Larry,
Got and started reading Trader Vic. Thanks for the recommendation. I have a question about how he draws trend lines and I'd like to hear your opinion.
Using SPY and starting with the March 03 low, would you use the early Aug low or the late Sep low to be the second point in the line? Would you draw the top line of his one two three at 105.71 or the last high. I don't know if you wait for a high to be confirmed or just use it to draw the second line.
Also, do you know where I can get practice drawing trend lines. I wish Vic had a work book with excersizes. I feel I need to practice a bunch.
Thanks,
Howard

Howard,

When you say the March 3 low, are you sure you don't mean the March 12 low?

As of now I would connect the March 12 low to the low in late September and the low in October. And since the trend line hasn't been violated, I don't see a 1-2-3 pattern yet. But if there were one you would use the last high before the trendline was broken.

If you subscribe to StockCharts.com you can practice with their charts. Also you could post your charts to the forum so I can take a look at what you're doing.

Sperandeo is pretty rigid with his trendline rules. I have found like all of technical analysis, it's more of an art than a science. For example, some draw tendlines connecting the daily lows and highs. Others draw them connecting only closing prices. I'm from the school of thought that says that you draw them where they make sense and where they capture most of the significant price action.

Larry

Larry,
Thanks. Sorry for the confusion, March 03 meant March 2003, but that was a little redundant wasn't it?
I don't see a 1-2-3 either, just asking for the future.
If I understand him right: If I were looking at the chart back in the early part of June I would have used the low in May as the second point. The trend would have been violated in late Jun making the June high the point for the second line. The July high would be the test/fail of the high and the August low would be the violation of the previous low.
Using his system would it have been reasonable to shell short in early Aug putting the stop at the late June high and sizing the position based on that risk?
And then when the market reached it's old high in late Aug we would change the trend line to use the early aug low as the second point. But we don't repeat the process because the new high in Oct invalidated the violation by breaking the second line drawn at the Sep high. Because of the new high in Oct we now draw the line to the Sep low.
I know this is probably an elementary question but I'm just starting looking at these technical elements in this rigorous way. Even though he's rigid, it's helping me. I've never really had a handle on it and his rigidity is helping me get my simple mind around it. I'm too new at this for the art.
Thanks,
Howard

Howard,

I’m at a disadvantage by not being able to see what you see on a chart. But if I understand you correctly it sounds like you’re doing it the right way. The only thing to do is to look at a lot of charts every day. After a while, you’ll be surprised at what you pick up.

Larry

Hi Larry,
I've been using stockcharts.com for several months now and I'm so glad. What an incredibly valuable resource it is.

I've been drawing trendlines like crazy but would like to be able to post my charts and I noticed that you said we can.

How exactly can we do this?

Thanks.
Jacques

Jacques,

I would love for people to post their charts on this forum. Here are the steps you take with StockCharts.com to do that…

1. Annotate your chart
2. Upload it and save it as a “static snapshot.”
3. Go to your list of snapshot charts and to the right of the chart one of your choices will be “Message Board Link.”
4. Copy and paste the link into this forum.

If you have any problems at all, let me know and I’ll walk you through it.

Larry

Hi Larry,

Here are the trendlines I see when I look at the chart for SPY. It doesn't start from the low in March 2003. What's your opinion?



A question I have about drawing trendlines is I noticed that the charts sometimes look quite different depending on whether I plot it with linear or log. So, which setting (linear or log) do you think is easier to use when trying to spot a trendline, or should it not matter?

Thanks.
Jacques

Larry,
I added the one that starts from March '03 low in pink.

Jacques

Jacques,

The pink tendline looks like it's exactly where I would draw it. I'm not sure what those two blue channel lines are telling you. In other words, I'm not sure why you drew them through all of that previous price action. What are you doing with that?

Is there a reason that you use both OBV and CMF? They pretty much are designed to measure the same thing.

Absolutely use log charts, not linear charts. Log uses percentages. Linear just measures dollar movements so they are distorted. Also, you probably need no more than six months of data. Or maybe use the "fill the chart" option. There's no reason to use candles if you can't see them.

I'm looking forward to seeing more charts now that you know how to post them. Good job.

Larry

Hi Larry,
I'm still learning about technical indicators so there's no particular reason why I have both OBV and CMF. Thanks for pointing that out. What indicators work well together for trying to find short term trading opportunities?

The channel lines are just something that I saw in the chart. I have no idea if they are significant, I guess only time will tell.

Thanks.
Jacques

Larry,
That pink line is exactly where I had mine. A question about uploading charts. Do I have to have the 19.95/month membership to do that? If not, how exactly do I save the chart as a static snapshot?
Howard

Jacques,

For example, Stochastics tells you about overbought and oversold levels, so it's good for looking for reversals. Whereas MACD is a good trend following indicator. So they compliment each other well.

But OBV and CMF are voth volume studies. You don't need them both. My suggestion is to read about indicators in StockCharts.com's "Chart School." Experiment with some of them until you find some you like. You don't need many. An indicator doesn't tell you anything that's not already on the chart. It can just make it easier to identify certian things. In the end, it's all about price and volume.

Larry

Howard,

I don't know what level of service you have to have to be able to "annotate" your charts. If you can, there will be a link to do that right under the chart. If you see the link, just follow the steps that I've listed above.

Larry

Larry,
I can annotate charts at the $9.95/mo level. At the $19.95/mo level I can save them. I've got a feeling I'll need the higher level to post them as I can't find the links you're describing. I like the service and am trying out my first month. Maybe I'll go higher, maybe not. Thanks for all your help with charting.
Howard

Howard,

I checked and you do need the "Extra" service to be able to follow the steps that I listed.

Larry