Do Trendlines work?

[Thirstin_C]

I am starting this thread to propose an hypothesis regarding why I believe trendlines are significant, not random and of use in trading.

I believe many "major" trendline breaks are correlated to "news" or "fundamental" changes in a given market. Trendline breaks then reflect this change.

For instance let's say you have an 11 market day uptend on a daily chart. HH and HL. But then oil, inflation, non-farm payrolls, etc. fundamentally change the perception of the current price trend and you get a price trend break from up to either down or consolidation.

That is why I believe trendlines work.

Any thoughts or research to support or refute this simplistic view of trendlines is welcomed.

[ObrazaCS]

How do you explain trendlines that extend over decades? Surely, not news, etc. I suspect they reflect normal growth/decline behavior.

[youareapk]

Trendlines work and don't work.

The correct answer is both yes and no

[StockCharts]

Do trend lines work? No, they are not there to "work", but instead it's used as a basic guide hinting to keep an close eye to see which direction it's going to go. Sometimes it breaks the trend, sometimes it does not. So, you can't really judge if it "works" or not. Instead just keep an eye on it when it touches the top or bottom of the trend line.