How good are Trendlines?

The trendline is a very common way of western technical analysis and the basic for further PA analysis like chart patterns. Most beginners would say that it is subjective, but since most pros with much money use it, it is at least a self-fulfilling prophecy.

Draw the lines always manually. Take a Low and search a higher Low respectively a High and a lower High. The lines are no unbreakable lines, there are often wicks above or below and also false break outs occur. These are good signs that the market respects the line and to react accordingly. TL-indicators just connect two Highs or Lows that lay side by side what is absolutely wrong. Three points validate a trendline, so you can watch how the market behaves on that point and when the price possibly comes to the trendline back again later.

Surely, it needs some time of exercise, but it is totally worth it and later you'll see the lines with your eyes already. It helps you to identify other multi-trendline patterns like Channels, Pennants and other PA patterns like SHS, Double Bottom/Tops and even static Support/Resistance lines and zones and this edge you shouldn't miss.

Re: How good are Trendlines?

Krelian99 wrote:The trendline is a very common way of western technical analysis and the basic for further PA analysis like chart patterns.
You are more than right,now you can explain and teach us more proper way according to your years experience,i believes it help us form us traders strategy more in accurate way,waiting your worth analyses with illustration pictures,much appreciations for your current and future contributions.
Indicator is just a tool.

Use it only if it can benefit you. Leave it if you don't know how to use it optimally.

Re: How good are Trendlines?

Hey Krelian Tobi,

Many thanks for this good example, will do this also next trading week. What is the best TF for this ? H4? 
Will compare it with my 'moving' support-resistance indis, like Projection Bands and slow BBs.
Have a nice weekend !!!


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