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Trends and Tripwires, by Bill Wormald, dominant trend angles
spartz
post Posted: Aug 31 2006, 06:11 PM
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In reply to: colaiscute on Thursday 31/08/06 06:25am


Hi Cola, well you're more confident than me! I've just started trying to apply the theory to practise and have no idea if I'm going about right or not.

I like to look for breakouts on the weekly chart. So using the idea of recurring angles, I'm connecting the major peaks to the high point of the possible breakout candle. If I can parallel that line and it fits a whole lot of other troughs and peaks then I suspect that it's not a true breakout but just a high point within a long-term channel. If, however, it just doesn't seem to fit and I can find a better angle that the candle is breaking then I can say it probably is a real breakout and to have a closer look at the stock. Well, that's how I'm trying to use the theory for now, we'll see if t works or not as time goes on.

The other useful thing I got out of it was with the dominant rising and falling angles. Once I've identified what I think is really a breakout, then I look at how quickly the stock seems to go up. Some stocks increase very rapidly in price again and again (steep rising angles) so obviously I will get a faster return for my money picking one of these stocks.

I guess I'm not being to picky about calcualting exact angles etc, but just using the repetitiveness concept to see the chart in a new way with trend lines that I might not otherwise have seen. I also don't think that there's too much point in being perfectly exact with greenchips and specs.

Spartz.

 
colaiscute
post Posted: Aug 31 2006, 02:25 PM
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I definitely agree this book has merits... its just not for me. I love trend lines, but I still find this book hard to grasp. I am confident it works in theory and practise, but I just prefer to stick with my basic trendlines and breakout patterns.

Unless you have charting software that supports calculating trend lines on certain angles, the whole concept isn't very useful. Do you agree?


I loved looking at the pictures, but the text was a bit long winded.

Great for people who love going deeply into formulas and technical concepts, but if I cant apply it every day very quickly and cleanly, im not too interested in it.

I think my basic undertanding of trend lines is enough for me.

still glad I bought this book, but its back to the library for it to gather dust (maybe Ill find someone to give it to....)

Cheers :-)
Cola



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colaiscute
 
spartz
post Posted: Aug 18 2006, 09:34 PM
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I recently purchased and read this book. My impressions:

This is an important book. I want to make that quite plain despite the difficulties I had understanding some of its application. The author has made some simple but profound observations about recurring trend angles in stocks and indices. Well, der, one might think. Most people know about channels, resistance and support. But this is more than this. Month and month, year after year, stocks display their "personality" again and again through dominant trend angles. And when a number of these trends collide you have a "high energy" scenario that will usually send the stock sharply up or down (at a recurring angle).

Last week I watched as MCR bounced off a recurring bear angle and with my new-found knowledge read with amusement the howls of "why the fall?" at "another site". I was not surprised to see AOE pick up this week either – it had just bounced off a "high energy" convergence of supporting lines. Some of these lines have their origins at least two years earlier.

The mysteries of these recurring angles reminds me somewhat of the mysteries of Fibonacci and the Golden Ratio. This approach also seems to work in the market for many people, particularly in highly liquid stocks. Though, like Fibonacci, I can't help wondering if it is a matter of self-fulfilling prophecy. But then, who cares, if it makes you money.

The book is very well written. As a sometime English editor I could not fault the language and style. However, I have major misgivings about the organisation of the book and the clarity of the explanations. It was quite frustrating to continually read in the early chapters about how important the "spine" of a stock is (i.e., the long-term trend or axis) but then not be given an explanation of how to determine such a spine until Chapter 6. And once reading this chapter, I wanted nothing more than for Bill Wormald to sit next to me and guide me as I tried to work it out for myself using my current stocks of interest.

This is a major frustration with this book. I feel the author really is onto something and despite the uncertainty I felt when I tried to apply his observations to my own stocks, I could work out enough to see the angles and channels – again and again. It think that this approach to the stock market can only be communicated to a very limited extent by a book and its examples. What is really needed is a course in which the student is shown how to do it. The examples all have their lines drawn in after the fact, and it is not always clear how they were derived or the thought processes that the author used to determine the angles.

I really liked that the book was an Australian book with predominately Australian examples. I didn't like that it sometimes read like an advertisement for EzyChart, though I appreciate that that is what the author uses. He also takes great care to ensure that anybody else using this program can easily follow his settings. I am also frustrated with his web site. He states in the book that he will update the dominant angles for various Australian stocks but all I can find is some advertisements for his books and a members' log-in without any information on how to become a member.

The author writes that the novice trader should read this book and other share trading books to become as knowledgeable as possible before entering the market. This is a fine ideal, but in reality I think the content matter of this book is too difficult for the novice trader. It is important information, but it is at intermediate level, unless of course one is extremely bright. It often reminded me of my old university lectures where the lecturer would assume prior knowledge of the subject matter and cover the basic concept in the first 5 minutes and spend the next 40 minutes talking about the finer points.

In conclusion: If you are smart, have mastered the basics and have a thirst for knowledge, this book could well take you to the next level in your trading – assuming you can master its application. At the very least, this is an important trading concept to at least know about.

Spartz

PS. One more thing: the author states quite clearly, in practically every chapter, that he is using a horizontal axis of 750 days with a 10% extension (blank space at the right of the chart).


 
spot
post Posted: Jul 24 2006, 10:44 PM
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In reply to: wolverine on Monday 24/07/06 08:26pm

thanks wolv.. obviously confused .. must be drinking a rougher drop than you.

by the way .. who is that woman on the bike?

not your mother, is it?

 
wolverine
post Posted: Jul 24 2006, 08:56 PM
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In reply to: spot on Monday 24/07/06 05:00pm

i think there was some reference to the scale of charts spot with regards to x and y axes. however, i think it was very brief (from mid term memory).

the same laziness that leads me to sitting here on the lounge with a glass of mclaren vale cleanskin (sus) shiraz is the same laziness that makes me

a. not bother to spend too long trying to apply his techniques

&

b. not get up and go the office and give you the page references to axis scale



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TOO MANY CHIEFS

NOT ENOUGH INDIANS
 
spot
post Posted: Jul 24 2006, 05:00 PM
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from memory ... looking at a daily chart ...

on the daily chart .. one gradation of the x-axis corresponds to one day. i cannot remember the author defining what amount of price an equal gradation on the y-axis corresponds to.

different charts have different price scaling of the y-axis.

to talk about specific angles, without standardizing the relationship of equal gradations of the axes first, is mathematical nonsense.

sorry. i do not recommend this book.

 


cso1
post Posted: Jul 24 2006, 03:36 PM
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I haven't read the book, but I've seen a few reviews over the years and read some posts by the author on another forum some years ago. Any competent technician will tell you the general concept is not rocket science. However, making sense of the book and drawing precise enough charts may well be. The usefulness is questionable.

The gist I gather is this:

- Over the longer term, any given stock or index tends to rise and fall at rates or angles which are often determined in the first months of listing. If a stock rises at 11 degrees for a few months and then collapses, it will often start rising again at 11 degrees.

- Such up trends and down trends can run into horizontal support and resistance lines, thus "tripping" them up.

- There are quite a few dominant angles in the market, but these change over time, so you should check the author's web site every now and again for what the latest batch is.

 
colaiscute
post Posted: Jul 24 2006, 02:14 PM
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It would be so great to have a member who has read T&TW to summarise some of the gold nuggets they took from this book, in simple language.

I did find it a little too mathematical... but this doesn't mean its not hugely valuable, dont you agree?

There is a T&TW2 sequel which may explain it all better.


It seemed really exciting, just had problems getting it through my thick head.



Anyone else find this?





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colaiscute
 
spot
post Posted: Jul 24 2006, 11:18 AM
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QUOTE (colaiscute @ Sunday 23/07/06 09:29pm)

< I found trends and tripwires to be a little hard to understand >.

well you're obviously smarter than me .. i found it absolutely incomprehensible. graduated.gif



 
focus
post Posted: Jul 24 2006, 10:31 AM
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In reply to: colaiscute on Sunday 23/07/06 09:59pm

I first read this book several years ago when I was first starting to take share trading as more than a hooby. I found the book of great value. I at the time was very interested in candle charting and read most popular books on that subject.

I guess I was into trading on a weekly basis if not more often and did not take into account the fundamentals of a company. I found the numerous charts and definitions were very helpful it deciding when to get in and when to get out. I must say that most charts were of mid to high cap companies but that didn't worry me because I wanted to trade in something that was reasonably safe. Finding suitable stocks that meet the trends was sometimes difficult but rewarding. Trips was more difficult for me as I was not as diciplined and left it too late or was too early, however made a small profit which is now building.

I think I might reread some of the book out of curiosity. I am more astute now and look more and more at fundamentals, but still chart daily.


focus



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