There are many traders out there who trade trend lines. Mastering trend lines is not easy as it seems, with experience things changes with your perception about Trend Lines. What I learned from my experience is that it is important to find a trend line, but it is more important to filter it so that, we can trade only the potential opportunities. Here I do not say that those trades which we filter out will not work or we efficiently filter out those less profitable trades, because adding a filter in your system not only filter trades which are unprofitable but also filter out profitable trades.
You have to accept that you are leaving better for best.
So, what are the check points I follow to filter out Trend Lines,
1) Touches, I prefer more than three touches and I strictly follow it. See what happens with two touch the number of trades increases too much; I am not saying trend line with two touches does not work but that trend line cannot be of higher profit potential than 3 or four touches.
2) Distance between touches, it is stated that if touches have equal distance between them the trend line is considered as a good Trend Line, but i do not strictly apply if the touches are places at enough spacing and the distance between then approximately equal that it is a good Trend Line. I do check distances but not strict on it.
3) Apply your own logic, this is a very subjective thing, person to person it will vary. Every trader looks the same setup differently, setups will only work when his psychology matches with those setups otherwise it will not work. Build your own logic.
At last, I want to end this post by a quote I have in my mind.
"True Knowledge cannot be taught, it can only be caught."
You have to accept that you are leaving better for best.
So, what are the check points I follow to filter out Trend Lines,
1) Touches, I prefer more than three touches and I strictly follow it. See what happens with two touch the number of trades increases too much; I am not saying trend line with two touches does not work but that trend line cannot be of higher profit potential than 3 or four touches.
2) Distance between touches, it is stated that if touches have equal distance between them the trend line is considered as a good Trend Line, but i do not strictly apply if the touches are places at enough spacing and the distance between then approximately equal that it is a good Trend Line. I do check distances but not strict on it.
3) Apply your own logic, this is a very subjective thing, person to person it will vary. Every trader looks the same setup differently, setups will only work when his psychology matches with those setups otherwise it will not work. Build your own logic.
At last, I want to end this post by a quote I have in my mind.
"True Knowledge cannot be taught, it can only be caught."
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