emehoke

Deeper look at trendlines: Dangling stuff.

Education
CME_MINI:NQM2021   E-MINI NASDAQ-100 FUTURES (JUN 2021)
In this post I am taking a deeper look at trendlines with the intention of making better informed decisions on whether to invalidate it or not. The biggest naturally occurring question mark is in reference to "dangling stuff", and how as long as price is still making a higher low then we say that the trendline remains valid.

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Bonus for the very deep divers:

If you are highly detail oriented (good on you) then you will notice that this entire price action occurs in what is referred to as the globex session, or the overnight session to New York traders. During the overnight session there is much lower volume , therefore, many traders don't consider any structural formations made during this time as important to their predictions. Also, buying power is reduced compared to New York hours. Whatever other purpose this serves it effectively stops me from screaming in and out with 6 contracts at a time.

I don't understand why one would reject perfectly good data the chart is offering. I do understand the need to halt one's analysis somewhere, but if anyone is telling you the overnight structure doesn't matter consider that they are likely not trading trendlines .

I understand if you are trying to capture institutional order waves then it's probably a good idea to trade when the institutions are trading. Still, to trade as though the overnight session data doesn't exist is executive oversight in my non-emotionally charged opinion.

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