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Author Message  jeremym005 Member Username: jeremym005 Post Number: 3 Registered: 05-2007 Rating: N/A Votes: 0 Monday, May 28, 2007 - 11:56 am:     Sometimes when I draw trend lines, and also support and resistance lines the stocks will close either below or above the lines for maybe one or two days before resuming their normal price pattern, or the low or high of the day will be outside the lines. I have read that some times the lines can be violated and the lines themselves still be valid as trend lines. I have also read that some people refer to the support and resistance lines and "zones" and that it's ok for prices to move outside of them by a certain percent. Any words of wisdom on this subject would be appreciated. Thanks Jeremy  hershy Member Username: hershy Post Number: 2000 Registered: 10-2002 Rating: N/A Votes: 0 Monday, May 28, 2007 - 03:35 pm:     Draw your trend lines as usual then look at a line chart. You'll get quite a surprise ! Trade well and prosper. "The safest way to double your money is to fold it over and put it back in your pocket." http://members.optusnet.com.au/~hershy/  lylo Member Username: lylo Post Number: 15 Registered: 03-2007 Rating: N/A Votes: 0 Monday, May 28, 2007 - 07:38 pm:     isn't that because you draw your trend lines to the hi's and low's and a line chart is on open and close. .......cheers  hershy Member Username: hershy Post Number: 2001 Registered: 10-2002 Rating: N/A Votes: 0 Monday, May 28, 2007 - 08:13 pm:     Yes mate, but what did you see ? "The safest way to double your money is to fold it over and put it back in your pocket." http://members.optusnet.com.au/~hershy/  lylo Member Username: lylo Post Number: 16 Registered: 03-2007 Rating: N/A Votes: 0 Monday, May 28, 2007 - 08:53 pm:     I've been clicking candles on and off, but I must have missed it,seems as when the trend lines narrow the line chart is closer to the trend lines....and dats all! ...cheers  chart_rider Member Username: chart_rider Post Number: 214 Registered: 01-2005 Rating: N/A Votes: 0 Monday, May 28, 2007 - 09:24 pm:     lylo I think hershy's point is that for medium/long term trading frames, that the closing price holds certain significance. The actual drawing of the trend lines can touch a mixture of lows/highs and closing prices (which makes them easier to draw with candle charts). If the price closes outside the trend line, then a significant change has occurred in the price behavior. Be aware that drawing trend lines defines a trading strategy as much as it defines price action, ie. you must have pre-determined rules of action based on action around the price-line relationship. From this angle, they are good in providing definitive rules, unfortunately the actual drawing of the line is subjective and a fit can be made just about on any chart if that's what the mind wants, thus somewhat diminishing the trading strategy's disciplinary qualities CR  hershy Member Username: hershy Post Number: 2002 Registered: 10-2002 Rating: N/A Votes: 0 Saturday, June 02, 2007 - 06:52 am:     Sorry I took so long to respond. All I wanted to point out is that although it seems a contradiction. in my opinion line charts put a new tool in the short term trader's tool box. By virtue of a line chart being the X ray that shows the spine and not the fleshy covering, a different view is provided. Just as it is a good idea to refer to two time frames lately I have been also looking at line charts in the shorter time frame. I have not been keeping records and so I cannot substantiate this view but will give one example that I have discussed off forum with another member. I identified WME as a possible breakout subject by looking at the daily charts : The weekly did not show me anything to make more more enthused about the likely hood of success but the line chart showed a breakout and retest already in progress. Now compare the daily candles to a daily line a week later. Don't know about you but the line chart is showing me quite a support level not visible on the candle chart. BTW, this will be my pick for this week's competition - not that I do so well there. "The safest way to double your money is to fold it over and put it back in your pocket." http://members.optusnet.com.au/~hershy/  lylo Member Username: lylo Post Number: 17 Registered: 03-2007 Rating: N/A Votes: 0 Monday, June 04, 2007 - 10:54 am:     Thanks Hershy....I see where the line chart seems clearer and I have been switching to line charts to draw my trend lines then putting the candles back..... .........cheers

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