Hi, what is more important when drawing trendline, do you draw them with the close or the highs or lows.
My normal practise is the close, using a line chart,
but I am looking at web page, and there talking about dollar yen, triangle theres a bearish brk below, but using the close as a giude to trendlines you can see a Channel (sideway) as at 11.00am uk time (dly)
Ok it’s still bearish, and we are talking Triangle or channel,
I understood that the close is most important ?
Traditionally, trend lines are drawn on highs and lows, not closes. The close is the price at an arbitrary point in time, while the highs and lows represent extremes. Up trends are patterns of rising highs and lows. Down trends are patterns of falling highs and lows.
Its a matter of choice. Some traders will ignore long tails at the extreme high and low and use the close price when drawing trendlines for the reason, those extremes of price were rejected therefore they consider them irrelevent.
My advice is try both and use whichever fits best.
So if you pull the trendline from the closes and you notice it doesnt quite follow the PA as well as you would like, and when you pull from the extreme high and low it follows the PA more accurately, in that case, use the high and low or vice versa.
Thanx I had an idea that it was just choice, I like the the closes, I feel there is more significance to the close, however there are times when using the extremes makes it fit better, however I must say most of the time the closes look dam good, it was interesting to see, the closes shown Channel, yet the H/L shown Triangle.
Again Thanx you all for your input.
I think I have attached the charts in question.
In answer to your other question I saw it as down I went short at 1.4150 last night, albeit the PA meandered back and forth over my position a couple times I held onto it and its looking somewhat better this morning.
edit: the main reason I held onto it was because I was watching the usdx at the same time, it was stuck a little below the 1.5900 level I decided that was holding things up so I waited to see if the usdx would break through and it did.
Short, fundamentals agree with your view, I will wait till I get some sort of signal, my signal software is dinging big move, in the hrly chart, which is normally over a 100pips, the strength of the currency isn’t telling me much either, right now I am falling on the short side, but I haven’t an entry yet.
In an exchange-traded market where there is a fixed close one can say there is significance. In forex, though, there is no exchange and thus no closing time. As such, closes are little more than arbitrary break points for charting purposes.
Well, you use it different, depends on the situation that occurs. Sometimes you have to take shadows into the consideration, sometimes not. It would be hard to discuss all the cases.
