Trendline Break (The Only System You Need)_3
Jokes apart. Okay, now the REAL substance:
{{** Note: I've tried my level best not to tamper with the documentation. This is an unadulterated, raw material. Also, whenever you read a "I" below, understand that it's the author and NOT me (desifxtrader). I would like to Thank the author for documenting this methodology for everyone's benefit.}}
Introduction
After many PM's, Emails, & any other possible ways of contact by what seems like the entire FF family; I've decided to share my simple trading system/strategy with you. For those who don't know me, my name is Josef (pronounced: Joseph) and I have been trading fx for over two years. I frequent the Eur/Usd thread as I only trade Eur/Usd. I chose to trade E/U because of the viable; business nature of the pair.
The Problem
Different strokes for different folks. While we all hold various skills and tools, we all are tackling the same problem. Unfortunately, one person's method may not help another. Oscillator Indications. For the most part I have a huge problem with putting them to practice on a live account. The reasons are of course, obvious. Though, I would never tell a person their system and/or indicator doesn't work. It's just that, Oscillator Indicators has never worked for me.
The Solution
Price Action. As some of us cringe at those two, little words, I totally understand. I too, was one that didn't believe in Pure Price Action trading. After putting Price Action up to test, I found I understood the market better. I understood the why, how, and when of Price Action. What I've found is that a trader only needs Candlestick Patterns, Trendlines, and maybe Pivot Points.
Overview
If there ever was an easier; modular system, this one is the one. The basic idea of trendlines comprises of many variables that must be taken in consideration when in use, such as, Trend Angle, Momentum, & Time. I'll let you in on a little secret on trading: its not as "random" as most would want you to belive. The market tends to trend either way and patterns occur more often than you think. I would invite you to study up on Market Movements and Patterns, Candlestick Reversal Patterns, and Trendline Uses. The Trendline Break system contains three individual variation; all based on personal preferences. One will be discussed in this thread. The other two will be discussed in a later date. One of the major problems with trading trendlines is that most traders do not know how to properly set and use them. Here is some readings on how to properly apply trendlines.
http://www.investopedia.com/articles/trading/06/trendlines.asp
http://stockcharts.com/education/ChartAnalysis/trendlines.html
http://www.incrediblecharts.com/technical/trendlines.php
A very good skill to hold is being able to read Candlestick Reversal Patterns. Here are some readings on how to properly read and react to candlestick reversal patterns,
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:candlestick_bullish_
http://www.babypips.com/school/reversal_patterns.html
http://www.incrediblecharts.com/technical/candlesticks.php
Tools of the Trade:
1) Trendlines
2) Candlestick Reversals Patterns
3) Any Timeframe
Trading Strategy: As Simple as One, Two & Three
1) Find the upwards trend,
2) Apply the trendline,
3) Price Action breaks downwards through the trendline
Our first step is to locate a strong upwards trend. Apply a trendline to help visually spot out that trend and to use as an "barrier" for Price Action. Now we wait for Price Action to breakthrough the trendline and head downwards, in which a SELL order may now be entered. The chart below is an example of a trade setup we are looking for.
Entry:
Wait for Candlestick Reversal Patterns give us a reversal signal. Once a price action reversal has taken place, wait for price action to break the trendline downwards. Enter at the close of the candle that broke through the trendline.
Exit:
Now that we have an live SELL order open and locked in some green pips, our next focus should be to plan for an exit. Based on our knowledge of Candlestick Reversal Patterns, we will not only use this for entries, but for exits as well. To exit an open position, the trader must recognize candlestick reversal patterns and exit that trade accordingly.
Trade Notes
* Though, this system uses SELL orders only, technically you could apply this strategy to BUY order as well. SELL orders were chosen because of their quick; predictable nature of movement. At best, it's always best to practice trading one direction as opposed to two.
* Market volatility. This system may become useless under low volatile market conditions. Please take note of slow and/or erratic market movements as these conditions have the ability to produce incorrect trading signals.
* Limit Losses. As with any trading system, a trader must use discretion in limiting ones trading risks and losses.
Remember, the basic idea of this system is to keep it simple and focused by limiting equity exposure and offer a very focused trading strategy. This system includes an entry, exit, and simple price action tools; all that is needed for a trader to be profitable. Stay focused and always stick to the plan.
Examples
A example of a trade setup on a 1 Hour timeframe.
Example of trade setups on 4 Hour timeframe:
==========================================================================================================
Jokes apart. Okay, now the REAL substance:
{{** Note: I've tried my level best not to tamper with the documentation. This is an unadulterated, raw material. Also, whenever you read a "I" below, understand that it's the author and NOT me (desifxtrader). I would like to Thank the author for documenting this methodology for everyone's benefit.}}
============================Start==Of===System============================
Trendline Break System
(The Only System You Need)
Credits & courtesy: Jhig
Introduction
After many PM's, Emails, & any other possible ways of contact by what seems like the entire FF family; I've decided to share my simple trading system/strategy with you. For those who don't know me, my name is Josef (pronounced: Joseph) and I have been trading fx for over two years. I frequent the Eur/Usd thread as I only trade Eur/Usd. I chose to trade E/U because of the viable; business nature of the pair.
The Problem
Different strokes for different folks. While we all hold various skills and tools, we all are tackling the same problem. Unfortunately, one person's method may not help another. Oscillator Indications. For the most part I have a huge problem with putting them to practice on a live account. The reasons are of course, obvious. Though, I would never tell a person their system and/or indicator doesn't work. It's just that, Oscillator Indicators has never worked for me.
The Solution
Price Action. As some of us cringe at those two, little words, I totally understand. I too, was one that didn't believe in Pure Price Action trading. After putting Price Action up to test, I found I understood the market better. I understood the why, how, and when of Price Action. What I've found is that a trader only needs Candlestick Patterns, Trendlines, and maybe Pivot Points.
Overview
If there ever was an easier; modular system, this one is the one. The basic idea of trendlines comprises of many variables that must be taken in consideration when in use, such as, Trend Angle, Momentum, & Time. I'll let you in on a little secret on trading: its not as "random" as most would want you to belive. The market tends to trend either way and patterns occur more often than you think. I would invite you to study up on Market Movements and Patterns, Candlestick Reversal Patterns, and Trendline Uses. The Trendline Break system contains three individual variation; all based on personal preferences. One will be discussed in this thread. The other two will be discussed in a later date. One of the major problems with trading trendlines is that most traders do not know how to properly set and use them. Here is some readings on how to properly apply trendlines.
http://www.investopedia.com/articles/trading/06/trendlines.asp
http://stockcharts.com/education/ChartAnalysis/trendlines.html
http://www.incrediblecharts.com/technical/trendlines.php
A very good skill to hold is being able to read Candlestick Reversal Patterns. Here are some readings on how to properly read and react to candlestick reversal patterns,
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:candlestick_bullish_
http://www.babypips.com/school/reversal_patterns.html
http://www.incrediblecharts.com/technical/candlesticks.php
Tools of the Trade:
1) Trendlines
2) Candlestick Reversals Patterns
3) Any Timeframe
Trading Strategy: As Simple as One, Two & Three
1) Find the upwards trend,
2) Apply the trendline,
3) Price Action breaks downwards through the trendline
Our first step is to locate a strong upwards trend. Apply a trendline to help visually spot out that trend and to use as an "barrier" for Price Action. Now we wait for Price Action to breakthrough the trendline and head downwards, in which a SELL order may now be entered. The chart below is an example of a trade setup we are looking for.
Entry:
Wait for Candlestick Reversal Patterns give us a reversal signal. Once a price action reversal has taken place, wait for price action to break the trendline downwards. Enter at the close of the candle that broke through the trendline.
Exit:
Now that we have an live SELL order open and locked in some green pips, our next focus should be to plan for an exit. Based on our knowledge of Candlestick Reversal Patterns, we will not only use this for entries, but for exits as well. To exit an open position, the trader must recognize candlestick reversal patterns and exit that trade accordingly.
Trade Notes
* Though, this system uses SELL orders only, technically you could apply this strategy to BUY order as well. SELL orders were chosen because of their quick; predictable nature of movement. At best, it's always best to practice trading one direction as opposed to two.
* Market volatility. This system may become useless under low volatile market conditions. Please take note of slow and/or erratic market movements as these conditions have the ability to produce incorrect trading signals.
* Limit Losses. As with any trading system, a trader must use discretion in limiting ones trading risks and losses.
Remember, the basic idea of this system is to keep it simple and focused by limiting equity exposure and offer a very focused trading strategy. This system includes an entry, exit, and simple price action tools; all that is needed for a trader to be profitable. Stay focused and always stick to the plan.
Examples
A example of a trade setup on a 1 Hour timeframe.
Example of trade setups on 4 Hour timeframe:
==========================================================================================================
Last edited:
