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-   -   Trendline breakouts (http://www.forexfactory.com/showthread.php?t=222729)

emacro Feb 25, 2010 11:37pm | Post# 1

Trendline breakouts
 
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Trendlines are significant in any timeframe.

3 touches of any trendline and subsequent breakout should see a retest of the breakout and then the start of another trend.

As of current time, eurusd on the 60 min sees possibility of a trend (in the 30 min timeframe) upwards from current levels.

Now that the 60 m trend is up how do we play it?

1 Enter on retrace to the breakout level or just above it
2 Enter 1/2 position now, then scale in when the market retraces to the breakout point.
3 Trading trends the stop loss should be larger 100 ticks and over. Just make sure $ risk is 2% of trading account. Aggressive traders can take positions 1 standard lot (100k) per 10K in the account.
4 The 18 simple moving average provide the risk parameters for the trade. If 2 whole candles close below this then it is time to exit.

Let's see how it pans out...
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emacro Feb 26, 2010 2:55am | Post# 2

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Pullback in eurusd provides the opportunity to get long.
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emacro Feb 26, 2010 3:55am | Post# 3

Entry points
 
ok, the eurusd has made its retracement, so the entry point can be anywhere between 1.3550 to 1.3590. Remember this is a trend trade, so the precision of the entry point is not as relevant.

emacro Feb 26, 2010 12:24pm | Post# 4

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Eurusd has reached a high of 1.3680.

Simetimes trading is not rocket science.... Any comments/discussion welcome.
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billbss Feb 26, 2010 12:48pm | Post# 5

ok, the eurusd has made its retracement, so the entry point can be anywhere between 1.3550 to 1.3590. Remember this is a trend trade, so the precision of the entry point is not as relevant.
How far does it have to retrace before you consider it a trade?

emacro Feb 26, 2010 1:00pm | Post# 6

How far does it have to retrace before you consider it a trade?

After a valid breakout of the trendline, the price should come back to retest the breakout price level or just above it.

Note that the long trade is still valid, unless the stop is hit or there are two bars below the 18 sma line. That will be the condition to exit. Remember that we are trading this 60 min trend. For trend trading there needs to be a lot more room given.

Have to knock off to bed now.(2am here) See you on Monday.

Cheers

kingfisher Feb 26, 2010 1:06pm | Post# 7

Great trades. I consider trendline as pure price action trading.

How do you determine the take profit targets?

emacro Feb 26, 2010 8:17pm | Post# 8

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Great trades. I consider trendline as pure price action trading.

How do you determine the take profit targets?
As one trader once told me, "Entries are dime a dozen and easy to execute, but the real money is made in the exit"

Since this is a trend trade (in the 60 min timeframe) we utilise a trailing stop using the 18 sma. 2 bars closing entirely below this sma indicates an exit. That way one can 'ride the trend'. But, it doesn't preclude you to take partial profits at 'psych levels' the 00s 50s etc... dependent on trade plan.

Cheers
PS I am expecting 1.3800 as a good level to close the trade...
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emacro Feb 28, 2010 8:07am | Post# 9

The next trade
 
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Now that the eurusd trade is in play, (hopefully it follows through) the next one could be cable (gbpusd). While eurusd was going up, cable dropped, watch the downtrend line...
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DonDoggy Feb 28, 2010 8:19am | Post# 10

EUR/GBP daily chart
 
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On the daily TF price maybe retrace back to the trendline - for a good long entry
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HVForex Feb 28, 2010 8:22am | Post# 11

Hmmm...It seems to be quite interesting. I will definitely check, whether it really works.

DonDoggy Feb 28, 2010 8:24am | Post# 12

USD/CHF 4h chart
 
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Another great trade opportunity.
My first target is EMA200 @ 1,0651
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DonDoggy Feb 28, 2010 8:30am | Post# 13

USD/JPY daily
 
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On daily chart trend is broken.
But i think price will retrace back to trendline for another short entry :-)
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emacro Mar 1, 2010 2:31am | Post# 14

On daily chart trend is broken.
But i think price will retrace back to trendline for another short entry :-)
Dondoggy

Thanks for the charts. Daily timeframe, of course is more reliable, but entail bigger stop loss.... but less whipsaw.

But keep the trendline charts coming...

emacro Mar 1, 2010 2:39am | Post# 15

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Cable 60 min chart, still a fair way away from the down trendline. However there is a daily gap + divergence... could be a good level for trade long (1.5000) but ensure the stop is in place according to your $ management.
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emacro Mar 1, 2010 4:21am | Post# 16

Eurusd long is still intact
 
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Without 2 closes below the 18 sma of the eurusd, the trend is still intact...
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emacro Mar 1, 2010 6:56am | Post# 17

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Looking like the long position needs to be exited soon.... according to the plan.
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emacro Mar 1, 2010 7:02am | Post# 18

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Possible trade to the downside if retracement towards the breakdown point materializes...
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emacro Mar 1, 2010 8:41pm | Post# 19

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The retracement takes eurusd back to the breakdown point, shorting into this area could be fruitful...
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emacro Mar 2, 2010 1:21am | Post# 20

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Cable 60 min chart, watching this trendline.
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