Trendline inaccurate on lower timeframes?
- This topic has 7 replies, 4 voices, and was last updated 6 years ago by
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I have noticed an anomaly with the way trendlines drawn on a high timeframe appear on a lower timeframe. My workflow consists of viewing 1000 units of Days and drawing trendlines from left>right, I then enter trades on the 1hr timeframe and use the trendlines as part of my strategy. It was during analysis of a trade entry that I noticed a daily trendline appeared around 20pts higher on the hourly chart than it did on the daily chart for the current time. Although a small difference for the size of the market (EUR/USD), it’s quite a difference when being used for aiding trade entry decisions.
After some experimenting I found the problem has to do with the 2 points PRT uses to calculate the extension of the line. If the line is drawn right>left instead, then point one seems to be anchored accurately in the present and does not change on lower timeframes. From this I deduced that, if points 1 and 2 are drawn from left>right and far enough in the past, PRT must perform some kind of rounding operation when redrawing the line for a lower timeframe. This rounding is probably tiny but over 1000 days of data builds up to the 20pts difference I am seeing.
If my deduction is correct then that’s fine, I’m happy as long as I can trust that my trendlines are where they should be, but it would concern me if there is a wider issue at play that I am not aware of. As I seem to have a solution by drawing from right>left I don’t think there’s much else to be done, but I’d be interested if anyone else has had this problem or has any alternative theory as to what is happening here.
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Dear James,
In order to allow us to analyze your platform, please send us a technical report following these instructions:
- As soon as you encounter the issue, go to the “Help” menu on the ProRealTime toolbar.
- Please assure that the window concerned by this issue is open.
- Click on “Technical support”
- Choose the category (e.g. “Data” for a spike)
- Select the concerned window in the drop-down menu.
- Giving as much detail as possible, explain the issue you are having in the text box.
- Click “Send report”
This will send us a report containing technical information concerning your platform, which will allow our technical team to run a diagnostic analysis of the issue you have come across.
Thank you in advance,
Maria
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Hi James,
You need to increase the amount of historical data in your 1 hour chart.
You daily chart with 1000 units goes back to June 2014; your entry point is as you said Feb 11 2015.
The 1 hour chart only shows data since January 2018 if you keep the setting of “1000 units”; your entry point is therefore not “available” within this chart. Hence you need to increase the historical data in order to be able to see Feb 11 2015 in your 1 hour chart. Only when this is the case the software can correctly plot your line.
Some further information which I hope is helpful:
Unit of time used to create the line
When you transfer a 1 hour line to a 5 minute timeframe, each point created on a 1 hour timeframe may correspond to 12 potential points in 5 minute view (each one hour candlestick contains 12 5-minute candlesticks).
As a result, the higher the difference between the larger and smaller timeframe, the higher the possible imprecision may be when looking at a smaller timeframe.
Distance between points on the line
When a line is drawn, the closer the points defining the line are in time, the more the transfer of the line to lower timeframes may be imprecise (angle effect).
Precision of points used to draw the line
When a line is drawn, if the points are not set on specific values (for example: Open, high, low, or close), the transfer of the line to lower timeframes may be imprecise.
Recommendations
- Make sure drawing assistance is activated when drawing your line. Go to “Options” > and check “Drawing assistance”
- When you draw, set the reference points of your line based on specific points of candlesticks : Open, High, Low, or Close to optimize transfer of lines to lower timeframes.
- Use the “Segment” tool to draw lines without extensions. If you want to use the line tool, make sure that the points of reference you use to draw the line are as far as possible from each other in order to optimize transfer to inferior time frames.
- Make sure the points used to define the line are displayed in the historical data of your charts.
Best,
Ulrike
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I found a fix. If you only ever use segments (as suggested above) and then once you have your two points, right click to configure segment, you can ‘right extend’ the line from there. Then it will be accurate on lower timeframes. Obviously line extension is going to be required in most trading applications and segments aren’t all that useful.
So it’s possible to get the accuracy, but it just requires several clicks.
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The main problem is the use of ‘line by angle’ which shouldn’t be used across different timeframes. Hope this helps someone else.
1 user thanked author for this post.
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