Advanced system #5 (Trend Lines Breakout System)
Submitted by Edward Revy on June 3, 2007 - 15:20.
Breakout systems like this are always in great demand. It is quick, easy and with a proper use has a true winning rate of over 90%.
Currency pair: GBP/USD, EUR/USD - tested. Other pairs may also be used.
Time frame: 1 hour.
Indicators: none.
Trading setup:
For this Forex system to work properly a trader needs to know the basics of identifying swings high and low, rules of drawing trend lines, plus be able to use Pivot Points.
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No, it doesn't.
Regards,
Edward
Hi Edward,
You said "Once both trend lines are in place I set limit orders which would be triggered if price goes through any of the trend line. At that point I stop monitoring the charts." Where do you set limit order when the trendlines are in a angle and we don't know when they will be broken at which hour?
Thanks
Grace
Hi Grace,
Trend line are in angle most of the time, but I find it easy anyway to find a price level suitable for entries. Treat it as art, where +-3 pips won't matter much, your perception of the best entry price is important, after 2-3 days of practicing I'm sure you'll be comfortable with placing new entry orders.
It is true that I don't know when a trend line will be broken: several hours may pass without a breakout, and my entry order may be obsolete and not as accurate as before. I have a simple rule: if I happen to be around charts to re-adjust the entry order, I happily do so, if not, I leave things as is.
Best regards,
Edward
Hi Edward,
I am using ChoiceFx. It seems like the midnight bar is 01:00 am bar.
Could you compare it with yours and kindly highlight the 5 bars you are using?
I am in Est zone.
Thanks
Grace
Hi Grace,
Please send me a screen shot using our contact for below and we'll compare the timing.
Regards,
Edward
Hi Edward,
Firstly, I really appreciate what you did for everyone here. You shared simple yet valuable strategies some of which could be commercial. This strategy is amazing.
Just one question about VALID swing High/Low:
Assume that I had a VALID swing High/Low on Monday (I don't care last week).Today is Tuesday and there's NO VALID swing High/Low after 5 candles, so I cannot draw trend lines -> no trade on Tuesday.Is it right?
Next, on Wednesday, if I have Valid swing High/Low I still don't have trend lines because there's no Valid swing High/Low on Tuesday and I have to wait to see if there's valid swing High/Low on Thursday. If so I connect swing High/Low on Wednesday and swing High/Low on Thursday to make trend lines. If not, no trading on Thursday hence no trading on Friday either. Is it correct?
Hope you get what I am saying :)
Best Regards,
Keith
P.S : Do you still use this method?
Hi Keith,
thank you for your feedback, and yes, I continue to use this trading stategy successfully.
I think I know where there is a mistake in your example.
When you found a valid swing High on Tuesday, you don't need for another swing high to be necessarily on Monday, instead you have to scroll back as far as you want before you can identify a valid swing to connect with your Tuesday High.
Same for every other day: we are looking for a valid swing high in the 5 candle range, after that we scroll back seeking for a previous most recent swing high, which will be found regardless the time, day and proximity to our current day.
Best regards,
Edward
I'd like to thank you everyone for your feedback, support and questions!
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