Time to upset the trend lines crowd.
The wiser ones of the bunch though, may just get the information they’ve always needed but never got.
I’m going to break this down the same way I did on the video, which can be found here.
Why You Like Them
You probably won’t admit it, but I can guess really well why you trade with trend lines now.
These reasons were not your fault. But here we go…
1 – You Were Amazed By Trend Lines When You First Learned Them
Remember the first time you saw a stock chart or a Forex chart?
It was daunting. You barely understood it. And it most likely didn’t have any tools drawn on it, yet people on TV or online were opining about it like some kind of mad scholars.
Then YOU took the time to learn about how to read a chart, and found out that not only could it be fairly simple, but crazy lucrative!
Why so lucrative?
Because every time the instructor put up a trend line, or a Moving Average crossover, or an RSI indicator, price did exactly what it was supposed to do!
You were enthralled. We all were.
You then felt like you could tap into a way of reading charts that most people were unaware of, so you studied trend lines more.
You learned the pullback method, and how to combine them with other tools.
All the while, the people you now follow who also use them were showing example after example of how awesome they worked.
And you never once asked questions.
2 – You Never Asked Questions
And why would you?
You just wanted to believe. And you weren’t about to risk losing that loving feeling by shattering the dream.
But maybe you could have started with questions like these:
- Am I looking for a breakout or a reversal off the trend line you just showed? Don’t tell me after the fact, tell me now.
- Why don’t you show the same pair or the same time frame? I see different ones almost every time you show an example. Are you cherry-picking?
- On breakouts, you told me to wait for the pullback back off of the trend line before entering. The last example you showed didn’t do that, but you bragged about it anyway. What gives?
- Are your children still able to look you in the eye these days?
You could have gone a lot further with these Twitter/Website wonks, but you could have just started here.
But again, you wanted to believe.
And even though it hasn’t made you the Forex tycoon you imagined, you still hang on.
3 – Forex Twitter Strikes Again!
Websites and Twitter feeds love to be non-committal at first by posting pictures like this.
Then after it happens, they’re all too happy to show you the results, as if they knew all along.
No, they were not the same chart, I know that.
Look, finding technical analysis images you can legally use for your blog is tough, okay?
But you get the idea, and you’ve seen it all before. And they do the same with whatever junk tool they’re trying to promote.
And it gets you to become a trend line cultist and say dumb things in my YouTube comments section.
This leads into my next major point about trend lines…
They Have Nothing To Do With Where Price Is Going
If I could make this heading bigger, I would.
As seen in my comments section and emails:
“Trend lines DO move the market VP”
“Trend lines are what show a trend reversing, so we can trade that”
And I’ll I’m hearing this whole time is…
“It’s what plants crave! It’s got electrolytes!”
Some of you people just randomly parrot the first thing you hear somebody else say.
We’ve been over this plenty of times, beginning in the Big Banks video and blog.
Dumb money goes one way, Big Banks take price the other way.
And trend lines have absolutely fuck-all to do with this.
Do a lot of people use them? Yes.
Are those people all dumb money? Yes, all of them.
Well then why doesn’t this have an effect on the market?
Good question. One main answer.
Everybody Draws Trend Lines Differently
There is NO consistency when it comes to trend lines, because there is no one way you can draw them.
Therefore, you cannot say that this one particular spot is true support and/or resistance, because your spot is different from other people who are also using trend lines.
Seriously, no consistency whatsoever.
Do you simply use trend lines to connect the highs or the lows, like this?
Or do you connect the opens and closes, since you can better filter out the noise of the highs and lows that way?
Or do you do both, since it fits your narrative that way?
All three are very common. But now there’s a problem.
The inflection point, the point where you’re looking for price to bounce/breakout will be…..
….in a different spot based on which line you drew.
All of them are legit trend lines, but all of them will have a different decision point when it comes time to make a trade.
Same concept. Same currency pair. Same general area.
Completely different entry points.
Often dozens of pips away from each other.
And why stop there? Why not use trend lines that have been rendered completely laughable and useless in the past, keep them on your chart, and then try to use them again!!
Where exactly does the madness end?
I don’t like Support and Resistance lines much either, but at least they all end up drawn close to the same area.
Trend lines almost never do.
And as a result, you will never convince me or anyone paying real attention, that these random diagonal lines that can be drawn damn near anywhere on a chart you want depending on how you feel that day, have any bearing on whether or not price is going up or down.
Save that nonsense for somebody else.
If You Actually Are Having Success With These
There are two reasons why you are honestly having success with trend lines (assuming you’re being honest, and this is a big IF)…
1 – You’re Combining Them With Other Tools
Combining is almost always a good idea. Your success rate will go up.
But just hear me out here.
I mentioned in the Dirty Dozen Video how the most commonly used tools are outdated and often ridiculous.
But you use them, and you refuse to use anything else.
Do you still get your water from a well, and then swear by it?
Because this is what you’re doing when you use one or more of those tools, and refuse to even TRY anything else.
Even though there are thousands of options for you to choose, you took the first one somebody told you about.
Then you went all-in, never tried anything outside of the bubble you were placed in, and you wanna tell US that WE’RE doing it wrong?
I can’t even look at people like that.
Just do this — try testing out other tools on their own. Ones you’ve never head before. Easy google search.
I promise you you will find tools that have far better success than your inaccurate-ass trend lines if you keep at it.
Then, and go with me on this…..
Combine two or three SUCCESSFUL tools, and watch the magic unfold!
Too lazy? Too stubborn?
Fine with me. But don’t even try to convince me otherwise if you can’t even do this part.
Because now you’re this guy:
You can do better. And doing better means more money. So why not at least try?
2 – It’s not the trend lines.
I mentioned in the video for Trend Lines how they were no different than flipping coins, then I stated my case for this.
Here’s the thing about flipping coins however…
The head of my prop firm said it best (even though I don’t 100% agree, but there is some validity here) when he said “You could just flip a coin and go long or short, if you have the right money management, you’ll still come out ahead”.
And that’s what you guys are doing. You just don’t realize it.
Your money management skill is what’s getting you ahead, not the useless trend line.
Again, I offer you this…
You have the money management skill, which most people do not. Seek out a more accurate tool, because they DO exist.
Combine a better tool with your money management prowess, and watch everything go higher and higher over time.
There are a lot of egos in the Forex game, especially once you start having success. This will not be a popular switch to make.
But at a small price of a bit of ego, you really could do even better than you already are. At least try it. Demo it out with an unbiased eye, and see what happens.
You don’t have to thank me. Not publicly at least.
If you use trend lines, for the love of God stop. There are so many better ways, and you’re depriving yourself of money for no good reason.
If you are considering using them, avoid avoid avoid. They’re ridiculous.
If you are a staunch trend line defender, just know this…
Don’t get all mad at me because of my direct, no-nonsense approach that has no regard for your feelings or ego.
Just be glad SOMEBODY was out there to tell you the truth.
I want everyone to win in the end.
Even your dumb ass.