Advanced strategy #10(Trend Line Trading Strategy) - ENJOY !

[TrendTrader]

Eur/usd went up from where I entered over 100 pips, better take my profit since it touched today's resistance 2. waiting for reversal

[simpleforex]

Hi all, a little intro here, I'm a newbie to this forex and I'm staying in SG. Time zone is GMT+8hrs.
I see that most of u trade during london ex hrs which is EST time = GMT-5hrs, right?
I'm very interested in this strategy and I'm very excited to hear that many of u can capture 100pips of forex or more in some trade. I'm still learning to capture on how to draw trendline correctly even though I've read a link from this thread http://www.trendlinebook.com/ on how to draw trendlines.

I've read the forum on how to use this strategy and decided to try it out on live account.

Scenario:
On the big pic as shown in attached, the TL was tested with one false break and another one hit the TL and fall back. I thought this time was a bingo and I shorted it as per attached on 1hr TF. I zoomed in to 15min TF to capture the entry (which is at 5pips below the candle's low which nearly hit TL) so as to minimize my risk.

Result: Few hours later, Ouch!!! This pair breakout of the TL... Is this a breakout or false break?

Can anyone please enlighten me on the following questions:
1. Did I draw TL correctly on the 4hr TF?
looks ok to me..avoid drawing trendlines throught the wicks..
2. How to confirm if the candle which nearly hit the TL and has some retracement on the hourly basis is the correct current hot swing high candle that we can short sell?
larger timeframes like the 1hr or the 4hr can hide early oportunities get in. best way to avoid this is to switch to smaller timeframes like 5min up to 30min to get in early when you notice early retracements in the smaller timeframes.
3. Do we need to wait for big pic 4hr to show some signs of retracement before we act? But this brings our stop loss even further away from entry...
very true...i just answered the solution to that problem in 2.
4. If this current price has broken out of the old TL but still fallback to the old TL's trading range, do I need to redraw the TL from the highest of 4hr TF point to this recently swing high?
yes, that is the best practice...use the new high or low to draw the new trendline...you might also prefer to keep the old trendline IF price has not intersected it significantly and later continues to obey it.

I've traded 3 pairs recently with this strategy only to see I'm being cut, confidence also hurt, can anyone help???
Thanks

[simpleforex]

Hi Simple forex & Others

I have recently gone through all your post and discover that this system is near to perfect trend trading. I will try to implement it and see how far I can adorpt.

You all are great

Good on bro! Keep it Simple!

Cheers

[sneid]

Can anyone please enlighten me on the following questions:
1. Did I draw TL correctly on the 4hr TF?
looks ok to me..avoid drawing trendlines throught the wicks..
2. How to confirm if the candle which nearly hit the TL and has some retracement on the hourly basis is the correct current hot swing high candle that we can short sell?
larger timeframes like the 1hr or the 4hr can hide early oportunities get in. best way to avoid this is to switch to smaller timeframes like 5min up to 30min to get in early when you notice early retracements in the smaller timeframes.
3. Do we need to wait for big pic 4hr to show some signs of retracement before we act? But this brings our stop loss even further away from entry...
very true...i just answered the solution to that problem in 2.
4. If this current price has broken out of the old TL but still fallback to the old TL's trading range, do I need to redraw the TL from the highest of 4hr TF point to this recently swing high?
yes, that is the best practice...use the new high or low to draw the new trendline...you might also prefer to keep the old trendline IF price has not intersected it significantly and later continues to obey it.

I've traded 3 pairs recently with this strategy only to see I'm being cut, confidence also hurt, can anyone help???
Thanks

Hi Simple Forex,

Thanks for your response to the queries I have. For question 1, if I were to avoid drawing the TL through the wicks then do I start drawing from that longest wick to the next swing high as shown in the attached red line?
Now if the candle closed outside of the TL, does that confirm a breakout?

I ask this question is because there are some times where the candle closes outside of the TL and still retrace back to below the TL and enter into the trading range. Any idea on how to confirm if the breakout is genuine?

[simpleforex]

Hi Simple Forex,

Thanks for your response to the queries I have. For question 1, if I were to avoid drawing the TL through the wicks then do I start drawing from that longest wick to the next swing high as shown in the attached red line?
Now if the candle closed outside of the TL, does that confirm a breakout?

I ask this question is because there are some times where the candle closes outside of the TL and still retrace back to below the TL and enter into the trading range. Any idea on how to confirm if the breakout is genuine?[/quote]





See attachment

[simpleforex]

The beauty of entering in the smaller timeframes is that your risk is quite small due to the stop loss distance being quite small.

Now, there will be times when you will miss a good entry in the 1hr or the 4hour timeframes. and you notice that the market is trending nicely. however you CANT find a good setup in the larger timeframes.

What can you do? You can get get into the much smaller timeframes to look for opportunities if you want. If you cant find something in there larger timeframes, you can definitely find something in the smaller timeframes.

[simpleforex]

there are only two outcomes or reactions when price comes to a trendline:

#1: it obeys it
#2: it intersects it.

this makes it easier for the trader as now you can take trades based on the anticipated outcome for any of these two. HOW? You are either right or wrong. there is no sitting on the fence. If you are right, the potential for huge profits is great. if you are wrong, you will walk away with a small loss that you have accepted BEFORE you placed the trade based on your risk management rules or you you might walk away with a breakeven trade and such is the nature of the market. Losses happen but as long as those loses are not OVERSIZED and OUTSIZED loses based only on one or few trades that actually wipes out all good profits that that you have taken the time and effort to put into your trading account. It is easy to do that, huh?... All profits gone with such few bad reckless trades because of your cockiness or overconfidence or overtrading or entering with a much larger risk.

I think the greater part of that kind of problem is that people want instant gratification, the thrill, the excitement, for the "now". but that kind of pattern ultimately, later, if not soon, would result in running your trading account to the ground.

There is a saying: money saved little by little will grow.

You are not competing with anyone when you are trading. So why the rush? The market is here to, today, tomorrow, next week, next month...

The only devil to face in trading has a 3 letter name he is called: YOU.

If you learn to tame him, you are halfway there to succeeding.

another thing about trendline entries is that TRENDLINES DO NOT LAG. with other indicator based strategies, by the time you enter, the market would have moved, sometimes, to a great deal. and when you enter, you could possible be entering at a time when it might be doing a temporary reversal or pullback and so you are luck if you do not get stopped out.

Ok, enough of ranting...

couple of trades for today..well see how it turns out...

[TrendTrader]

There is a saying: money saved little by little will grow.

You are not competing with anyone when you are trading. So why the rush? The market is here to, today, tomorrow, next week, next month...

The only devil to face in trading has a 3 letter name he is called: YOU.

If you learn to tame him, you are halfway there to succeeding.

another thing about trendline entries is that TRENDLINES DO NOT LAG. with other indicator based strategies, by the time you enter, the market would have moved, sometimes, to a great deal. and when you enter, you could possible be entering at a time when it might be doing a temporary reversal or pullback and so you are luck if you do not get stopped out.

Ok, enough of ranting...

couple of trades for today..well see how it turns out...

“How to avoid failure and disaster in forex market” that would be a great title

Simpleforx, thanks for all these enlightenments and educational ideas. That’s right, We are our own enemy. We just have to realize it before it is too late.

Everything you described is exactly what 90% of traders are doing including me. Over trading, oversize trades, over confidence with high risk, no money management, lack of discipline, and lack of patience. That is the recipe of failure.

There are times when I follow the strategy, I buy as the plan says, and then it reverses and touches my stop loss and then go back and goes in the same direction as I anticipated in the first place. So, I learned from that trade, and I made my stop loss further away, and then the market reversed and cross my stop loss and continue to go down lol. That makes me go nuts and get confused on what to do next time. That kind of market behaviors make us get confused on where to put the stop loss. Here is an example EUR/USD.

[simpleforex]

There are times when I follow the strategy, I buy as the plan says, and then it reverses and touches my stop loss and then go back and goes in the same direction as I anticipated in the first place. So, I learned from that trade, and I made my stop loss further away, and then the market reversed and cross my stop loss and continue to go down lol. That makes me go nuts and get confused on what to do next time. That kind of market behaviors make us get confused on where to put the stop loss. Here is an example EUR/USD.

eurusd.gif

It does happen...that is the nature of the market. It just drives you nuts hey? , but guess what? You should understand, every trade that is placed, there is no guaranteed outcome. there are only two outcomes in every trade, it works or it doesn't. the key is to lose what you can afford to lose without breaking your account on those trades dont dont work out...and also knowing that there is a tomorrow because there will be better setups that will behave EXACTLY as what they are supposed to do and it is during those times that you make make 5 or ten times more than you lose.

Like for instance, the two short trades I took on usdjpy and usdchf yesterday. sometime after my entry, the market moved up and I got out stopped out with almost breakeven...then what happened? MASSIVE DOWNWARD MOVE!!!

[simpleforex]

this is the chart of usjpy and the trade i took yesterday and got stopped out with brekeven.