So lately I have been looking for support and residence lines that create solid trend worthy channels. I am using NZD/USD 1d and AUD/JPY 4h. In these channels I found a small rising and falling wedge located in each channel.
NZD/USD
AUD/JPY
So my main question is should I use the wedges or channels?
Also should I tweak any of my support and resistance lines in the future?
Thanks,
Andrew
After some thought, I offer a very short answer and a longer one …
[I][U]Short answer[/U][/I]:
In your first chart I would watch the wedge for breakouts without huge confidence, and watch the channel with a little more trust and interest; in your second chart I would ignore the “wedge” and have as much/little interest/confidence in the channel as I would in the first chart. (Disclosure: I don’t trust diagonal trendlines as much, or have nearly as much interest in them, as some people here.)
[I][U]Longer answer[/U][/I]:
It very often interests me, in forums, “how/where people draw lines on charts”, though I rarely identify with their perspectives to a great extent.
In your first chart, I [U]completely[/U] understand where you’re coming from, how you’re looking at the chart, and why you’re asking what you’re asking. Hence my reply, above. Of the ten lines you’ve drawn on the chart, I would perhaps have drawn eight exactly as you’ve drawn them. (I wouldn’t have drawn the longer two of the three short, nearly-parallel, nearly-horizontal lines, and don’t quite understand them). This part of the “long answer” isn’t [I]much[/I] different from the very short one above.
On your second chart, apart from the obvious descending channel, which is perfectly clear, I don’t relate to or understand your other lines at all, and wouldn’t have drawn lines in those positions at all; so with this chart, I really don’t know where you’re coming from, what you’re looking at and what you’re asking, and can’t really help.
Let’s talk for a minute about the three shorter lines on the second chart …
I [I]just about[/I] see what you mean in the case of the descending one which starts at the top of the channel, but I offer you the observation that there were many other similar “potential lines” you could have drawn in, at earlier points, and I don’t attribute anything much to it at all.
The other two short lines on this chart, I don’t understand [I][U]at all[/U][/I]. Sorry. I don’t know what these are supposed to represent or why you’ve drawn them.
Of course, it’s possible that viewing your charts more clearly, on a bigger scale, might enlighten me, but from what I can see, I simply don’t “get it” at all. They seem to link the tops and bottoms of bars together, and cut clean through some other bars? What’s that all about? :33:
Hard to answer this, in the circumstances.
I’d say broadly speaking, not so much for the first chart, but I really don’t follow the second one at all. Sorry. (So maybe I’m saying “yes”, regarding that one?).
Not much help, overall, I dare say, but I thought I’d offer some sort of response since you asked yesterday and nobody else has posted yet. :8:
Hi Andrew.
I would trust your channels more as they have so much history. The wedges are short term and recently created by price so just look at them as squeeze points…like price is compressing and ready to explode somewhere. Have a strategy for how you deal with the breakout.
Your rising wedge in the first image is really serving as confirmation of the uptrend channel you identified. So Id be confident that price will reach that topmost circle. You need to now implement your method of getting onto this uptrend as efficiently as you can.
Definitely tweak your S/R zones. Lines are far too precision and you will be fiddling alot with your lines until you learn to have target zones or areas of interest. Makes life a lot easier trust me 
. No dont trust me, just take advice with a pinch of salt and prove it for yourself instead.
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