I’m lifting a section of Dorsey’s website to explain how I use the 45 degree trend line.
Bullish Support Line.
Serves as a guide for the up trend of a stock. Has a habit of acting like a brick wall. Stocks will often come right down to the bullish support line and then bounce off.
Once [...]
I was stopped out of my 1st trade this morning (red 1). My risk was extremely small (5 cents). The second trade (light blue 2) did not allow me a low risk entry. I watched as oil continued to climb without me.
However, at 11:45 the QM printed a shooting star on heavy [...]
I’ve been experimenting with different ways to use the PnF charts. With this particular setup (5/22), you have a gap down on the 5′ chart. A common strategy is to wait for the gap to fill, and then go short. As you can see from the 5′ view, it never filled. [...]
I took a live trade with my PnF for Dummies idea.
CREE showed up on the NASDAQ’s Unusual Volume list. It pulled back to the 45 degree trendline. After breaking the trendline, it turned back up. That was a possible entry, but I missed it.
After another upward surge it consolidated for a bit. [...]
The Chairman highlighted CIEN today. Here is the PnF for Dummies setup. Is that 45 degree trendline magical or what? I cannot figure out what the significance can be behind this trendline on a stock that is running.
Trader-X had an interesting play with BIDU. It gapped down with the rest of the market, and rallied all day.
I’m not sure why, but when a stock (or futures contract) is trending, it bounces off the 45 degree trendline with amazing frequency.
I used a 10 cent box with a reversal setting of three.
The Chairman is posting dummy trades again, and I am going to embark on a little experiment. What I would like to do is take his dummy trade of the day, and display it on a point and figure chart. I think it may prove to be useful, but only time will tell.
For [...]