A trend-following strategy. - page 6
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You need points to draw a trend line, and you need points of flat extremes. Three trend lines: flat trend, regular trend and rebound trend.
We take points, for example a fractal. To draw a regular trend line, we need a flat breakdown signal.
In the picture: blue line - regular trend line, red line - flat trend, yellow line - breakout trend. The vertical lines show the end of the trend.
When drawing a line naturally the price after the second point must not touch the trend line. After, for a flat trend line this touching may be a signal of "widening of the flat trend line".
A rebound trend line is drawn on the basis of 2 points. If the third maximum or minimum point is found, it will be the flat's opposite extremum. If the opposite extremum is broken, the usual trend line will be drawn. And if the rebound signal at the second point is not confirmed, it is a breakdown signal that will be used to construct a regular trend line.
I'm back.
Here are your levels - the indicator drew
vspexp, Good question) In a trend behind a past (broken) flat, the price does not dive, but in a "trend flat" it does. Therefore, the trend starts after the breakdown of the flat, and the trend line of the flat is drawn without the breakdown of the flat.
But in the case of the blue line, the flat was shorter than the trend. We should measure the flat after the trend if the next trend becomes larger through this flat, i.e. the flat after the trend will be broken and the trend will continue. In this case the blue line has all the attention on breaking the flat after the trend.
I drew it wrong) The flat 1.3304-1.3192 is only in my mind.
vspexp, Good question) In a trend behind a previous (broken) flat, the price does not dive, but in a "trend flat" it does. Therefore, the trend starts after the breakout of the flat, and the trend line of the flat is drawn without breaking through the flat.
I don't understand what is a diving, what is a broken flat, how to draw a flat trend line with a breakdown of the flat... If I may, may I draw another, current layout? So far, it seems to me that all those yellow-blue-red trend lines of different trends are support/resistance levels. I find very interesting the question about the duration and predicting the values of a flat/break/trend - if you don't mind explaining it again.
the above message added.
"But in the case of the blue line, the flat was less than the trend. You should measure the flat after a trend if the next trend becomes larger through that flat, i.e. the flat after a trend will be broken and the trend will continue. In this case the blue line has all the attention to break the flat after the trend".
It means that after the flat breakout the price goes behind the extremum of the broken flat.
I don't understand - what is a dive, what is a broken flat, how to draw a trend line of a flat with a broken flat... can you post a different, current layout?
The blue line is a flat trend. The red and yellow are trends. The flat after the red and yellow showed a pullback, so price went slightly lower after the end of the trend. The red and yellow are working together, this is often the case with a trend. Red and yellow have no dive. In general, the "dive" is not the main factor, the main thing is a breakout flat signal.
The pink line is also a trend.
The answer to the question "what is a flat breakthrough" is in the methodology description at the link.
JLY:Aregular trendline requires a signal of a breakdown of a flat.
i.e., is it when the horizontal level of the last of the fractals located on the trend line of the flat will be broken (at bar closing or broken by a new fractal)?
Then a trend line is drawn to the North from below bars and to the South from above bars according to the outermost bar peaks.
.... is not perceived, it is necessary to decipher every word. If you see that it works, why not try real?
JLY:Aregular trendline requires a signal of a breakdown of a flat.
i.e. is it when the horizontal level of the last of the fractals located on the trend line of the flat will be broken (at bar closing or broken by a new fractal)?
Then a trend line is drawn to the North from below bars and to the South from above bars according to the outermost bar peaks.
.... is not perceived, it is necessary to decipher every word. If you see that it works, why not try real?
Have you read in the description on the first page what a flat breakdown is?)
Here is the scheme of a flat breakout. You should form a smaller flat that should be broken through. You should break through 3 flats. This is considered a breakdown.