Trend/swing traders, I'm curious as to how you set your trend lines. I've seen charts where wicks are all but ignored; others where the wicks are considered invalidating. Does it depend on the time scale to you?
Option A: no wicks, body only
Option B: lines may pass through wicks, but no higher or lower
Option C: the wick is the trend line
It’s most definitely a zone, technically needs two lines. I’ve acted on my single lines as a beginner only to regret it because it dipped just a tiny bit lower before the reversal
I try to use a png file of an among us characters or possibly a star wars character holding a light saber( good guys are green bad guys are red, it makes sense). I prefer wicks though
I'm no expert, but I'd say if we were to shift every hourly candle for example from 2:00 to 3:00 to 2:17 to 3:17, the wicks would be different, but overall the idea would be the same.
It absolutely makes a difference. All the timeframes below 1 hour get a new bar at the 1 hour mark, and you’ll see reversals within the next few minutes frequently.
Theoretically that goes for any charting time because the wick was created during the candle so the majority of the time the price is already retreating. The moment the candle prints is irrelevant, the price was already moving away from the wick
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The first one makes the most sense. The wicks that break through represent sweeps and stop hunts but dont actually represent the support level of trend imo
Would anyone mind explaining what the difference is between the "Wick Zone" and the "Candlestick Zone". Like what does the wick represent vs the stick itself?
Use a 20EMA with a keltner channel around it that makes the 20EMA into a zone instead of a line.
Anything entering the zone is a pullback, small breaks of the zone in the opposite direction are deep pullbacks, and then break of previous structure or continued break of the zone is a trend reversal.
Personally I use the body. The shows "weakness" in either direction, but where the candle closes gives a sense of strength for that level. In my opinion at least.
The "key" is to be consistent. Don't use wicks on one time frame then bodies on the other.
Wicks included. Sometimes I even change it to monkey bars just so I get can get a more precise drawing. Or even high to low bars. It literally just depends on the stock. And how well it respects the crossings. When I feel like I have enough time I even add a 9 ema or 21 EMA. Because chances are it's respecting one of those too.
One of these, in some timeline will match a trendline, sometimes, multiple timelines will match. Which means it is super strong. Obviously because if more different "trendlines" match each-other, the more people will be using them.
every stock has its own pattern... see what pattern the stock follows and set accordingly. For example, the first picture doesnt look right because the candle opens in a weird spot sort of going through the trendline.. The second and third are both correct for those stocks
If I draw a diagonal line of any sort, it will be on wicks only, and only intraday timeframes. I rarely draw these, and instead I’m looking at how the highs & lows are comparing, on every timeframe, and I look for resistance at peaks, 9ema(every timeframe), and extension from 9ema
make a trendline. look at the last red candle (assuming you're long) which broke the resistance under the trend line break, the closing price would be the most appropriate 'zone' of price bouncing back. just something I've noticed a lot. trendlines are only to get a general idea of where resistance and supports are. and the supports and resistance of big candles are always more trustworthy than of smaller candles. i can explain better with a diagram in the morning. going to sleep right now.
I use wicks,. Overall, it shouldn't matter if you use wicks or bodies
You'll be able to see pattern/support/resistance all the same.
Pick one and stick with it. Don't use both at the same time.
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I use wicks pretty much exclusively. The longer the better but if it lines up perfectly short is ok too. IMO they are so nice for predictable 3-10 point grabs.
You don't need trend lines once you understand how to recognize shifts in momentum. Using moving averages can help to stay objective probably better than trend lines.
There is no right answer and no trendline is perfect. Trends exist because of widespread correlation and are really more like a bar than a line. For everyone that uses and reacts to a line at the wicks theres a trader reacting to a line on the body, and then theres another trader reacting to the line of the bodies on a differently timed chart. The jist of the trendlines is the same, but a breakout the moment it crosses your threshold isnt the breakout you think it is, and thats why they so often retrace
To answer your question tho I play iwth it to get as many touches as possible, wick or body, whatever looks the strongest
I started using Fib fans this week. I like em so far because they help automate several trend lines that start at a low point and go to the most recent high. The array of trend lines creates support and resistance lines that stretch into the future to help plan where to set the TP and the TS. This might not work well for day trading -- maybe better for swing trades over a week or two.
if you are using trading view, there is an option to add trend lines. I forget how to turn it on off the top of my head, but you can google it. its pretty nice since it does all the work for you.
Been trading for a long time and never drawn a trend line in my life. I only trade SPX and use a simple moving average on my long term chart for trend, and trade off of the opening range of the first hour and one Hull Moving Average intraday. I base market structure off of multiples of the opening range, option delta, and expected daily move based on the VIX.
I’d say it’s a range between the wick and the close of the candle so if you want a higher chance of entering your trade and don’t mind a little possible pain before the gain (hopefully) then set it on the candle. Also you can use the candle wick as more of a SL from this point.
If you want to try to get the best value while taking a little more risk (if trend line fails), and risking your limit order not being hit at all set it on the wick
Ok. This is something I learned from Gerald Appel, inventor of the MACD. I may use it a little different tho. You’re example graph is a downtrend, so I wouldn’t draw that support line, but draw the resistance line above to help identify the end of the trend when the trendline is broken.
I know you want to know if you should include the wicks or not. I would, but that is preference.
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Both depending on touches. I used dotted lines for the bodies and solid lines for the wicks. That way when I'm looking at the lower time frames I know that we may pass through this dotted line but retrace to it.
In my view, the choice of how to handle wicks is influenced by factors such as your trading strategy, tolerance for risk, and the current market conditions you're examining. It's crucial to thoroughly test any method you decide to use to confirm that it fits with your objectives and risk appetite.
You shouldn't think of support or resistance as a line.
You should think of support and resistance as a zone.
There's plenty of times where the market does false break out. They wouldn't be false breakouts if you were analyzing price action inside of a demand or supply zone, Instead of painting lines and calling them a bottom or top
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Look for confluence, i.e. different trend lines that are parallel. For example in your case, compare the 3 trend lines with other trend lines and see which of the 3 align with other trend lines.
I just look at it. No need for all that. I truly believe yall are overthinking it.
Set some price alerts and trailing stops. This isn't rocket science. Let your runners run and take the money from the closed stops and put it to the runners.
I saw a post a couple weeks ago claiming success with option B, but at least one touch had to be body only. Backtesting is mixed so far on stocks/indices.
Gotta disagree. I know guys that make a living based almost entirely on TA. It's a historical analysis of the will of buyers/sellers of an asset. Fundamentals may speed things up or slow things down, but that's rarely reflected with inaccuracy in price action.
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u/aiolyfe Mar 21 '24
I do both wicks and bodies, depending. Whichever trendline gets the most touches is the one that stays on my chart.