trendie
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Not trading today. Halloween. whhhooo-hhhoo-wwwwooooo. 
Have been looking at sup/res. or more precisely, zig-zag, and spikes. I dont know if I am fooling myself, but I can accept their truth.
But, why should trendlines work?
I mean, sup/res relates to price, so when people buy or sell at a certain price, then returns, there is a psychological aspect that a trades profit is about to be eroded or go negative. also, the idea that people who missed the boat on a move, look for bargains, so the idea that price rises to level "X" leave a psychological imprint on the mind that it is worth "X", so when it falls back, there is buying at a perceived discount.
Trendlines carry no sentiment, do they? The points that are joined together have no psychology value. I mean, if you buy at price "A", then you make money if price is above "A", and lose money if price falls below "A".
But, if you have held onto a stock, or FX, for "Z" days, you dont say your investment is worth "A" + "d", do you? (a kind of daily interest, if you will)
You dont say if price reaches "A" + "a" after "a" days, you have broken even.
but if price falls to "A" + "b" after "b" days, you will consider it break-even.
Arent trendlines just another indicator born out of spurious coincidence, in the same way others declare MACD or CCI are?
Am I thinking too much??
EDIT: better example. If you buy stock at £10, then in the future, if price rises to £15, you have made a profit.
But if it falls back to £10, you have broken even.
But, trendlines imply that if you held onto the stock for 20 days, you may consider its worth £12, but if you held onto it for 40 days, its worth £14.
Each of the points on the trendlines may be considered support, but the £12 or £14 bear no relation to the initial buy price of £10, and a sense of profit or loss.
Have been looking at sup/res. or more precisely, zig-zag, and spikes. I dont know if I am fooling myself, but I can accept their truth.
But, why should trendlines work?
I mean, sup/res relates to price, so when people buy or sell at a certain price, then returns, there is a psychological aspect that a trades profit is about to be eroded or go negative. also, the idea that people who missed the boat on a move, look for bargains, so the idea that price rises to level "X" leave a psychological imprint on the mind that it is worth "X", so when it falls back, there is buying at a perceived discount.
Trendlines carry no sentiment, do they? The points that are joined together have no psychology value. I mean, if you buy at price "A", then you make money if price is above "A", and lose money if price falls below "A".
But, if you have held onto a stock, or FX, for "Z" days, you dont say your investment is worth "A" + "d", do you? (a kind of daily interest, if you will)
You dont say if price reaches "A" + "a" after "a" days, you have broken even.
but if price falls to "A" + "b" after "b" days, you will consider it break-even.
Arent trendlines just another indicator born out of spurious coincidence, in the same way others declare MACD or CCI are?
Am I thinking too much??
EDIT: better example. If you buy stock at £10, then in the future, if price rises to £15, you have made a profit.
But if it falls back to £10, you have broken even.
But, trendlines imply that if you held onto the stock for 20 days, you may consider its worth £12, but if you held onto it for 40 days, its worth £14.
Each of the points on the trendlines may be considered support, but the £12 or £14 bear no relation to the initial buy price of £10, and a sense of profit or loss.
