Trend Line Weighted Scoring System Example 1 (BAND)
SUMMARY
Simple example of how to use a system to score the validity of trend lines by assigning weighted scores to "Clean Touches" and "Near Touches".
DETAILS
The exact scoring system or weights you use is up to you, it's only important that you stay consistent in your scoring. One way to do this is to write up some clear rules for scoring; here's an example of rules for the published idea above:
-Center wicks or body-closes on or near trend lines in circles. If the circle is centered on the trend line, count it as a Clean Touch. If the circle is not centered but sill touches the trend line, count it as a Near Touch.
-Use the same size circle for all circles. Avoid zooming in or out on chart to avoid resizing of circles.
-Exact touches, either wick or body, are circled in blue and given 1 point.
-Near touches, either wick or body, are circled in orange and given 0.25 points.
APPLICATIONS
Can be used to choose which TF Trend Line may be best to observe/trade as well as choose between several assets' PA seemingly obeying trend lines.
For example, if 8TF Trend Line scores 10 and 12HTF scores 15, 12HTF may be better to trade off of. Similarly, if one asset's 1DTF Trend Line scores 10 and another asset's Trend Line scores 20, may be better to trade the latter asset's PA in relation to the Trend Line.
Simple example of how to use a system to score the validity of trend lines by assigning weighted scores to "Clean Touches" and "Near Touches".
DETAILS
The exact scoring system or weights you use is up to you, it's only important that you stay consistent in your scoring. One way to do this is to write up some clear rules for scoring; here's an example of rules for the published idea above:
-Center wicks or body-closes on or near trend lines in circles. If the circle is centered on the trend line, count it as a Clean Touch. If the circle is not centered but sill touches the trend line, count it as a Near Touch.
-Use the same size circle for all circles. Avoid zooming in or out on chart to avoid resizing of circles.
-Exact touches, either wick or body, are circled in blue and given 1 point.
-Near touches, either wick or body, are circled in orange and given 0.25 points.
APPLICATIONS
Can be used to choose which TF Trend Line may be best to observe/trade as well as choose between several assets' PA seemingly obeying trend lines.
For example, if 8TF Trend Line scores 10 and 12HTF scores 15, 12HTF may be better to trade off of. Similarly, if one asset's 1DTF Trend Line scores 10 and another asset's Trend Line scores 20, may be better to trade the latter asset's PA in relation to the Trend Line.
The utility of a scoring system for trend-lines (or S/R levels) such as this is that it can clue one into what trend-lines or levels "the market" (other traders) are using on their charts. Therefore, the higher scoring the trend-line or level, the more likely the market will respond to PA relative to the line or level.