Advanced system #5 (Trend Lines Breakout System)

Hi Edward, thanks to you and everyone who has contributed to this thread, this appears to be a very strong method indeed. I have just started looking at it this week and have attached a screen shot below of today's EURUSD so hopefully you can confirm whether I have interpreted this correctly.

If possible could you please also confirm that you had the same pivot levels as I have shown? I based them on the open/close of GMT-5 hours so I hope its right. If they are indeed right, then I assume in this scenario you wouldn't close at PP as profit would be to small, but rather wait until the market hit R1, which luckily enough was just within the 3 bars.

Hi Bhanu,

For trading with daily charts, have a look at advanced #1, 3, 10 and 14. Pick the one that reflects your type of trading and work from there.

Best regards,
Edward

Hi Edward
Thanks for you reply. I have taken printout of both these books from the website and have studied them. It was eye opening indeed. I must compliment Jeff Boyd for writing his ebooks in such a wonderful fashion. So simple and precise. Thanks a million Edward. By the way I would like to trade on the daily chart taking a position for a few days at least. Could you please recommend a system from your list to safely enter and exit. You could also give your most valuable suggestions. Thanks a lot Edward.

Bhanu Gopal

Hi Bhanu,

I'd recommend 2 concise and simple ebooks by Jeff Boyd, which would be more than enough to start using my strategy:
Forex trend line book
Forex pivot points book

Regards,
Edward

Hi Edward
This is follow up to my earlier query. I have found that there are free ebooks on your website that provide info on the essentials of trading. Are these books sufficient to provide me with the knowledge I require to trade with Advanced Strategy #5 or do I need additional resources? Thanks again

Bhanu Gopal

Hi Edward
I'm new to forex. I've been going through your site and found it very useful. I would like to use this method for my trading but need to know essentials as you have mentioned.
"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."
Please let me know where I can pick up this knowledge.
Thanks

Bhanu Gopal

Hi IrSJWoo,

you've nailed it! Except that there was an uptrend line today.

I'm attaching screenshots while fresh :)

Same breakout, as seen on 5 min time frame:

Regards,
Edward

Dear Edward,
Thanks for your quick and clear reply. I want to verify this with an example concerning with today's trade (I'am from the Netherlands with timeindication GMT+1). Today there was only a downtrendline, at 0:00 EST there was a swinglow with a low at approx. 1,4564 and at 3:00 EST there was a swinghigh at approx. 1,4634. The nearest valid swinghigh was at 27 september at 19:00 EST. The downtrendline was broken at approx. 4:34 EST at approx. 1,4619 so at breakout our initial stoploss position would be at the nearest swinglow, since there wasn't a uptrendline today, which would be at the afore mentioned price of 1,4564. Our initial stoploss position would be at SL(init)= 1,4619 - 1,4564 = 55 pips. Afterwards when the breakoutcandle closes with a low at 1,4604 and at close at 1,4628, we reposition our stoploss 5 pips below the low, so our final stoploss price would be at 1,4599 and our stoploss would be SL(fin) = 1,4628 - 1,4599 = 29 pips, am I correct ? I would like to thank you and all the contributors to this wonderfull website, it's really a inspiring and instructive website for everyone who's interested in trading forex.

May the force be with you,
IrSJWoo

Hi IrSJWoo,

Good point, thank you!
Since the stop loss for this strategy needs periodical adjustments, there are various trading situation that can occur.

Timing is a key factor. If a candle breaks in its early minutes (e.g. 5-20 minutes since creation with more than half an hour to close), it is risky to set SL behind it. I put SL outside the opposite trend line (if no trend line was drawn, then outside the nearest swing high/low) and then, when the breakout candle closes, I move SL just behind that candle.

I agree that switching to a smaller time frame could also give us an opportunity to enter on a re-test of the broken trend line. However, for this particular breakout strategy, rather as an exception, I use an immediate entry strategy upon the breakout. But even then, we can still add up one more position using your recommendation of a trend line re-test entry on a smaller time frame. Thank you!

Best regards,
Edward

Greetings Edward,
I've a question about the position of the stoploss. Suppose the candle that breaks the trendline is for example the 6 am EST candle, suppose furthermore that this 6 am candle breaks the trendline at 6:04 am EST, so it breaks the trendline near its openingprice. At this very moment you put your stoploss position a few pips above or below the candle that you see on your screen. But this 1hour candle has still 56 minutes to go before clossing, so in the meantime it can move up and down. So in this case the probability that the candle moves beyond the initial stoploss position is quite large. On the other hand if the candle breaks the trendline near its closingprice than the chance that your stoploss position is hit is much smaller. So there's a timingfactor of when the break take's place, near the close or open of the breakingcandle, which could be important considering the position of the stoploss trigger. So I would suggest to switch to a smaller timeframe in order optimize the stoploss position or even when to enter the trade (looking for a retracement and a bounch of the broken trendline ?). Please give me your thoughts about my comment.

Kind regards,
IrSJWoo

Hi Dan,

in London we have GMT,
in NY -> EST (or GMT-5)

So we add 5 hours to EST to get London time:

00:00 to 04:00 EST

will be

05:00 to 09:00 GMT

Regards,
Edward

Hi Edward,

I live in London and i wondering what would be the correct time for me to use this system. you mention midnight to 4 am EST. what would that be in London time?

Thanks

Dan

A breakout is definitely around the corner. However, the ceiling - resistance appears to be holding well. Plus MACD has been showing divergence for quite a time now.

Break of a larger daily wedge /triagnle in AUD :) several retest on inclined support. Looks like we aussies should be long soon.

Regards,
Raju

Cheers Raju