In this post, I have indicated how to correctly identify the touches of a trend line. you will hear many saying connect two points and the third should be the confirmation. While this happens and happened often in the past, the regular way of drawing a trend line is no more as effective as it was. market makers / movers know all bout these educational tips and do their best to manipulate price movement so it looks like what you have learned form textbooks or else where.
Im h=showing an example of the recent price movement of GOLD. If you browse the posts here on TV you will find most traders have drawn their trend line connecting the extreme points on chart, which is not advisable from my point of view. This is based on backtesting price movements of Gold specifically on multiple charts, " and I mean really a lot".
what I have concluded that, a trend line is rarely connecting two extreme points but rather the moving the average of all bars together. An interesting point indicating where then a trend line should start? if you look at the price of GOLD you will find a number of clearly visible bars that either has a long wick or a long body, diverging from the average movement of the rest of the candles before or after. Then you should ask yourself why this bar has stopped at this point in time? this is a very important bar that should not be ignored.
So look for these on any chart, and try to connect them instead of extreme points and you will see the difference.
ps. for barstate.isconfirmed another lesson will be added soon for pine scripters :)
if you like to my see my previous analysis of GOLD where I predicted gold to reverse where price is at currently, please check the links below
Im h=showing an example of the recent price movement of GOLD. If you browse the posts here on TV you will find most traders have drawn their trend line connecting the extreme points on chart, which is not advisable from my point of view. This is based on backtesting price movements of Gold specifically on multiple charts, " and I mean really a lot".
what I have concluded that, a trend line is rarely connecting two extreme points but rather the moving the average of all bars together. An interesting point indicating where then a trend line should start? if you look at the price of GOLD you will find a number of clearly visible bars that either has a long wick or a long body, diverging from the average movement of the rest of the candles before or after. Then you should ask yourself why this bar has stopped at this point in time? this is a very important bar that should not be ignored.
So look for these on any chart, and try to connect them instead of extreme points and you will see the difference.
ps. for barstate.isconfirmed another lesson will be added soon for pine scripters :)
if you like to my see my previous analysis of GOLD where I predicted gold to reverse where price is at currently, please check the links below
