Advanced strategy #10 (Trend Line Trading Strategy)

typo error & correction to the previous statement: i WILL post examples of winning trades & losing trades as well as per the trendline trading strategy. Regards Myronn

Found it, thank you :)

Hello all,

I have posted an example of a recent trade entry as I will be posting more examples of trades that I actually take using the strategy in my demo account. I wont post examples of winning trades and losing trades as well.

Regards

Myronn

Awesome,

I am glad to to see somebody beginning to successfully use this strategy.

This strategy can be applied to trading stocks, futures, commodities etc. the principle is the same.

Cheers

Myronn

Hi Myronn,

I have made profit of 1100 U.S.DOLLARS today on Nifty i.e. Index of National stock exchange using this strategy. I Short sold Nifty (contract size 500) using your strategy.
Thank you very much for this strategy.
Thank you. Thank you. Thank you.

Hi Marius,

answer to your question with setting profit targets:
yes, you can set profit targets using previous swings on the 1hr timeframe OR you can switch to the lower 30 min timeframe to set your profit target. Remember to set your profit targets inside and within the swings and not outside because these high/low swings act as support & resistance and price can bounce back and not hit your profit target.

the concept of switching between higher timeframe to a lower timeframe for setting profit target also applies to setting stop loss as well. This is exactly what I do. For example, If I enter a trade on the one 1hr chart and the previous swing for placing a stop loss is like 200pips away from my trade entry point, I know I cant afford to put a 200 pip stop loss on a $5000 trading account trading a standard contract. So I switch to a lower timeframe and find a previous swing that maybe 30pips away and that would provide a good place for for me to place my stop loss.

Note that when you are using larger timeframes, like the daily timeframe,4hr, or 1hr, you cannot place a 10pip stop loss (used as an example). You must give price enough "breathing space" as i call. Use stop losses according to your money/risk management rules.

the 2 examples above on the daily and 4hr charts serve as illustration purpose explaining the trendline trading strategy. I use the 1hr & 30min timeframes for my trade entries but I do keep an eye on the daily & 4hrly charts as they show me the bigger picture.

Hope this helps.

Cheers

Myronn

Hi Myronn
Grateful for your detailed explanation. Got it :)
One more humble question, please: this time about profit targets. Same trouble: I enter on 1 hour chart, do I look for a previous swing on 1 hour time frame?

In your examples the charts are 4 hour and daily and profit targets are chosen accordingly. Were those entries taken on other than 1 hour chart?

Thank you!
Wish you all the pips in Forex :)

Marius

Hello Gregg,

3 good questions, i try my best to answer them for you.

(1) if u get the trend for daily,4hrs,1hr, will u just enter the trade? or u wait for something else?
Answer: Drawing trendlines helps me spot the trend in the market and I know that as price nears that trendline, it does two things: it bounces off it & is made to follow/obey the overall trend direction or it intersects it and that can signify a new change in trend direction. I place my order as described in the strategy. there is nothing else that i wait for. Pls note that I advice not to use MARKET ORDER entries when prices near the trendlines because ANYTHING can happen there. it can break it & or can be made suject to the trendline. You place your stop orders with the CONFIDENCE that IF THAT TRENDLINE HOLDS TRUE, PRICE WILL MOVE IN THE DIRECTION OF THE MAIN TREND AGAIN. so you do not have to chase chase it, wait for it to come to your stop order.

(2)and which currency pair best suit the strategy
Answer: any currency pair that is trending. stay out of trading if you cannot clearly identify any trends in whatever timeframes you would like to trade at.

(3) what will be your next step if a candle just break your trend line, i mean will you have to wait for the trend to grow long to have a new and opposite trend line or what?
Answer: There will be candles breaking or intersecting the trendline(s) trying to head in the opposite direction to the main trend. many times, these breakout will be false and will eventfully come down and obey the trendline that is why you have to wait patiently with your stop oder on the first candle the intersects the trendline. However, if the trendline is broken and a new higher swing high and higher swing low is made that may signify an uptrend. opposite for downtrend: new lower swing highs lower swing lows. when that happen, cancel whatever stop orders you may have and draw tredlines with in the direction of the new changing market condition and wait for price to come to the trendline(s)

Hope this helps.

Cheers

Myronn

Hello Marius,

good question.
Regarding entry, I prefer to use the 1hr & 30 mins for the entries.

For stop loss, allow me to give an example here:When I place my sell stop order in the 1hr timeframe, i search for the previous swing high also in the 1hr timeframe and put my stop loss just 5 pips above it. If the previous swing high is just above my entry and my stop loss would be like (20pips) placed just above it, that is good. Ok,the issue is: what happens if the previous swing high is about 100 pips away(that would mean 100pips stop loss right? Can you take that or not? Depends on your risks tolerance & money management rule. When it violates my money management rule, what I do is I switch to a smaller timeframe and that would be the 30min. In there, I look for swing highs that would be much closer to my entry point and and with stop loss that fits my money management and that is where I place my stop loss just 5 pips at least above the previous swing high in the 30min timeframe.

Thats how i do it and i hope you all will experiment and see what fits each one of you individually as traders.

Remember, wait for the price to come to the trendlines before taking any trades, dont take anything in between the major trendlines. Patience is the key.

Regards

Myronn

Hi Myronn
Thanks for this great job........u definitely did well here..what i want to ask is that if u get the trend for daily,4hrs,1hr, will u just enter the trade? or u wait for something else? and which currency pair best suit the strategy finally what will be your next step if a candle just break your trend line, i mean will you have to wait for the trend to grow long to have a new and opposite trend line or what?

Bravo Myronn

Regards
Gregg

Hi Myronn

That's a power strategy! Thanks a million!
As I understood, all your entries are taken on 1 hour timeframe. Is that correct?
May I ask, how do you determine what swings to use (daily, 4 hour, or hourly) for setting stop losses?
Does it depend on the trend line being hit... Or am I mixing things up... Thank you!

Cheers,
Marius

Hi Myronn,

Thanks you very much for your quick reply and detailed answer for my question.

Happy trading,

Regards,

Arsalan

Thanks Arsalan,

pls contact me at myronn_s[at]yahoo.com and I will send the indicator to you.

You really dont have to use the swing zz indicator at all in this strategy. But it does make it visually easy for me identify swing highs and lows in the past and based on that draw trendlines.

In answer to your question regarding substitue: the concept of this indicator is very simple, it zigzaps between swing highs & swing lows and if you had to do without this indicator, all you have do do is you draw trendline(s) connecting significant peaks in a downtrend & connect significant lows in an uptrend. the high and and low peaks are easily identified on any chart. At a minimum of 2 "peaks" or 2 "valleys" is required for you to draw a valid trendline. A line of best fit is usually required if you have 3 or more points to conect.

Hope this answers your question.

Yeah, Ausie,,,lol, dead giveaway huh? where else will you find bigpond...???

Cheers

Myronn

Hi Myronn,

This strategy is amazing ,hats off for you buddy.I just want to ask you that i do not have swing zig zag indicator so is there any other substitute?I mean is there any other way to identify swing highs and swing lows ?I hope you will reply soon.

BigPond wireless broadband hmmm... are you from Australia ?

Happy trading

Regards,

Arsalan