weekend charting feb 6/7, page-134

Johno


I don't mean to sound accusatory. I apologize if I'm coming across that way, Im more or less intrigued.

Channels aren't trends as such in isolation. They can form part of a broad trend or they can correct a trend, as is potentially the case now with other down-sloping channels that can be seen in the market atm.


A down trending channel doesn't mean that a market or instrument is in a broad down trend. The best channels on a chart print when the market is in a corrective phase. In other words (and just reverse this for a broadly downtrending instrument. For example see the XAO on a daily chart start a trendline on 9/7/04 and draw it across the next high. Then put a parallel line underneath the low of 26/7/04 you can see the result.

You can also have downtrending corrective channels etc, etc. There is more to be said but Ill leave it at that.

With reference to targets I use a combination of many factors to arrive at targets. That said, a target is a price point at which I watch. "if x happens, then y is likely to happen after that. If it does then I will take z action". A level may also be referred to as support/resistance, or even as a target.

I also consider levels to be important for many different reasons. A level isn't necessarily a point/area at which a trader will take action. It is a point/area that a trader will pay close attention to, and then take action if action is required, see above . Knowing price structure and how price may react can also be looked at.

Once again there is no holy grail .Different traders will arrive at different levels based on their method of analysis. Trading's a personal thing. More to the point, TA is a personal thing. I don't know of two people who use TA extensively in their charting analysis/trading decisions based on a chart who do things the same way, or even similarly to a large extent (particularly the actual trade itself).

It's all about throwing hings on a chart and seeing what works for you, your style of trading and your risk mentality. Put things on there, strip it back and see what works.


Anyone who has been in the market long enough knows that definitive predictions are absolutely impossible and it's all about the balance of probability and risk management.

That said fundamental analysis should never be overlooked depending on your time frames and investment risk profile.

There is much more to be said about indicators such as MAs and the like perhaps this is not the time and place.

cheers