Definition
"Trendline Phantoms or false trend lines"
Two Types of Trendline Phantoms
1. Diagonal Trend Line Support
"The priming is done by way of seeing the market begin to make higher highs and higher lows"
"The market appears to have an imaginary diagonal line it seems to repel price higher from"
"Retail Traders will extend these imaginary lines into the future and attribute support theories to it"
"When price hits the extended imaginary diagonal line connecting higher lows retail traders buy it then"
2. Diagonal Trend Line Resistance
"This is primed in the thought processes of retail Traders by seeing the market begin to make lower highs and lower lows"
"The market appears to have an imaginary diagonal line it seems to propel price lower from"
"Retail Traders will extend these imaginary lines into the future and attribute resistance theories to them"
"When price hits the extended imaginary diagonal line connecting lower highs retail Traders short at that moment"
Trend Line Theory - ICT's Perspective
"It's my perspective that there's no basis on trend line theory in the form of diagonal support or diagonal resistance"
"I believe it says basically an opinion. There's no statistical Edge that I've been able to build with use of diagonal support or resistance in the form of trend lines"
"Now I've been doing this for 24 years... and in 24 years I've done a lot of things in analysis and I was indoctrinated with trend lines when I first started and to me it made perfect sense because I could see it in the past and you know all the books gave us perfect examples where it all works"
"But when we try to use the trendline idea you know which lows do you draw connections to which highs do you draw connections to and quickly all of a sudden and you it's like well maybe this isn't as easy as I thought it was"
Price Awareness of Trend Lines
"But does price have an awareness of the point of trendline support or does price have an awareness of the point of trend line resistance I'll submit to you that it does not"
"Price has no awareness of your trend line price doesn't respect what you have on your charts price only respects where the actual liquidity is in the marketplace"
"And because they can't see you because you're too small the marketplace sees where the large pools of liquidity are that means in buying interest and selling interest that's already in the marketplace in the form of protective cell stops protective buy stops or new buy stocks for long entries or new sell stops for selling entries"
"That's the only thing that makes price move and it's going to be hinged and framed on the context of who is in play right now what what smart money entity has the control of the marketplace at the moment is it going higher based on their book being bullish or is it going lower based on their book being bearish"
"That's what this mentorship teaches it gives you those ideas to go into seeing where price is most likely going to go and we don't subscribe to down sloping trend lines or up sloping trend lines to formulate ideas in which we find support or resistance based on that idea"
Banks & Trendline Theory
"Do banks associate value or prognostication on the basis of trendline theory I'll submit to you no they do not"
"I'm telling you since the banks don't have any association or prognostication placed on valuing a trendline level on a diagonal basis and the reason why is because it's so subjective"
"You are associating future price movement to a level that hasn't been traded to yet you're doing it on the basis of connecting two reference points in the past that don't have any bearing on what the future price is going to do has nothing"
"That high that you connected to to a lower high when you're looking for resistance or down trending trend line resistance that third time it supposedly comes up to that line what makes you so confident that it's going to go down at that point just because you drew the line on on your chart"
"The Banks don't care what you're scribbling all of your charts they don't care about that they're not aware of it okay but what they are aware of is sentiment that shifts and builds around those levels"
"Funds will get beat up That's the basis of trading large Traders are the prey that's where the markets go they go for their orders not for our little orders not for our little liquidity okay"
"But because we've learned to trade and herd like the fund Traders we all many times are casualties of that war between smart money and large funds that's the business model that goes on"
"Large funds are cannibalized at reversals but they're permitted to facilitate long-term trends when the markets are in that environment but trend lines are not the key to it"
Core Flaw of Trend Lines
"Is the very nature of trend lines flawed at its core I will submit to you that yes it is because it gives too many dangling carrots in front of the Trader's eyes thinking that okay this is going to be an easy setup"
"So therefore let me go in here and sell out this resistance trend line or let me buy it this diagonal support trend line it's not that easy folks"
"But many times our charts will paint these beautifully disguised opportunities that are impossibilities"
"Knowing this how can market makers capitalize on this fallacy and price action"
Study & Review
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