Hi Edward,
Good job on all the effort you've made for the community. This is indeed a good and interesting system. I've gone through the strategy and all those comment and I've got some questions here.
1. You've mention about "if the length of a midnight candle (body + shadows) is less than the length of the previous candle - 23:00 EST, then we would have a greater chance of a false breakout." How's your finding to it?
2. You mention that you would normally wait as long as possible until NY market close. For a day with 2 trendlines spotted, usually it forms a triangle and there is no chance that a breakout won't occur especially closer to the two line crosses. Breakout happen near the cross could easily and possibly just break both trendline.
3. In the following page example
http://forex-strategies-revealed.com/advanced/trendlines-breakout/cpage-22, isn't candle #3 is a valid swing low? or in this strategy, the swing low for the 5 candle range must also be the lowest low from the 5 candles?
4. On the strategy, it says that a protective stop is placed above/below the candle that violates the trendline. But I see that there is much discussion about such stop often get hit when break of the trendline is close to the open price of the candle. From your experience which stops is most recommended:
a) Few pips above/below the candle that violates the trendline or to say the candle that we make our entry (as strategy suggested.)
b) Few pips above/below previous candle's high/low if that is looser than the current high/low.
c) Few pips on outside the opposite trendline (this will be harder to judge when the trendline is steep).
d) Behind a pivots S/R or common S/R or Superrior S/R.
5. You mention that you're working some idea previously from the quote below, did it worked out well from your experience?
- we draw trend lines using 5 candle range after midnight AND now also 3 hours before the midnight if there is a valid swing to use.
- if we ended up using a swing before the midnight, we only draw a trend line which would allow us to trade a breakout in the direction of the main trend.
- our main trend is suggested by 200 EMA: price above 200 EMA - uptrend, below - downtrend.
6. From somewhere I've read, if not mistaken you mention that if a candle close within a trendline after breakout, you would then close the position assuming that's a false signal. Is that right?
7. You mention that you will set limit order once a trendline is identified. Does the image or attachment below justify it?
Thanks,