Advanced system #5 (Trend Lines Breakout System)

Hi Markus,

There are no limits of how far back a trader can scroll the chart to find a valid top or bottom to draw trend lines from. On my charts I zoom out as much as I need till I find the right point for my trend line.

I've tried this strategy on yen crosses. It worked fairly well, still EUR/USD and GBP/USD pairs were the most accurate here.

Happy trading!
Edward

This strategy looks interesting to me and I appreciate you trying to help fellow trades. The one question I have is basically u draw the trendlines at 5am est time and then wait for a breakout...where I get confused is how far back to u go on the chart to draw the lines from? Looking at the eur/usd right now I can see a uptrendline fairly close but in order to draw a downtrendline I would have to go many hours back to find a higher high then the current price. In this situation would you not draw a downtrendline and basically only trade a reversal to the downside?
Thanks in advance,
Markus

PS...has anybody tried this on any other pair? especially wondering about the yen crosses?

I haven't faced that situation till today. I did re enter twice in the opposite direction after I got stopped out. Those were successful trades. As you fell giving it a try is worth it, I shall try that on one of my demo and see. I shall let you know the results. Thank you. I really appreciate your willingness to help others.

krishna

No, I wouldn't enter twice on the break of the same trend line; e.g. when we sell and later got stopped out, we don't sell again.
I only look to place an opposite order - buy order in this case - if the other trend line is broken.

That's the exact rules I use. I don't enter twice in the same direction. How successful were you with such re-entering? Please feel free to comment, propose, advise - I'm always glad to hear your feedback!

Regards,
Edward

Hello Edward

I have a small doubt. If we get stopped out you said we can enter trade if the other trend line is broken. But can we re enter if the same trend line is broken again. For example, we enter a sell trade as our trend line is broken. But we get stopped out. Can we enter into another sell trade is the same trend line is broken again after some time. Thank you.

Hi Krishna,

There are many opinions about the right and best time based on which pivot points should be calculated. There are at least 4 known to me ways to calculate pivots:

from midnight to midnight local time,
from midnight to midnight New York time,
from New York close to NY close,
from London close to London close...

Trader's opt for the time they like. Again opinions here are different. I use NY midnight time.

You are welcome!
Edward.

Hello Edward,

I read that pivot points are calculated according to the close of the New York session in babypips. But in a response above you mentioned that they are calculated according the close of each day. Which one should I follow? Should it be the New York session or midnight to mid night each day. I hope I am not bothering you too much. Thank you.

Krishna

Hi Krishna,

If we got stopped out and later found another trend line breakout in the opposite direction, we can enter again even when in our previous trade we had a loss.

Fixed amount of pips for either stop or profit doesn't provide much flexibility in a trade while this Forex system has all the rights to have it. Therefore, my choice is to target Pivot levels or close after 3 hour (3 candles) of trading and set stop loss above/below a breakout candle.

Best regards,
Edward

Hi Edward,

Another one from me.If we get stopped out and our other trend line gets broken, can we enter trade accordingly or if we have a loss it is thats it for the day? Also can we trade 30 pip take profit and 20 pip stop loss. Do you think this conservative approach is fine or you think the 40 pip profit or next 3 candles and top of candle stop loss is much better. I shall value your advice and follow that. Thank you.

Krishna

Well, I got stopped out Edward! Thats fine and I learnt a lot. It was bound to happen sometime. It gave me winners for 10 straight days. This is the best trading system I have ever come across. Thanks a lot. This is what I want to ask you. If we get stopped out and our other trend line gets broken, can we enter trade accordingly or if we have a loss it is thats it for the day? What I also found out was that if we had a 30 pip take profit and 30 pip stop it was more consistent. Do you think this conservative approach is fine or you think the 40 pip profit or next 3 candles and top of candle stop loss is much better. I shall value your advice and follow that.

Thank you.

Krishna

Hi Krishna,

If a candle broke our trend line this means we had our position filled. By that time we couldn't know if a breakout candle was going to be a Doji on the close...

Once it closed, we don't want to exit our trade after only 1 hour of trading just because we got scared of a Doji. I wouldn't move my stop to breakeven, however, some traders may find it reasonable.

Trading can bring a lot of surprises, sticking to the rules when you are confident in your Forex system is always rewarding.

Profitable trading!
Edward.

P.S. Don't be sorry for asking questions. I'm always glad to help you and everyone here.

Hi Edward

I am sorry if I am asking too many questions. I encountered with the same problem that I faced yesterday with simple break out system. The 1 hour candle which actually broke the trend line turns out to be a Doji. When the candle violated the trend line it looked a good short signal. But after a hour time I find it a doji. What should I do then? If you like in Europe maybe you could check it out too. The 1 hour candle before this hour is a Doji. Thank you.

Krishna

Hi Krishna,

Quite often a couple of hours after a breakout is enough for the market to demonstrate its potentials; in such cases I enter a trade without hesitation.

You can tighten your stop if you feel that news may turn the market against your position or exit just before the news time. When I have 3 hours till news release, I wouldn't be concerned about news at all.

News aren't always bad friends, they can also help making higher profits. Therefore, I'm always in the market when I have an opportunity to trade breakouts.

Regards,
Edward.

Hi Edward

Can we use this method if we have a big news release coming up? For example we see a trend line break and we enter into a trade accordingly. But we also know that after a couple of hours an important release is coming up and we do not know how the market is going to react. How should we tackle this situation? Do we still enter the trade or just not trade for that particular day.

Thank you

Krishna

Hi Nightfox,

Your questions are easy to answer.

1. Trend lines intersection does not play any role in this strategy.

2. It is absolutely fine for trend lines to be almost horizontal or even absolutely horizontal. This indicates that a distinctive support/resistance level is in place, breaking through which will create a strong move.

Keep trying, you will succeed!

Regards,
Edward.