4xpipcounter's trendlines

[4xpipcounter]

This thread might be short, but if you catch the simplicity of what I am going to show, it could have such a positive effect on your trading that you will remember it for a long time. I know, quite a bold statement, but I am ready to back it up.

TL's are too cut-n-dry to have any glamor to them. There is nothing about them that awe-inspire the average trader. But, get a firm grasp on what this thread is going to show, it might be the only tool you will ever use.

By using TL's only, they will not yield a lot of trades, but they will yield many low-risk and high return trades. The key is they have to be drawn correctly.
Some key points I want to mention. I am going to have to use the rear view mirror a lot in this thread, because this is going a crash learning course that promises to put lots of pips and tick in all the "A" students' pockets.
If you want to discuss ichimoku, stochastics, or my S&R's, go to my other thread, "Some of my forecasts", and if you know me, you know I will be more than happy to discuss it with you. That being said, one of those indicators might come up because of whatever..... (Just got to protect myself, in case something happens.

I don't figure this thread to go too far beyond 20 posts, but if a bunch of us are pro-active, then it could go a long time.
This is what I'd like to see:
1. This is mainly for learning, so all questions, concerns, and comments about TL's are welcomed.
2. In viewing and making TL's on your own, and you find it does not perform exactly the way I say it does, then post it. Yes, that is a challenge to put me on the spot. It's going to be very hard to find an exception to my rule, so I urge anyone to find it.
3. Give me any market I have a chart for, and I will post the TL methodology in lieu of it.
4. Feel free to post your own chart what you have seen.

If we get that kind of interaction, then this thread can go for a long time. If not, then you will still have a stick of dynamite in your hands that is going to blow ticks and pips all over the place.

Another reason this thread will go quick if there is no interaction, is because of the simplicity of what I am showing. I only adapted TL's in my methodology 3 months ago, even though I have been trading for 6 1/2 years.
I could go into the more advanced forms of their usage, but I won't in this thread. This is Beginning Trendlines 101.
How simple is it? I showed my 9-year old grandson how to do it, and he caught on right away. Albeit, he's a straight-A student in school, but folks! He is 9-years old.

After having said all that, grab yourself a bag of popcorn, one of your favorite drinks, kick your shoes off, and let's being the journey. It promises to be wonderful.

 

[4xpipcounter]

Concerning the poll

Can everyone please wait a few posts of the actual content before you vote in the poll?

It is not going to be public, so this is going to avail everyone to be as objective as possible.

If you voted either of the last two answers, then please get a hold of me on the PM or in this thread to let me know where I failed, or what you did not understand.

 

[absolute.zero]

Eager to read more !

 

[4xpipcounter]

I'm eager to blow your minds with the simplicity of this thing.
The first post will be up in minutes.

Eager to read more !

 

[vibhunair]

And I m eager to get my mind blown away...
Waiting for the thread to kickstart 4xpipcounter..
Thanks on the behalf of all who are going to benefit from yet another informative thread of yours :thumb:

 

[4xpipcounter]

Nugget #1

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As I hinted in the introduction, you can bring any market to the party, and the principles that are going to be taught can be applied in any market. So, on the first market, I chose Nifty, because it is, seemingly, the most popular market on this site.
From here on out, someone else name a market I have a chart for, and I'll post it.

Let also go over a legend to go by, so in the future, there is no confusion:
Arrows: Point to the reference points where the TL's are drawn.
Stars: Are drawn where the breakout point is.
White lines: Drawn off monthly charts.
Yellow lines: Drawn off weekly charts.
Blue lines: Drawn off daily charts.
Red lines: Drawn off 4-hour charts.

Everything you see on this daily chart is the complete essence of what you need to know. Everything else is going to be improvisions to data already at hand.

The chart I posted was as much data as could be fitted properly on the chart, and still be able to see it all.

Arrow 1 points to the peak of the 1st downtrend.
Arrow 2 points to the first swing high in the downtrend.
Plain and simple. That is all you need to know in drawing a trendline. (I'll cover exceptions in a later post, which add spice to the TL's.)
As long as that TL is not broken, the market is in a downtrend.
1. Downtrend starts. At that point, there is no TL, because the market could still be in an UP.
2. The TL is drawn once we notice the first discernible swing high.
3. After TL is drawn, we are patient. This is the daily chart, so all we do is check daily to see where price action is.

Once the TL is broken, the downtrend is over, and that is indicated by the 1st star.
There are 2 ways for entry-- the aggressive, and the more preferable.
The aggressive approach says to jump in on the next day's opening candle. If you do it that way, you got to be prepared to take profits quick, because inevitably, there is always a correction back to the point the candle opened in the new trend. Once you get a correction, this would be the only hard, and that is finding an entry, and then ultimately, the exit. You could enter once price retraces to the original break point. What will be the containment level is the original TL. The only time that original downtrend line was hit was on the new downtrend that ensued later.
The exit is a little more complicated, but not a big deal. First of all, all legitimate trends contain a significant amount of candles, so you know as long as the TL was drawn right, and you entered the DOWN right, you will be able to stay in the trade for several candles before it is time to get out.
This is where your personal methodology of finding S&R's will come in handy. One way to do it is draw a Fibo extension. Draw from the last swing high to the low that began that current downtrend. One thing for sure is that it will move 138.2% of that span.

The new downtrend is arrows 3-4. You will notice it crossed the TL that made up arrows 1-2. That means nothing for the benefit of this study. The only thing you are waiting on is that TL to be broken for an entry to go long, and that was star 2. This UP began kind of messy, but it still stayed in the necessary parameters. First the following candle pulled back, hit the TL then bounced off, and then we got a somewhat strong move north. Afterward, we got a deep correction, but notice it was still contained above the TL, and that correction also made for the swing low for the new uptrend. Since that pullback, the market has been in a basic uptrend ever since.
Aggressive traders could also find a place to jump in after the initial move and trade the contrarian direction of the trend, which would be a counter trend trade.

Another thing to notice is that a strong move always accompanies a strong break of the TL. The one that broke star 1-2 was weak by comparison to most moves, but we did have the spike UP the following day that confirmed the new trend.

This is also why a lot of times in my analysis I will mention a strong move that will ensue predicated on this and that. When it does happen, sometimes people are amazed. The only reason it happens that way is because of the TL properties .

Also, the TL's can be drawn from the 4-hour, daily, weekly, and monthly charts. I trade forex, and I don't like drawing TL's from the hourly, because literally half the trading (for the most part) day is slow, so the hourly TL's get broken by default.

Also, notice we have a new TL drawn for this current uptrend. The red TL, below, was drawn off the weekly. The one line I did not draw on the chart, but should have is the line that should have been drawn from the weekly on top. That would have actually connected the 2 genesees of the DOWN's. So, on the weekly we are in the middle of an uptrend, and a downtrend at the same time.

Review:
1. Draw the TL from the peak high (dip low in an UP) to the swing high (swing low in an UP). That becomes the TL for the downtrend (or vice versa).
2. All you are waiting for is that TL to be broken. Once that happens enter on the open of the new candle, or wait for the inevitable pullback. Always remember on the pullback, either the original entry area will contain the correction or the old TL, so somewhere between those 2 points will be your entry.
3. Never anticipate the break, unless another part of your methodology is acting as confluence. Wait for the candle to complete, then enter on the new candle.
4. The candle that breaks the TL will be larger than a typical candle.
5. The new trend will have at least one swing low. Once it has been made, that is the new TL for the new trend.

 

[4xpipcounter]

THanks, Vibhinair.

This might be irony to some that know me in the short time I've been on this site, but trading TL's is easier than ichiimoku.

And I m eager to get my mind blown away...
Waiting for the thread to kickstart 4xpipcounter..
Thanks on the behalf of all who are going to benefit from yet another informative thread of yours :thumb:

 

[4xpipcounter]

I'm going to bail out, as far as posting anymore "nuggets". I want the simplicity of TL's to sink in, particularly with the newbies. Then next post on the TL properties will be labeled "nuggets 2".

As far as the more experienced traders are concerned, I know there are various ways to draw TL's to set up trading opportunities. All I want to focus on now is the simplest form, and in showing how to make lots of pips and ticks in this form's usage.

Part of stepping aside also allows some of the newbies to post question, comments, and observations. Possibly, some things could be addressed that would be featured in a nugget through some pro-activism.

 

[4xpipcounter]

One thing I did not mention in nuggets #1, and maybe I should emphasize it. If you are not the aggressive type of trader, and you are very patient. this type of trading is like getting a signal to make the trade long before the events. Simply put, the candle blasts through the TL. Afterward, a correction is going to happen. Once it pulls back between the crossing point and the original TL, you enter the trade, and then it moves in your favor.

 

[sibumajumdar]

Re: Nugget #1

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As I hinted in the introduction, you can bring any market to the party, and the principles that are going to be taught can be applied in any market. So, on the first market, I chose Nifty, because it is, seemingly, the most popular market on this site.
From here on out, someone else name a market I have a chart for, and I'll post it.

Let also go over a legend to go by, so in the future, there is no confusion:
Arrows: Point to the reference points where the TL's are drawn.
Stars: Are drawn where the breakout point is.
White lines: Drawn off monthly charts.
Yellow lines: Drawn off weekly charts.
Blue lines: Drawn off daily charts.
Red lines: Drawn off 4-hour charts.

Everything you see on this daily chart is the complete essence of what you need to know. Everything else is going to be improvisions to data already at hand.

The chart I posted was as much data as could be fitted properly on the chart, and still be able to see it all.

Arrow 1 points to the peak of the 1st downtrend.
Arrow 2 points to the first swing high in the downtrend.
Plain and simple. That is all you need to know in drawing a trendline. (I'll cover exceptions in a later post, which add spice to the TL's.)
As long as that TL is not broken, the market is in a downtrend.
1. Downtrend starts. At that point, there is no TL, because the market could still be in an UP.
2. The TL is drawn once we notice the first discernible swing high.
3. After TL is drawn, we are patient. This is the daily chart, so all we do is check daily to see where price action is.

Once the TL is broken, the downtrend is over, and that is indicated by the 1st star.
There are 2 ways for entry-- the aggressive, and the more preferable.
The aggressive approach says to jump in on the next day's opening candle. If you do it that way, you got to be prepared to take profits quick, because inevitably, there is always a correction back to the point the candle opened in the new trend. Once you get a correction, this would be the only hard, and that is finding an entry, and then ultimately, the exit. You could enter once price retraces to the original break point. What will be the containment level is the original TL. The only time that original downtrend line was hit was on the new downtrend that ensued later.
The exit is a little more complicated, but not a big deal. First of all, all legitimate trends contain a significant amount of candles, so you know as long as the TL was drawn right, and you entered the DOWN right, you will be able to stay in the trade for several candles before it is time to get out.
This is where your personal methodology of finding S&R's will come in handy. One way to do it is draw a Fibo extension. Draw from the last swing high to the low that began that current downtrend. One thing for sure is that it will move 138.2% of that span.

The new downtrend is arrows 3-4. You will notice it crossed the TL that made up arrows 1-2. That means nothing for the benefit of this study. The only thing you are waiting on is that TL to be broken for an entry to go long, and that was star 2. This UP began kind of messy, but it still stayed in the necessary parameters. First the following candle pulled back, hit the TL then bounced off, and then we got a somewhat strong move north. Afterward, we got a deep correction, but notice it was still contained above the TL, and that correction also made for the swing low for the new uptrend. Since that pullback, the market has been in a basic uptrend ever since.
Aggressive traders could also find a place to jump in after the initial move and trade the contrarian direction of the trend, which would be a counter trend trade.

Another thing to notice is that a strong move always accompanies a strong break of the TL. The one that broke star 1-2 was weak by comparison to most moves, but we did have the spike UP the following day that confirmed the new trend.

This is also why a lot of times in my analysis I will mention a strong move that will ensue predicated on this and that. When it does happen, sometimes people are amazed. The only reason it happens that way is because of the TL properties .

Also, the TL's can be drawn from the 4-hour, daily, weekly, and monthly charts. I trade forex, and I don't like drawing TL's from the hourly, because literally half the trading (for the most part) day is slow, so the hourly TL's get broken by default.

Also, notice we have a new TL drawn for this current uptrend. The red TL, below, was drawn off the weekly. The one line I did not draw on the chart, but should have is the line that should have been drawn from the weekly on top. That would have actually connected the 2 genesees of the DOWN's. So, on the weekly we are in the middle of an uptrend, and a downtrend at the same time.

Review:
1. Draw the TL from the peak high (dip low in an UP) to the swing high (swing low in an UP). That becomes the TL for the downtrend (or vice versa).
2. All you are waiting for is that TL to be broken. Once that happens enter on the open of the new candle, or wait for the inevitable pullback. Always remember on the pullback, either the original entry area will contain the correction or the old TL, so somewhere between those 2 points will be your entry.
3. Never anticipate the break, unless another part of your methodology is acting as confluence. Wait for the candle to complete, then enter on the new candle.
4. The candle that breaks the TL will be larger than a typical candle.
5. The new trend will have at least one swing low. Once it has been made, that is the new TL for the new trend.

Mr 4x, Read it & liked it though i need few more revision as i am a man of average intelligence plus 60 yrs plus (retired). No doubt simple but comprehensible easily. I read all your threads but keep myself to pressing "thanks" button. Daily i go through TJ threads to grasp & retain something. Keenly i read posts related to F&O as i do day trade. Dont know will it be able to use your TL. Reason i use PIB (Power India Bulls) platform which does not provide previous data. I am regular trader 9 am to 3:30 pm but mainly with MNF & Options only with 1-2 lots & never more than that. Lost a lot but learned to earn regularly as a result for the last 10 sessions daily net gain is Rs 500 to 2500. I am happy & confident. But if possible please guide me where from i can use charts which will help me to draw TL & benefit from your EXCELLENT write ups. I am a voracious learner of TA. My sessions starts from 5:30 AM till 10:00 PM. Kindly pardon me if i had over exposed myself to use space of this great forum which is must read for me daily.

Thanks again. God Bless YOU & Happy Trade