Chuck, Dick, Ricky, and Jack

Yes. But not of the TL, as some might think.

Could you perhaps elaborate on that statement some more? I'm assuming you are refering to the "principle of reciprocity", but aside from that, why can't a TL be tested from the other side?
 
Since TLs don't provide S/R, there's nothing to test.

That was the reply I expected to be honest... I'd understand if you don't want to go there again or if you think this thread isn't the best place to do so.

The main reason for my question is that I was re-reading Schabacker over the weekend and when talking about S/R he wrote "the line of support or resistance to price movement is a diagonal rather than a horizontal line"... and further down the line "we find that the old trend line still resists any movement of prices back through it."

Perhaps I should have used the word "throwback" instead of test. Either way, I don't want to discount the fact that TLs don't provide S/R - in fact I believe they don't - but regardless of that there seems to be some interesting action happening along the way.
 
The trendeline, however, is entirely at the discretion of the trader, like any other indicator. This "test" could just as easily have been of the swingpoint reached in November '06. That's something of a reach, but at least it's logical.
 
If trendlines do not provide s/r, why in the charts above does the price obtain 's/r' at the trendline?

If it looks like s/r, provides s/r and acts like s/r - is it not s/r?

Regards

bracke
 
It may look like S/R and act like S/R, but that doesn't necessarily mean that it provides S/R.

Pin a chart to the wall. Throw a strand of cooked spaghetti at it. Note all the places where price tests the spaghetti. Is the spaghetti providing S/R?
 
I suppose in some way this thread is also about S/R, so I'll include the supply line in the previous chart:
 

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It may look like S/R and act like S/R, but that doesn't necessarily mean that it provides S/R.

Pin a chart to the wall. Throw a strand of cooked spaghetti at it. Note all the places where price tests the spaghetti. Is the spaghetti providing S/R?

dbp

The spaghetti comparison is not valid.

If the price continues its movement after you have thrown your spaghetti at it what isthe probability that it will receive s/r when it next touches the spahetti?

On the other hand looking at the charts above what is the probability that the price will receive s/r at the trendline. Just count the number of times that the trendline provided s/r.

Regards

bracke
 
dbp

The spaghetti comparison is not valid.

If the price continues its movement after you have thrown your spaghetti at it what isthe probability that it will receive s/r when it next touches the spahetti?

About the same as the probability that it received S/R the last time.

On the other hand looking at the charts above what is the probability that the price will receive s/r at the trendline. Just count the number of times that the trendline provided s/r.

About the same number of times that you threw virgins into the volcano.

Regards

bracke

We've been through this several times before. If what you're doing works for you, great. But TLs don't provide S/R any more than any other line drawn by the chartist. If there were only one way to draw the line AND every trader on the planet drew the line in exactly that way, then there might be something to study. Otherwise . . .
 
On the other hand looking at the charts above what is the probability that the price will receive s/r at the trendline. Just count the number of times that the trendline provided s/r.

I'd have to agree with what I see and the trendline: price touches the TL several times. But that in itself might not be anything more than the author's way to establish trendline as a useful concept. On the other hand, what I think dbphoenix is trying to say is that the only "true" S/R can be found in price. Because price is the same for everyone, regardless of what lines we like to add or what we think we see in it. In the end, we will draw the trendline that fits best what the chart shows us, connecting the best points along the way => price = objective, trendlines = subjective.

Schabacker also wrote: "Perhaps this attempt to relate ordinary trend action to support and resistance phenomena is not founded on any true and fundamental connection between the two, except in the very broad sense that we should naturally expect resistance to develop against any great departure from a trend dictated by major, basic conditions."
 
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Note, however, his choice of "very broad" and "great departure". "Trend" does not automatically mean "trendline". If one is concerned about great departures from the trend, he is most likely talking about the mean and the tendency of price to revert to the mean (which itself is ever-changing). This is why I suggested in my book (How to Double Your Money Every Week) that one use regression lines (the line pictured is an approximation). At the very least, this avoids all the irrelevant discussion about "touching".

Trendlines are meant to show trend, as are moving averages. That's it. With regression lines, all three are tools, but if one is going to get the most out of them, he has to use them appropriately. Trendlines do a good job of spotlighting potentially serious departures from the mean and possible important changes in the mean itself. But S&R are provided as a result of price levels created by supply and demend, not by price "touching" a homemade line.
 

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It's brand new. It's leather-bound and costs $5000. Plus postage.

(It's dedicated to Elite Trader . . . )
 
"But S&R are provided as a result of price levels created by supply and demend, not by price "touching" a homemade line."

I think that the above is splitting hairs.

I totally agree about supply and demand.

When a trader decides to take a trade based on trendline s/r he is not thinking much about the price he is looking at the reaction of price to the line. If enough traders are using trend in this manner the supply and demand will react to it and become self-fulfilling.

The fact that so often the trendline is the turning point for a price must surely be proof that s/r is provided by the trend as much, if not more so, than it is provuded by the price.

Regards

bracke
 
I've just bought a set of seats out of an old Jag on ebay. They will arrive on Wednesday and I'll have a stack of fakes knocked up by the end of the week. Quite happy to sell them as a job lot if anybody wants them. Can't be arsed with the marketing myself.
 
"But S&R are provided as a result of price levels created by supply and demend, not by price "touching" a homemade line."

I think that the above is splitting hairs.

No, it's the core of what is meant by support and resistance.

I totally agree about supply and demand.

When a trader decides to take a trade based on trendline s/r he is not thinking much about the price he is looking at the reaction of price to the line. If enough traders are using trend in this manner the supply and demand will react to it and become self-fulfilling.

The same could be said of dozens of other lines, but they don't provide S/R either.

The fact that so often the trendline is the turning point for a price must surely be proof that s/r is provided by the trend as much, if not more so, than it is provuded by the price.

Sorry, no. But since this "debate" with you has gone on for, what, several years now, and you still don't understand what i'm talking about with regard to support and resistance or trend, I suggest we drop the subject. This thread is, after all, not about what trendlines provide or don't provide. If you want to start a new thread about trendlines, please don't hesitate to do so.

Db
 
Transports

Db,
Would Chuck, Dick, Ricky and Jack not be looking at them(Transports) to find s/r first?
erie
 
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