Hello all! I have just realised this discrepancy on my chart
On the CadChf Chart, I have plotted a Trendline on the WEEKLY time frame (Picture 1). And it shows that price has Touched and Crossed the Trendline.
However, when I go down on the DAILY time frame (Picture 2), the Candlesticks/Price did not even touch the Trendline and it has a Huge space below that Trendline.
May i know what is the issue or problem here?
Yes it's a fact. What I did is to translate the points I used to calculate the Trendline equation in the origine timeframe into the equivalent points in the other scale...
A standard week has 7 days, yet a trading week has only 5 days. To
further complicate things, some brokers are aligned to the trading week
and others are not, as their time zones may be different causing a small
amount of trading on Sundays and/or Saturdays and on those that are
aligned, having trades only on Monday to Friday. Different Daylight savings dates between the different regions, further complicates things too.
cannot expect the trend-line to be accurate when converting from a
Weekly chart into a Daily chart because there is usually days missing that
would allow the chart to be stretched out properly.
Only if the daily
charts had all the days, including Sundays, Saturdays as well as any
days with no trading, would the trend-line match the weekly chart!
PS! Alternatively, in the case of a Weekly Chart that is exactly aligned with a perfect Monday to Friday trading week, without ever having any Sundays or Saturdays to complicate things, you would also be able to get an accurate trend-line, but only if no days are missing and Daylight savings dates are also aligned!
CAD/CHF can possibly have more discrepancies maybe due to trading days
missing during the middle of the week, depending on national holidays,
or other reasons. I would have to check as I don't trade on that pair on those time-frames myself.
Please remember that there is nothing to rectify here! You just have
to remember that you should use the appropriate chart that suits your
Trend-lines are just guide-lines. They are like "zones"
with a certain amount of tolerance. There is no exact "line" on which
price action may react on. That is just a fallacy.
Forum on trading, automated trading systems and testing trading strategies
Trend Lines and timeframes
Alain Verleyen, 2014.04.22 19:48
what does "The problem is you have a reference point for your
trendline in the future. Keep it in present/past and use Ray check box."
mean? You mean if i simply check the Ray check box i will resolve my problem?
What Alain is saying is that another possible cause (in the case that your chart is aligned and has no missing days), is when one of your anchor points for your trend-line is set at a future date.
For example if your ending trend-line is set on the date of the "Next Week", so that when you change to a daily chart, it might be several days in the future (such as over a week-end) thus skewing the trend-line. In this case, you should change the ending point to an existing day/week and enable the ray so that it would continue to extend forward.
Since your original graphs posted, don't show your two anchor points of the trend-line, we do not know if that is the case. Maybe you can post your charts again and show where the anchor points are at.
No i did not set to a future date. My anchor points are of past candlesticks.
Attached shows the properties of my Trendline on Weekly.
I assume i did it right?