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I would just treat them as more of a technical indicator for tl break entries and last resort tl break for exits. I would not look at trendlines by themselves or any technical tool in isolation. I mean you can, they work, but you can also see where they don't work. I guess you can treat them as a pro for a trade with a strategy if there are channel lines. I wouldn't put too much weight on them. Check out a chart and count waves with measured moves. It's easy to get caught up on channel lines and trendlines and miss the other important stuff.
Volume has really dropped off the last 4 days. Looking back to August of last year we were running at about the same 10 day average we have now at 339,000. Last 4 days we have been around 250,000. Last year we were reaching the 10 day average volume on a regular basis. Is NQ looking for a rest from the long uphill climb? We shall see. Maybe the air is too thin and it will pass out and roll back down. LOL!
Thanks for all of the suggestions and info on using trend lines.
One other thing. Also, they are just a zone of support and resistance. Watch for tests of threes. The more it is tested, the more the validity, but after 3 or more it's likely to break too. I wouldn't approach trading specifically trying to trade trendlines, or channels for that matter, I have tried it. It's good to have knowledge of them though as a support and resistance level.
I think counting waves or lows is more important, with momentum, and the waves within waves. For a price action trader, that is more critical, in my opinion. When I am talking about counting, I'm not speaking of elliot.
Are you more interested in reversals or continuations?
Since I mostly use moving averages it takes a good bit of time before I can identify a change in direction. And sometimes by the time the moving averages react, a large chunk of the trend has already passed. Would be nice to pick those reversals earlier either by pure price action, candlestick patterns or a combination of things. Not looking to pick the exact top or bottom. That's why I was looking at trendlines. I haven't ran the numbers but at least in hindsight they appear to pick those reversals at a good place. What I haven't spent much time on is trying to apply trend lines in the heat of the moment so to speak.
Looking at this chart from earlier today:
This could be a double top or just a bounce off of the overnight high. Add a trend line like this:
And in this case it picks the end of the trend quite well:
I guess the "art" behind trend lines is in figuring out how much of a swing is significant enough to provide value in finding the line.
I haven't done any studying on waves or other methods. I have always just relied on the moving averages.
I think that's where multiple chart analysis comes into play. Are you only trading off one chart, the 500 tick?
For instance, how I trade is off the 200/500 tick looking to time on the 50 or 200 tick depending if the setup is on the 200 or 500 tick. 50 tick is just a entry/trade management, I also use the 200 for trade management. All time/tick/volume etc have the same setups, how I trade. Sometimes you are unable to see the measured moves or momo slowing if you are just looking at one chart. You can trade only the one chart, but your stop will be wider and you won't see any waves.
So essentially, find a setup on the lower tf and trade with your overall bias.
So in this case, there were two clear waves of selling to the bottom of the trading range before the sharp impulse move up, right? Was momentum stronger than average or about average, to me it looks about average compared to the 2 wave down, so if you missed that smaller strategy on the 200 tick, you would have been waiting for a measured move of that first impulse off the low(or trading strategy's between the trading range). Since the impulse on the second leg was stronger it was able to push up to the 138.2 level, it could have stopped, but it didn't put in that measured move yet too. The reversal down on the 500 tick was like a hs pattern.
So the important part here is not to sell or buy sharp momentum if you are trying to reverse, you want to wait for shifts like this.
Check out the correction, in the middle they are similar.
To get the big moves are great, but to get the 5-10 points is great too. Seems NQ most often has nice 5 point swings and it seems to be picking back up again, so think things are about to get good when the kiddo's are back in school.
Take a look and focus on two waves, and see what happens. Some times there are three waves, but mostly 2. On big trend days, watch out, that's where people get messed up,but to avoid look at higher time frame. Some folks might get 6k a contract, but what typically happens, range days.
Ahh what a day! LOL! Literally the same time my sell stop triggers both my monitors go black. Turns out my water pump on the liquid cooling loop crapped out and started leaking on the graphics card. Thank goodness I have a laptop. By the time I had it up and running and configured both my account and the TST Combine account were green. And that was after price had moved against me for a while. Maybe that is the secret for me. Start a trade and then turn off the monitors for a while.
TST Combine back into the green and day 3 completed. Personal account looking good as well.
Note to self, never buy a case where the water cooling pump is made into the heat sink on the cpu. Looks like a seal failed. It lasted about 2 years of nearly running continuously so can't complain there.
