FREE FOREX STRATEGIES

Advanced strategy #10 (Trend Line Trading Strategy)


A truly great work has been done by Myronn, the author of the current Trend Line Trading Strategy.
Support-resistance trading, trend line trading, checking higher time frames, money management — the strategy has a concrete-like theory base and a simple implementation — a winning combination, that places it into the category of advanced strategies.

Remember, your feedback, comments and suggestions are always in great demand!

Edward Revy

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i get it now. Thanks Thomas.

And I'm no computer guy (just a chart looker)

Grant

More work has been done Myronn!!! The learning continues.

Firstly, to the ‘user’ question regarding live or demo, I trade this theory live. It’s close enough to my system that I have confidence it works. Actually, Myronn has hit upon the fractal nature of trading.

When I made the mistakes that I did yesterday and today, it was real money. I find I learn a whole lot better when it’s real. It wasn’t a lot. But when you know those numerals on the balance sheet come from your hours of day job work, you learn. It’s like taking responsibility for your actions—when you do, chances are that you will not do the action many more times in the future.

“Good judgment come from experience and experience comes from bad judgment”

Back to the fractals. Somewhere on the internet-- "Fractals are a rough or fragmented geometric shape that can be subdivided into parts, each of which is (at least approximately) a reduced-size copy of the whole. Fractals are generally self-similar and independent of scale."

Myronn, the other day I was looking at 1 min candle charts looking at patterns, sharpening my skills. Never in a 100 yrs would I think of trendlines and trading on smaller time frames.

On to the trading. I made a few mistakes and would like to comment.

Think of the big trend first. Y’day I was S CHF. I had 120 pts in the bank and left it. When against the big daily trend , book ‘em Dano. I still got 30 pts, but that’s 25% of what I had.

Thursday, today, I knew was going to be hard. Looking at daily charts, most were counter trend or undefined by the time I woke up. Thinking back I should have used the demo acct today. That is another thing too, knowing when things aren't going to go well and taking the day off. I had all three trades change trends. I hadn’t looked at the big pic for the first 2, and for the last one L EUR, it was too late in the day for volume, movement and of course it was counter to the daily trend. In all three I could have liquidated at one or more points for profit. It’s the ‘not good at scalping thing’. Also the stop loss should be an indicator of a changed trend. If the trendline is broken, the trend is too. I need closer stops. Not problems with your system, but the end user.

And lastly:

I disagree with the assumption this doesn’t work with ranging currencies. What you are doing is entering at support or resistance and exiting before it hits the other side. It’s just a flat trendline Myronn!!!! A rising trendline is moving support, it’s just at an angle. Edward will tell you a trending market is so nice, you don’t have to work like we do during ranging ones. March to August was like that. I made money in CAD, but 100 pts at a time, waiting for it to hit S or R, fearing a breakout against you, thinking the trends will never come back. Trending is like the gravy or dessert because you earned it. That’s why its important to conserve capital for the good days.

Ranging is different than choppy too.

That's all for now.

Grant

forex fractals

Grant,

I know there is such a thing as a flat trendline...and when price is going nowhere, what strategy can be applied? Simple observation tells you that when price is going nowhere, sooner or later there is going to be a breakout. The breakout happens often in the direction of the main trend.

You are doing well Grant! Doing good! Doing good! Keep going.

Attached are 2 example of some recent trades I took. During the week, I placed some trades that went against me & hitting my stop loss. But the gains outweighed my losses & so far so good:560% return on the money in two weeks is not bad using a simple trading strategy. Can 50K be achieved within a month with a 5K trading account? I dont know, I've never done it before. I will stick to my trading system & see where it takes me.

The first chart shows two short trades I took on the AUDUSD.

The second chart shows 2 current long trades that I took on USDCAD. I will trail it & see how far it goes. I want to see if Santa has a surprise for me.

(Click to see full size image)
AUDUSD 30 min trading




USDCAD 30 min trading

Regards.

Myronn

TRADING LESSON #4277

TRENDLINE BREAK.

This is euro Thursday where I lost money. It is my fault. I was trading 15 min charts but having daily chart profit expectations.

Shown is 1 hr TF. I set my stop too low for the TF, I should have made it @ least 1.3600. I also saw it at 1.3680 before I left for lunch, I could have moved stop to even or small TP. I think now that this is the key to the system. After it makes it’s move, then UNLESS the TL is broken, it shouldn’t come back to your price.

Another thing I was taught that you should think of TL’s as drawn with a thick crayon, they may respect the trend but not the exact number (the candle before my entry in point—it’s a bit lower than the line) but it’s still no reason for such a low SL. In any TF, 1.3600 would have sufficed, and certainly moving it to even would have put things to the positive, even slightly like I did with the S CHF the other day.

If you look at the beginning of the trend, you will see that it touches, and then GOES. In reality, right away you know you are either right (and the TL will continue) or wrong. There is no middle ground, no indecision.

This is more a factor of my getting used to small TF’s than the system. I ned to still think of scale, of R multiples, 25 pts risk vs 60 I had is a 2.4R. 2R is a good goal.

BTW, the orange down triangle was a short I had looking on a 5 min chart, when I went to 3 hr I saw I was counter trend AND at the TL so I reversed it.

One last thing before I go. I shall speak later, but I have an idea to see if you can make the kind of money you are talking about.

Hello all,

I think it will be worthwhile to present a brief summary of this week's trading(6th-10th Oct 2008) results using the trendline trading strategy:

Total Trades Taken=62
Winning Trades=39
Losing Trades=21
Break Even Trades=2
Therefore 63% success rate.
Largest Winning Trade=$5381
Largest Losing Trade=$3884
Winning Trades Total Amount=$51,003
Loosing Trades Total Amount=$19,805
Net Profit This week =$31,198

Total Profit to date stands at $39,859. Thats a 797% return on a $5000 trading account in 2weeks.
Attached is a screenshot of the account summary.

Account Summary 2 week result Forex

Regards

Myronn

Grant,

awesome job explaining your trades.

I cant help but wonder why that trade went against you so I had to find out why and when I opened up my chart and had a look at the EURUSD long trade you took on thurday (as shown in the chart you posted) this is what I found:
(1)The peak (swing high prior to your long entry) happened to be in a area of 1hr main trendline (down) & price was made to obey it. You took a long entry on a downward plunge of price that was made to obey that main trend.That peak could have provided a good short entry opportunity as per the strategy.
(2)you could have placed you stop loss just below the candle that you shorted on previously.
(3)your trade was against the main trend using a minor uptrend Channel & I do spot 2 other possible long entry points in your chart including the one that you took. Did you spot that or you missed it?

Regards

Myronn

Hello all:

In answer to the user who submitted this question: Did you implement this strategy into live trading or just as a demo? If you are currently trading a live account, I would like to know how long do you test a strategy before starting to use it in real account?

Answer: I have been demoing different strategies over 1 year and blew up my demo accounts every time & also I blew up my real mini account with FXCM! I took a full stop to evaluate what I was doing wrong. I spent countless hrs watching the charts & trying to figure out a trading system that would fit me that would have a lot more success. then came the "AHA" moment when I began to draw trendlines and saw prices reacting on these trendlines. That was it. That was what I needed. that is the background behind the trendline trading system.

So Im still on demo obviously. I intend to demo this trading strategy for at least 2 months. Those who use this strategy on live accounts remember that you have the odds on your side when you trade with the trend. Dont fight it! Follow it by getting in at the right time as per the strategy. You will be supprised by the high accuracy and success of this system. Keep it simple.

Hey Grant! Awesome trades! Keep it up!

Cheer from Down Under

Myronn

Hi Arsalan,

Good on you. Its good to know you are using the trendline trading strategy. The more you use it, the more you will begin to see how how price behaves when it approaches those main trendlines: The stronger the trend, price will OBEY the trendline, and if the trend is weak, price may break the trendline and that may signify a change in trend. I like this strategy best from others that I have tried simply because I do not try to fight the trend and I know that that the odds are on my side.

Happy trading.

Myronn