Trendline Trader Vic method

#1
Hello,

I am currently reading the "Trader Vic--Methods of a Wall Street Master" His method of drawing the trendline is pretty interesting but I have a some questions regarding it.

For an uptrend he says identify the two points,
1) Lowest low
2) Low before the highest high and
3) join them such that the line does not interesect any other point on the graph.

Now what if this is not possible? I mean he stresses on not having the line intersect any points. What if it is possible to draw a line such that it does not intersect any points but violates the second condition or maybe the first condition? Also, if all three conditions cannot be fulfilled simultaneously, how to draw the trendline?

In the attached graph of Balmer Lawri
Black line satisfies 1 & 3 but not 2
Red line satisfies 1 & 2 but not 3

Are there any other methods for drawing trendlines?

Thanks
Nihar Desai
 

Attachments

sh50

Active Member
#2
The third point is news to me. I have read in books that you can draw through three straight points to make it a valid trendline. One should go by grosss approximations instead of being precise; it is better to be vaguely right than to be exactly wrong.
 
#3
Dear Nahar15,
I saw the graph of yours in my perception i feel the black one is the correct line as i see the low is around 180 which is a major low before the highest high.
 
#5
Hello all,

Thank you for replying to my post. Neal, the post on "Identifying trends with trend lines" by TATrader is the same Trader Vic approach. Infact this was the reason why I asked this question on the forum. I believe Traderji and TATrader have studied this book since they have both mentioned it in their posts some time. I would be obliged to to hear comments from them.

Again, thank you all for your comments
Nihar
 

sudoku1

Well-Known Member
#7
Hello,

I am currently reading the "Trader Vic--Methods of a Wall Street Master" His method of drawing the trendline is pretty interesting but I have a some questions regarding it.

For an uptrend he says identify the two points,
1) Lowest low
2) Low before the highest high and
3) join them such that the line does not interesect any other point on the graph.

Now what if this is not possible? I mean he stresses on not having the line intersect any points. What if it is possible to draw a line such that it does not intersect any points but violates the second condition or maybe the first condition? Also, if all three conditions cannot be fulfilled simultaneously, how to draw the trendline?

In the attached graph of Balmer Lawri
Black line satisfies 1 & 3 but not 2
Red line satisfies 1 & 2 but not 3

Are there any other methods for drawing trendlines?

Thanks
Nihar Desai
http://www.amazon.com/Trader-Vic-Methods-Street-Master/dp/0471304972
 

Similar threads

Broker Special Offers

Intraday Higher Leverage

Save up to 90% in brokerage and get higher leverage for intraday trades.

Name:Phone:
Email:City:
State:
Are you a day trader?