Mapping Your Voyage of Discovery - CQG.com

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Trend Lines and FibonacciThe need to create a framework around where your draw trend lines and what significanceyou place on them is a crucial part of your trading armoury. Even with the rules that I amgoing to give you, I personally only draw trend lines on historical data. There are manyreasons for doing this, such as the pitfalls set out below.• It is easy to get attached to trend lines and start drawing support and resistancelines based on what you want to happen, or more dangerously, to justify yourcurrent position.• Trend lines represent the maximum point in uncertainty. Will the line hold or fail?• Just because you think a trend line is important does not mean the market does.• If you find yourself redrawing lines that are shallower in angle you are probablyemotionally attached to your position and losing money, or have a pre-definedview of where the market should go.Therefore, to avoid these mistakes it is necessary to create some rules so that good habitsare established.• Begin with drawing lines on Daily’s and Weekly’s only.• Trend lines have little value on charts below 30 minutes.• Trend lines can only be broken on a closing basis, and you can wait for a two barclose if you so wish.• Resistance lines can only be drawn down (unless a channel line).• Support lines can only be drawn up (unless a channel line).I cannot overemphasise how important those last two points are. If the trend is down, Iwant to find points where the reaction to that trend is over. This means I can only draw aline that is in accordance with the trend.• Beware or drawing lines that are steep. It is highly likely they will be broken.• If a resistance line is broken, it can later become support and vice versa.
This leads us into the exact rules of how to build trend lines. The principle aim is to drawlines that others in the market are drawing as well. Crowd following trend lines can be verypowerful.• Trend lines can only be connected by two 5 bar Peak points.• Ideally no piece of data can come between them.• Initially only connect the most recent Peak points and then move further back.• Channel lines have the same rules.This set of rules means that the number of trend lines you can actually draw is limited. Insome cases, there may only be one line. This method is also very useful in identifying asideways trend. If you can draw supports and resistances from the most recent Peak points,the market is in a sideways pattern. This will often be true long before Momentumindicators are signalling so.The acid test on whether a line is subject to crowd following is its performance the first timeit visits it. Price must respect the line by holding it perfection or by emphatically reactingquickly on a break of the line.
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Page 12 and 13: Basic philosophiesIt is primarily u
Page 15 and 16: TFlow and Pre Trade AnalyticsTFlow
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Page 19 and 20: SmoothedSmoothed use a proprietary
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Page 23 and 24: What does Entry Signal Evaluator do
Page 25 and 26: Momentum IndicatorsThe vast majorit
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Page 30 and 31: This chart is half day of the Eurod
Page 34 and 35: PatternsIn many ways, patterns are
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Page 38 and 39: DOJI’SThis the only Candlestick p
Page 40 and 41: Analysis from the Profile Area Tool
Page 42 and 43: Intraday Doji’s can be qualified
Page 44 and 45: The top itself was a Shooting Star
Page 46: Fundamental Analysis.How to interpr

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