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The Age Old Question

Ray (rjm354)
Nov 12 2012 at 07:26
posts 42
When drawing trend lines , wick or body ? Or sometimes both? Or the tips of the wick but through some other wicks?
Just curious of what traders are doing when they draw trend lines. I use Demark Trend Lines sometimes auto and they use the wick tips as you probably know. I find myself drawing trend lines freehand using a variety of ways on different pairs.

What do you do?

Thanks for the input.

James_Bond
Nov 13 2012 at 10:06
posts 556
That's a question that bothered me for a long time. I was using the body at first after which I've discovered I was losing many opportunities - using the body for trend-lines approach is more error prone simply because of the timezone difference from broker to broker; so creating a chart with one broker's feed may look completely different with a another broker's feed.

I've tried using the wick and discovered it is much more accurate as there are not many changes from broker to broker in terms of high/low values. To eliminate the minor discrepancy that still exist, I just use the area next to the trend-line (for example 10 pips) as a 'safe' zone as if the trend-line was breached.

Ray (rjm354)
Nov 14 2012 at 04:09
posts 42
Ah, Thanks James. Very helpful and no one has explained it like that.

jw1981
Nov 14 2012 at 12:18
posts 16
I agree with james. Using the wicks also helps in defining a better trend because it represents the high/low in a candle and thus enables you to find better support/resistance levels.

Gary Sharp myfxpt com
myfxpt
Nov 14 2012 at 21:09
posts 345
Trend lines join highs with highs, and lows with lows, so it makes sense to use the wicks since these represent highs and lows. The more important factor is making sure you work from 'Right to Left' on the chart, joining the nearest high/low with the previous nearest high/low.

Ray (rjm354)
Nov 15 2012 at 02:21
posts 42
Sean (Shr1k)
Dec 09 2012 at 04:58
posts 11
I use the wicks I leave the highest high or lowest low that is the swing high or low at the start of the trend off the trend line. I find that often that first swing or reversal is out of line with the trend I am looking at because it might be a stop hunt and is out of the range the market wants price to be in. By drawing my trend lines from the less extreme points the trend line is not as steep and I don't get as many false trend line breaks. I do miss a few entries that would have been good but I think caution is a more profitable practice for me. I draw my lines on 1hr and 15m charts zoomed out to view a few days worth of data. On longer charts that even out things like news releases and inter day stop hunts I would include the extreme swing candle.

Ray (rjm354)
Dec 09 2012 at 05:05
posts 42
Shr1k posted:
I use the wicks I leave the highest high or lowest low that is the swing high or low at the start of the trend off the trend line. I find that often that first swing or reversal is out of line with the trend I am looking at because it might be a stop hunt and is out of the range the market wants price to be in. By drawing my trend lines from the less extreme points the trend line is not as steep and I don't get as many false trend line breaks. I do miss a few entries that would have been good but I think caution is a more profitable practice for me. I draw my lines on 1hr and 15m charts zoomed out to view a few days worth of data. On longer charts that even out things like news releases and inter day stop hunts I would include the extreme swing candle.


Thanks SHr1k

Good Info

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