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DanUK Aug 2, 2009 5:29pm | Post# 1

Trend Trading Chart Thread
 
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In light of recent discussions about suing everyone and anyone I felt I should just mention that the purpose of this thread is amateur speculation only and does not constitute advice or trade recommendations or any kind of training/education. Should you decide to follow and take any of the trades posted here it I will not be responsible for your failure or any losses you may incur in any way whether financial, emotional, real, or imagined. Should wish to trade forex (or any other market) you should ensure that you are properly trained and qualified to do so. Reading a forum on a website will not prepare you for trading.

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Trend Trading Chart Thread

After dabbling in Technical Analysis for about 5 years now I have come to the conclusion that the trend really is your best friend. I have tried various different styles of trading but for me simple trend trading has been the most profitable and least stressful.

I use only the most basic technical analysis tools: trendlines, support & resistance, round numbers and the fib retracement tool.

So here it is. I probably started this thread at a bad time considering most currency pairs are in congestion but the trend will return and meanwhile perhaps we should have a look at other markets…

Brief Strategy Overview

Zoom your chart out to about 300 bars. If the chart is going up then we are in an uptrend. If the chart is going down… you guessed it… downtrend. My only addition to this would be that I also take into account higher highs and lower lows in determining the trend and also watch out for the break of the major trendlines that could signify a change of trend.

We are always looking for a discount to enter.

Let’s assume we are in a downtrend. We wait for price to start retracing back up and use trendlines and the 50% fib retracement level to guide us to our entry point. We also use round numbers (i.e. .XX00 or .XX50).

Once we are in a trade simply place a trailing stop loss (currently using 100 pips on E/U and G/U… other currencies/markets will vary) and let the market take you out.

I have attached a chart that might help illustrate.

One more thing… in the past some traders have used a hedging strategy to try and offset the balance of a loosing trade. We don’t do that… in fact Jacko has developed his own “anti-hedging strategy” to help deal with loosing trades. The strategy is very simple and genius… if your stop gets taken out (you are at -100 pips) you wait for price to move at least another 50 pips from where you were taken out. You then place another trade (in the same direction as the original order) in the place you were taken out.

For example… you went long at 1.3500 (stop loss is 1.3400), things go bad and you get taken out at 1.3400 for a 100 pip loss. Now you wait… once price moves to say 1.3350 you place another long at 1.3400. Let the market pick your order back up in the direction of the trend and with a bit of luck and a pinch of salt you should recover your losses and maybe turn a profit! Note that you must be trading in the direction of the trend for this to work properly.

And by the way… there are no guarantees. You could get taken out a second time for a loss! If you do, take a 24 hour break from trading and then re-evaluate the situation before placing anymore trades.

Charts & Trade Ideas

So without further ado let’s post some charts and trade ideas. Any currency, any market… if you see a potential trade or just want to post some thoughts please feel free to do so. My ambition for this thread is to create another little Forex Factory mini-family/band of traders who can help each other out with thoughts, ideas and constructive criticism… kind of like the nice chaps over at the J16 thread do!

Let’s get started.

Regards,



Dan
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Interceptor Aug 2, 2009 5:38pm | Post# 2

Hi Dan
Sounds good, hope this one grows.

fxacs Aug 3, 2009 2:52am | Post# 3

Hello Dan,

It is very nice you started this new thread. I also hope this week we'll have some major changes in trend evolution.

IronDuke Aug 3, 2009 3:20am | Post# 4

Great idea Dan, I will be keeping an eye on this thread and contributing as much as I can.

NorthSea Aug 3, 2009 6:18am | Post# 5

hi

where is the first page of Jacko’s Forex House of Pleasure and Pain??

all best

GJP Aug 3, 2009 6:48am | Post# 6

Will be looking in with interest Dan.

DanUK Aug 3, 2009 6:51am | Post# 7

My mistake... I've added the link to the first post

DanUK Aug 3, 2009 8:24am | Post# 8

GBP/USD Chart
 
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To get things started off I thought I would share my most recent position (last week) on G/U.

Price didn't quite get to the 50% fib retracement level - if it did then I may have thought it a perfect setup! But we did get to the trendline and the 1.6350 support/resistance level.

As price came back up I went long at 1.6400 and closed out for +300 at 1.6700. If we hadn't been at the end of the week and if the market had been trending better recently I would have left the position open.
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Interceptor Aug 3, 2009 8:28am | Post# 9

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This has been one of my recent favorites.
Range trading can sometimes be almost as profitable as a trending market.
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DanUK Aug 3, 2009 8:37am | Post# 10

This has been one of my recent favorites.
Range trading can sometimes be almost as profitable as a trending market.
Yeah, using the right tools a range bound market can offer some great opportunities. I still prefer to be on the trend side of it though.

I was actually involved in a short on USD/CHF last week; 8 hour pin off the 1.0900 level. It was a very quick drop and hit my target long before I expected it to.

DanUK Aug 3, 2009 1:59pm | Post# 11

GBP/USD Chart
 
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Not sure if anyone is watching G/U at the moment but I will be watching the 1.6600 area if we start to see price retrace a bit.
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Interceptor Aug 3, 2009 3:30pm | Post# 12

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Not sure if anyone is watching G/U at the moment but I will be watching the 1.6600 area if we start to see price retrace a bit.
A good question on this pair is whether 1.6743 will hold on the retrace?
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DanUK Aug 3, 2009 3:38pm | Post# 13

A good question on this pair is whether 1.6743 will hold on the retrace?
Yep that's one to watch; coincides with the 38.2 fib level too. If it runs into trouble there we may not see 1.66. The only problem for me at that level is that the trendline is still a bit far away... unless it takes a while to get there!! I will be watching PA at that level though to see if there are any hints!

Interceptor Aug 3, 2009 5:17pm | Post# 14

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Similar sort of thing with the loonie and 1.0750.
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DanUK Aug 5, 2009 6:54am | Post# 15

Similar sort of thing with the loonie and 1.0750.
Looks like this one could be setting up now... have you got your trigger finger ready!?

moosley Aug 5, 2009 7:00am | Post# 16

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can this be a long setup according to Jako's rules?

1H
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DanUK Aug 5, 2009 7:07am | Post# 17

can this be a long setup according to Jako's rules?

1H
Hi moosley,

I am waiting for a setup on this pair but not at the current price. What price are you thinking of?

Regards,

Dan

fxacs Aug 6, 2009 4:29am | Post# 18

The EUR/USD keeps bouncing around 1.44. According to the D1 chart a retracement might be possible for 32.8 level around 1.4278 Hopefully.
If this will happen, at what price you might go long?

DanUK Aug 6, 2009 6:43am | Post# 19

Hi Fxacs,

I will be interested at 1.4300 or below - once we get down there I will be looking at how price reacts to the round number support/resistance levels in order to get my actual entry.

Regards,

Dan

moosley Aug 7, 2009 6:24am | Post# 20

Hi moosley,

I am waiting for a setup on this pair but not at the current price. What price are you thinking of?

Regards,

Dan
long @1.43 stop 42 trg 45


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