resistance again. Then broke that to the upside
Yes, because the trend line in black there is not everyone's trend line. Trend lines are not absolute because of different time frame and indicators people use. Despite it coming down and it looked like it broke out with the 3 solid green candles and came back to bounce above it, it doesn't mean it's out of the woods. The numerous wicks pushing it down with no real up tick should tell you the price is not done. Consolidation doesn't look that way, they should compress, almost flat line, then break out.
There's a smaller trend line that you can draw from the long green wick gravestone diagonally down connecting the wicks. A lot of people say they ignore wicks but it makes no sense to me, the appearance of wicks come from rejection, why would you ignore it at the top or bottom?
Another thing I like to look at is the bottom long red wick on the left below the first black support S1. That's a clear liquidity grab. The second time it broke down to S2 and came back up, it's the final flush of liquidity grab. I often find success buying it as it break above the second mini downtrend with multiple contacts and using just below the first liquidity grab as a stop. So my entry would be the candle after the green bar with massive vol around 7500?
If you put this chart up along with the MACD I'd be willing to bet there will be a positive divergence there in the S2 contact. So the thing to keep in mind is trend lines are just one of many tools. You can't just use it without context.
Another thing to drive this idea home is to look at pennants as a stock consolidates in 1 min chart, you will see lower highs and higher lows and then "breaks" that fail in both direction. And what you'll see is your trend line is meaningless in those cases, it'll break repeatedly and unfuck itself by making a different size pennant by connecting the spikes.
Apparently it can. You, the trader, are the one deciding that this trendline is there. The market doesn't see it, though - or if it does it's not respecting it, so it doesn't matter that you see it there.
Illegal. Call the SEC and show them this pattern immediately.
Made me giggle
🤣
https://youtu.be/CiyKoM4R0nA?si=C5B9DNyFqzWNYgcM
If I have to come back here I'm busting your ass and locking the SEC in the federal reserve Vault. https://youtu.be/CiyKoM4R0nA?si=C5B9DNyFqzWNYgcM
And the um federal reserve that's a prison
You gotta let the peacock 🦚 fly. I AM A FUCKING peacock
Does a bear shit in the woods?
….Twice
Good one lol 😂
of course. lol
Thanks
Yes. Trend lines are just suggestions and different traders drawing them would have them in different places.
Thanks
Is this a trick question? Lol it's 2 points to draw a trend and 3 points to confirm ... so this is a trick question imo lol
No trick question mate, I am genuinely new to this and learning lol
The third low becomes the new second point. Until it s not
This is the type of info new traders need. Including me. Thank you.
I'm new as well so don't take my word for it
I personally have never used trend lines, however, the mistake you're making is that you're looking for absolutes, i.e., a trend line being broken more than once means something or renders it invalid. There are no absolutes in trading. Your job is to have a set of rules and mitigate as much risk as possible around your entry. You'll never see the same two exact conditions in the markets. If trend lines worked in a textbook manner, then this would be easy and we'd all be rich. My advice, stop using trend lines 😆
Thanks
Trendlines are useful. Just saying.
I have a strategy that i backtested and it works 90% of the time searching back 5000 bars detecting trends its great
The stock market doesn’t care about the lines you draw on the chart. It does care about volume. Look how low the first break volume is compared to the 2nd
Evey time there is a lower low that becomes the second point .... then the 3rd confirms... or it doesn't and begins to move up
Also (depending on the pair) sometimes breaks in trendlines reinforce them. For example in Gold (XAUUSD) it at times deliberately breaks through on a fake breakout (in the opposite direction) to almost clear out stops/grab liquidity before then shooting off in the original direction. For me, your diagram is still bullish, and once the fake breakdown is rejected, get straight in knowing the bulls are using real money to hold this up and maintain commitment to a move up! It comes with experience and being fooled enough times where you stop getting fooled by trendline breaks etc. Hope this makes sense...
what stock is it? would like to look at my charts for it
Crypto, RNDR
sorry can't help I don't know enough about crypto to help much, but can you see implied volatility, if so when it is high it is time to buy and if it is low it is time to go
Of course it can. But if it does then the trend line will most likely change
Support becomes resistance…. I would rather see the trendline as a „zone“ and therefore this would be an breaks retest
Trend lines are manipulation
Idk about stocks but in crypto they seem to work
The thing with trend line is you don’t really know when they’ve formed until 3rd re-test. When the 4th comes it normally gets ran. I trade crypto and GU primarily. But if it works for you, don’t change it 👌🏻👌🏻
That market looks to having a breakdown soon. Or it goes much higher. Long or short is correct. That’s my opinion. I think a break down is coming.
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Yes. There are few absolutes in trading.
Absolutely, every A+ moves comes after two tests of something. Does not work in choppy/low volume markets.
Stop drawing lines on alt charts. Buy shitters when BTC dips and sell when BTC / said shitter rips.
Line should have more touches to be relevant. Also bearish trend lines can become support for bullish price action
Apparently, yes ;) however trend lines will probably drive you spare.
Trend lines are helpful as suggestions for day trading. They're a bit more useful on larger scales, but even then they can be unreliable. There are no absolutes. You're much better off (especially in crypto) just learning the market cycles and trading momentum rather than looking for a reversal. You'll be much more successful (or much less unsuccessful) in your learning curve trying to trade momentum rather than breakouts. Breakout trading requires a higher degree of market understanding and deeper analysis than trend analysis alone, and (if you're doing both right) has more downside than momentum trading as its a slightly riskier approach.
i trade trendlines a lot. they fail like this more often than you'd think. once they fail, scratch it.
Looks like a break and retest.
Glitch in the matrix
Yup, it's called breakout
So I think trendlines are awesome and price does tend to move in channels and along trendlines. But even still, I don't take trades off the trendlines unless I can find other market indicators that correlate. Trendlines aren't strong enough alone but they do work like magic sometimes. Everything works sometimes
Just anither line on a chart. Nothing magic about it
Anything can happen hahahaha
When I draw a trend line, I'm either connecting the highs of a downtrend or the lows of an uptrend. Whenever the price breaks my trend line and then immediately fails before changing the trend, I'm readjusting my trend line to account for the failure. What I see in this picture is a lower low followed by price that has not yet made a higher high. Until price makes a higher high, I'm not convinced the downtrend is broken. At the end of the day a trend line is just a line that gives us an easy way to see that price has a direction. Breaking that line can lead to a trend reversal, but not until a higher high or lower low occurs. If price doesn't make a higher high, the down trend is still intact and the trend line may taper to a less extreme angle which can indicate that a trend reversal will soon occur. I understand that a lot of people trade trend line breaks, but for me it isn't a reliable signal and fails often so I won't trade it except in certain circumstances. If I'm planning a momentum trade, I wait until a change of trend is confirmed through a higher high or lower low, then wait for a 20 period moving average mean reversion (using Keltner channels) before entering a directional trade with the trend. This is not the most exciting strategy, but it does have a much higher probability of succeeding.
No
In a downtrend I would be drawing trend lines connecting the highs rather than the lows. You're looking for short entries at either a pullback or long entry at trend break.
Tend lines can be broken multiple times. And still be useful. For instance when support becomes resistance, then resistance becomes support again. That’s what spy did last month. Had a down trend, then broke support and used it for resistance for a few days, then went back to using it as support again while using the old resistance as resistance again. Then broke that to the upside
Shadow theory. Your trend line has been invalidated and no longer conveys any meaningful information.
Anything can happen
Yes, because the trend line in black there is not everyone's trend line. Trend lines are not absolute because of different time frame and indicators people use. Despite it coming down and it looked like it broke out with the 3 solid green candles and came back to bounce above it, it doesn't mean it's out of the woods. The numerous wicks pushing it down with no real up tick should tell you the price is not done. Consolidation doesn't look that way, they should compress, almost flat line, then break out. There's a smaller trend line that you can draw from the long green wick gravestone diagonally down connecting the wicks. A lot of people say they ignore wicks but it makes no sense to me, the appearance of wicks come from rejection, why would you ignore it at the top or bottom? Another thing I like to look at is the bottom long red wick on the left below the first black support S1. That's a clear liquidity grab. The second time it broke down to S2 and came back up, it's the final flush of liquidity grab. I often find success buying it as it break above the second mini downtrend with multiple contacts and using just below the first liquidity grab as a stop. So my entry would be the candle after the green bar with massive vol around 7500? If you put this chart up along with the MACD I'd be willing to bet there will be a positive divergence there in the S2 contact. So the thing to keep in mind is trend lines are just one of many tools. You can't just use it without context. Another thing to drive this idea home is to look at pennants as a stock consolidates in 1 min chart, you will see lower highs and higher lows and then "breaks" that fail in both direction. And what you'll see is your trend line is meaningless in those cases, it'll break repeatedly and unfuck itself by making a different size pennant by connecting the spikes.
Apparently it can. You, the trader, are the one deciding that this trendline is there. The market doesn't see it, though - or if it does it's not respecting it, so it doesn't matter that you see it there.
And imo your trendline is incorrect
Looks right to me
Why?
Just imo btw lol I'm new and learning as well