4xpipcounter's trendlines

[sanjosedesi]

No, but hindsight only proves it. The rule is TL's are drawn from the peak to the first swing high (in the last of a DOWN). Beyond that, others might be legitimate, but only hindsight would tell us that.

Let me be clear that TL's only usage is not the parameters as originally described in this thread, but within the context of why I started this thread there is only one usage for them.
Let me repeat. A high yield, low risk, high probability trade is made under the following criteria:
1. TL drawn from the peak/ dip to the swing high/ low.
2. Watch for break of the TL.
3. Once it is broken, it will continue in the direction of the new trend.
4. Afterward, it will correct anywhere from the point of break to the TL itself. That area is the point of entry.
5. The move will reverse from that point of entry to going deeper than the original break of the TL.

Paul, I will add a bit to your list from Tom Demark and that is about estimating how much can you make from such a trade.

See how far has the price moved away from the trend line made of high / swing high. If it moved 100 points for example, it is likely to move 100 points in the opposite direction ... give or take a few. After that it may consolidate and move further, or just reverse, or consolidate and reverse ... that you can not predict. This is just about what happens at point 5.

This is just a simplification of Demark, for more nuance read his section on price projections in his book on TA.

Paul your expert comments on whether you have seen this in action or not will be helpful.

 

[sunny_cool]

sanjosedesi I think you are telling the same thing

4. Afterward, it will correct anywhere from the point of break to the TL itself. That area is the point of entry.

Paul, I will add a bit to your list from Tom Demark and that is about estimating how much can you make from such a trade.

See how far has the price moved away from the trend line made of high / swing high. If it moved 100 points for example, it is likely to move 100 points in the opposite direction ... give or take a few. After that it may consolidate and move further, or just reverse, or consolidate and reverse ... that you can not predict. This is just about what happens at point 5.

This is just a simplification of Demark, for more nuance read his section on price projections in his book on TA.

Paul your expert comments on whether you have seen this in action or not will be helpful.

 

[sanjosedesi]

sanjosedesi I think you are telling the same thing

4. Afterward, it will correct anywhere from the point of break to the TL itself. That area is the point of entry.

No. What point 4 is saying is that once TL is broken, it may not immediately run off ... Price will come back and give you opportunity to enter.

What I am saying us that if the downwards distance from the TL was X points then the upwards break will also be in the range of X points.

 

[sanjosedesi]

Add ... Prices do not move in a straight line ... the swing away from the median. I am talking about the distance of the last downwards swing from the median to the first upwards swing from this median will be in the same ballpark.

It actually is more complex than that ... I am still grappling with it ... so go to Demark for more details.

 

[sunny_cool]

Yeah got your point that has been covered by Paul in this thread

 

[sanjosedesi]

Cool must go through the thread in full again. Thx.

 

[4xpipcounter]

If I understand Tom DeMark like I think I do, then the 100% move he is referring to is the distance from point d>e on my graph is equal to a>b. That is the rule. I've used the figure 61.8%, because it is a conservative figure and through my observations and personal trades, it has yielded the pips in the quickest amount of time.

A TL break has happened just about at a little more than half way through the 1st leg of a new trend. This means you have at least a little less than 2 1/2 legs to go in that trend, so when you look at it like that, then DeMark's number is a solid and safe number to go by. But then, there are questions that need to be asked:
1. Do I want to hold a trade that long through all the ups and downs?
2. What if the new trend has a premature end to it?

image upload

Paul, I will add a bit to your list from Tom Demark and that is about estimating how much can you make from such a trade.

See how far has the price moved away from the trend line made of high / swing high. If it moved 100 points for example, it is likely to move 100 points in the opposite direction ... give or take a few. After that it may consolidate and move further, or just reverse, or consolidate and reverse ... that you can not predict. This is just about what happens at point 5.

This is just a simplification of Demark, for more nuance read his section on price projections in his book on TA.

Paul your expert comments on whether you have seen this in action or not will be helpful.

 

[4xpipcounter]

I read this after my previous post.
The return or the correction to the TL has to at least equal the distance from the original TL break, because that is the minimum distance it has to correct to. Most likely it will correct further than that because the TL is containment.

No. What point 4 is saying is that once TL is broken, it may not immediately run off ... Price will come back and give you opportunity to enter.

What I am saying us that if the downwards distance from the TL was X points then the upwards break will also be in the range of X points.

 

[4xpipcounter]

I know TL's have some flexible uses to it, and I know we can talk for a longtime on the many other uses, and I would welcome that too.
The reason I started this thread was to show the very simple way to use TL's in their simplest form:
1. Watch for huge candle break of the TL.
2. Watch for correction back to the point of the break to the TL itself.
3. Find an entry, then ride your position past the swing point after the break of the TL.

After the first 2 points have lined up as per the rule. Number 3 yields lots of pips/points on the trade 85-90% of the time.

Something similar to what we have done with the ichimoku, you can give me a blank chart, you can post your observations, and then I can give the feedback.
Also, there is nothing wrong with finding an exception to the rule, even though you will have to dig deep. Post it, and we can discuss it too. After all, we need to know how to react when the exception happens.

 

[piyush.arora90]

Re: Nugget #1

just a clarification, so we're supposed to enter on the first retrace after the trend break?