How do you draw your trend lines?

trends

#1

I’m just curious…how do you guys like to draw your trend lines when hunting for patterns? Do you include the tails or ignore them?

Ignoring tails:

Including tails:

Sometimes, it’s really obvious there was a stop/loss hunt or artificial pump and I do more or less draw trend lines as those those didn’t happen when attempting to suss out a pattern. Other times, there’s nothing obvious happening like the example above, but the two wedges are quite a bit sharper convergence to apex. This got me wondering about what best practices are and other’s habits in this area.

Me personally, I work more often with bars than candlesticks, so tend to include the tails:

So tell me your habits with trendlines and reasoning!


#2

I like to use the candle bodies most of the time because it seems more accurate and gives breakout signals earlier. Kind of subjective when picking patterns as you will see in example i chose.

using wicks:

using wicks:

using candle bodies:

using wicks: Kinda looks like false breakout, signal not very clear

using candle bodies: Clear breakout with a back test


#3

Good examples, @Lance and exactly what I’m often struggling with when I’m trying to decide where exactly to draw the lines. It’s often clear as day, but other times, it can often go either way and can entirely fit the mood of the moment and it’s the wicks that can spell the difference.

One thing I’ve started doing is dropping down a timeframe and drawing the trend lines, then popping back up to the higher timeframe to analyze the overall trend. I’m trying to find a good example, but entire market appears to be nothing but bullish at the moment…(not a bad problem to have!)


#4

Good example from ZRX/BTC this morning where I’m ignoring a deeper than expected dip and also where I’m thinking the real wedge (dotted lines) isn’t the outermost wedge:


#5

Just remembered the chart that motivated me to ask the question about trend lines…

The original wedge I drew was the dotted lines. But had I drawn it where the solid lines are, which, ironically includes the wicks on top and excludes on bottom, would’ve identified the breakout point a lot more accurately. The dotted line wedge put the breakout a bit further away.


#6

I looked at zrx, this is what i would have come up with at the time. it still would have looked like a false break out though. It was definitely following a channel pattern that is obvious to me after it fell back down out of the wedge pattern. I probably would have just kept extending a channel out after wedge pattern failed. Its easier to find patterns after the fact though.Might have been a slight broadening wedge there once it found support after falling out of the first wedge pattern.

wedge:

Channel:

What i am seeing on 4hr zrx currently:


#7

Im a body only trend line kind of fella… I shall have to get one of my Steve Nison videos out and check how he draws 'em…


#8

Great thread, I’m stuck on this one atm. really interested in hear everyone’s opinions.
I also like bar charts so generally use the highs and lows but might try it with the close and see how it looks.


#9

Trend lines are an argument not a certainty and arguments strengthen or weaken based on evidence

I will use wicks that are confluent with candles around them and ignore anomalies as to not skew my data

This means take into account wicks if there are multiple eluding to the same trend together but ignore lone anomalies

However you must still use the lone wicks as arguments against your trend line thus reduce it’s significance

So more important than how you draw the lines, it’s the argument you attach to them

Hope that helps, let me know what you agree/disagree with