Advanced system #5 (Trend Lines Breakout System)

[Edward Revy]

Hi Dennis,

Once your trend line(s) are in place, you should step earlier into the market if the price gets hit. You enter the market as soon as the opportunity presents itself. The time reference from that point [the moment you draw a trend line] no longer matters.

Best regards,
Edward

[Edward Revy]

Hi Dann,

yes, this works for both currency pairs.

Best regards,
Edward

[Coenraad]

Hi Edward,

Regarding this strategy, are you still trading it? Secondly, on which pairs do you trade it?

Coenraad Lubbe.

[Edward Revy]

Hi,

yes I use it without changes;
the pairs most of the time are: EURUSD, GBPUSD and USDJPY.

Regards,
Edward

[szgy74]

Hello Edward,

first, this site is very good with all the strategies. You are doing a great job here.

I have some questions regarding this TL breakout strategy. In the description you wrote:
"The Entry is done on the break of either one of the trend lines and is immediate without waiting for a current candle to close."
Where do you think the TL break is? I have noticed that many times the price "peeks" the other side for a while, test te TL
and then retraces and stays there, turning the trade into loss. It seems that adding +10 pips above/below the TL would
surely be OK, but this consumes a part of the profit. Maybe 6-7 pips is also OK.
I have thought of searching a nearby S/R level to break on a lower TF but so far no result.
Is there a sense of searching for a tighter stop than the high/low of the breaking candle? Sometimes I find that too much.
Maybe lower TF S/R levels would be useful for this too, I don't know.

Exit point: it seems ADX +Di/-Di crossover on M5 TF usually gives a good point to exit.

I did not test it for long, but noticed that NZDUSD sometimes makes good breakouts, for example 03.19 8:00-9:00 GMT.
This seems a bit strange for me, as NZD and USD are both asleep that time

I noticed that sometimes price reaches the point where the two trendlines cross, making many breakouts in both directions.
What do you suggest to do then? I think the TLs seems to become invalid and best is leave this for the day.

To make my life easier, I use a box indicator (BreakOut_BOX_Indicator), which colors the defined hours on the chart.
One can find many kind of these boxes on the internet, usually with "box" and/or "breakout" in the name. In the parameters
box range and colors can be changed. This box is not the best because the first and last bars high/low is hard to see.

I have found somewhere an indicator written by John Hitt "Trendlines2.mq4" (attached) that draws trendlines (from M15 to W1)
depending on current TF. I modified this according to the rules to draw only TLs with swingpoints in the defined timerange and
alerts on the breakout. Now it is only a "for programmers" version I will gladly share when it is a bit more user friendly.

I am interested in hearing about results with other pairs.

Regards,
Gyula

[szgy74]

Hello Rom,

I attached a zip file with 20 versions of timeboxes. Try them to find which is what you like. I am not the author of any of them, I found them on different websites.
I guess you may want to try "TradeTime", here you can define 5 time ranges with different colors. (similar is "i-ParamonWorkTime", with only 2 time ranges.) If you need less than five, give the same start/end time for the remaining ranges. The ranges may overlap (e.g. one 6:00-12.00 , and another 8:00-10:00), so you can define the ones in your pdf file. Thanks a lot for the file, I missed something like this.

Some of the indicators are clones, usually with similar names.
Please note:
- In the settings check GMT offset, GMT shift (if there is), and local/broker timezones to be sure you highlight the desired range of time.
- Usually there is a parameter called "Number of days" or something like that. You probably will not need 50 or 100 boxes to be dispalyed when you are not looking back in time, so set this to somewhere less than 5. So MT4 will not consume lots of processor resources in vain to calculate and dispaly objects you don't need.
- Many parameters are set as round hour, :00 minutes, but usually you can set minutes too, e.g. 08:20. This will be visible on less than H1 timeframes.

If something is not clear feel free to ask.

Regards,
Gyula

[irsjwoo]

Dear Edward,
This strategy is a truly winning one, I've been using this strategy very succesfully for some time now. I've modified your original strategy slightly as follows:
1. the up/down trendlines are drawn during the asian session, since the GBP/USD pair ranges most of the time during the asian session, I will watch the possitions of both trendlines compared to the asian range boundaries. If both trendlines are contained within the asian range, I will only trade the breakout of the asian range because if you would trade the trendline break chances are that price will reverse at support or resistance of the asian range.
2. If price breaks one of the trendlines I will switch to the 15 minute timeframe to time my entry, at this point I will try to, if possible, access if the break is true or false by using another stategy of yours which is called: "True and False Trendline breakouts". If the break is genuine I will enter the break some time later compared to your original entry which would be immediately on the break, this at the cost of some pips.
3. I also take the larger trend in consideration, for me that is the trend according to the 4 hour timeframe. If the break is a countertrend one I will take profit quicker than in the case of a with the trend break

My the force be with you,

[cpr]

Today's price for GU (long) is over 1.6297

Can you update the forum about the result of your trade ?

[cpr]

Dear Edward,
This strategy is a truly winning one, I've been using this strategy very succesfully for some time now. I've modified your original strategy slightly as follows:
1. the up/down trendlines are drawn during the asian session, since the GBP/USD pair ranges most of the time during the asian session, I will watch the possitions of both trendlines compared to the asian range boundaries. If both trendlines are contained within the asian range, I will only trade the breakout of the asian range because if you would trade the trendline break chances are that price will reverse at support or resistance of the asian range.
2. If price breaks one of the trendlines I will switch to the 15 minute timeframe to time my entry, at this point I will try to, if possible, access if the break is true or false by using another stategy of yours which is called: "True and False Trendline breakouts". If the break is genuine I will enter the break some time later compared to your original entry which would be immediately on the break, this at the cost of some pips.
3. I also take the larger trend in consideration, for me that is the trend according to the 4 hour timeframe. If the break is a countertrend one I will take profit quicker than in the case of a with the trend break

My the force be with you,

Hi, I would like to understand more on your modification.. Can you explain your strategy with some pictures.. please ?

[irsjwoo]

Greetings,
I will take the EUR/USD trade today as a example, I have attached the 1h & 15m timeframe for visualisation. On the 1h timeframe (GMT) you see both trendlines. The purple lines are the boundaries of the range on the 4h timeframe, price is at the moment rangebound on the 4h timeframe. The black line is the support line of the asian range, the resistance line of the asian range coincides with that of the 4h timeframe. On the 15m timeframe price broke out of the asian range you could have traded this breakout, but at the moment we wait for a clear break of one of the trendlines according to Edward's strategy. When price approaches the trendlines I start marking off the price action sequence of swing highs and lows. As you see before price breaks the downtrendline it is making lower highs and lows, so as the break takes place I will be quite confident that the break is genuine. In this case we should take profit in time since price is near a higher timeframe resistance (4h timeframe). As you see price reverses in the vicinity of the lower boundary of the larger range.

May the force be with you,