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Chapter 8, Part II. Trend Lines Page 5

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Tom DeMark has made an excellent work with building a trend lines. He said that you may choose the time level of trend line by yourself. He draws trends by extreme points - uses low prices for uptrend and highs for downtrend. Then he determines how much bars with higher lows to the left and right sides from current local bar low that we have chosen as a point for trend line. The shortest lines have only 1-3 bars to the right and to the left with higher lows. If, for example, current particular low is absolute low for 50-100 bars to the left as to the right – this is long-term trend line, because points that are used for its building are long-term absolute extremes. Look at last color chart again. See – points that are chosen for long-term uptrend building are absolute extreme lows for a long time. Each point is absolute low at least for 3 years (about 200 bars from each side on weekly chart!) to the right and to the left. The short red line that you have chosen has just about 10-20 bars from each point that is used for drawing the line, so it’s much shorter-term.

    Pipruit: Ok, I understand, so I have to draw trend lines from the tails and strictly use extreme points, not close price for their drawing?​

    Commander in Pips: No, you don’t have to. This is just one method. You must do only one thing - try and experiment with different approaches. You should use the way that will give you acceptable results. I just give you different possibilities that are used on the market by different traders. Also I give you some tools, that should help to make this process as mechanical as possible – The Tomas DeMark way of building trend lines is just one of them. But who knows which approach will work better? You should investigate this by yourself. This is a part of trader’s routine.

    Pipruit: I see. Something else, Commander?​
     
    #1 Sive Morten, Dec 15, 2013
    Lasted edited by : Feb 12, 2016
    Hamza Samiullah and fran alvarez like this.
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