EUR/USD 5min - Trendlines and Pivots

Good morning. I am starting a new trading journal in the hope it will keep me disciplined. I will most most of my trades with charts as I go along.

I will only use TRENDLINES and PIVOT POINTS, and also MACD 12 26 7 as a secondary indicator.

I am looking for two signals.

Signal 1) A break of a trendline away from the trend on the 5 minute chart. I will wait for a close of the candle below or above the trendline and enter with a 15 pip SL. Patterns like triangles, flags, pennants are all good too. Target is 10 - 20 pips or known S&R.

Signal 2) A confluence of support/resistance. Any combination of pivot, known S/R or trendline. I will look for MACD divergence or crossover for additional strength. 10 pips is fine on this kind of trade. A trendline on its own is not enough for an entry.

Stops are moved to breakeven once in profit. I am only looking for 10 - 20 pips at a time, I will exit early at a pivot point.

I need to work on my entries and exits. I'm looking forward to hearing from other trendline traders as I go along, hints, tips & charts gratefully received.

For anyone interested in trading using these principles, you could do much worse than this thread: Trendline Break (The Only System You Need)

A refinement of my rules for entries and exits

A distinction between strong, good and weak set ups, and definition of a "trend line"

First trade this morning came within a half a pip of my target then took me out breakeven, c'est la vie.

http://i288.photobucket.com/albums/l...pes/chart1.jpg

Currently waiting for a break below this rising channel if it happens.

At the top of a bearish channel, but I will wait before going short.

Currently long on break of descending channel... looking for MR1

Out at 1.3870, done for the day, chart to follow.

OK here we go. Totals for the day, 0, -11, +22 = +11

Trade 1 was posted earlier. Trade 2 went short on the triangle break, went briefly into profit while I was holding for the daily pivot. Didn't quite make it and was stopped out the other side of the triangle. Trade 3 was a break of a longer term bearish channel. I jumped the gun and got in at a poor price (48) but the exit was spot on at MR1. That would have made a nice stop and reverse but I was not quick enough.

http://i288.photobucket.com/albums/l...pes/chart2.jpg

Looks like we're heading for yesterday's high at least (1.4ish). Which should be good for a quick short but I'm staying out.

Got a valid trendline break to go short around 13971, including divergence on MACD, but to avoid over trading I'm staying out. I'm not 100% convinced we've had the top of this bull run.

I find it useful to do a little post-session analysis to inform stop loss and take profit placement as well as to give confidence in your methods. Of course, hindsight is wonderful, and we would all be millionaires if we could take those hindsight trades.

The first green circle shows a confluence of trendlines and pivots, and would have been more or less valid. There is a retest of the top of a descending channel, the bottom of an ascending channel, and the stop loss could have gone a few pips below the pivot. Note that the steep ascending channel is not part of this confluence as it was drawn around 4pm.

The second green circle shows a breakout of the ascending channel. I only take breakouts when they are counter-trend, the theory being that the breakout is more forceful. This is not a valid signal in my method.

The third red circle is a valid signal, and the one mentioned in my last post. It is a good lesson in stop placement. I mentioned in my first post that the stop loss is 15 pips, however, this is just to open the trade while the stop is refined. In reality the stop should be placed a few pips above the trend line that it broke through. In most cases 15 pips is more than comfortable to achieve this, but when the channel is as steep as this, that stop would have been hit. So, the stop would have had to have been around 20 pips. However, I had my 10 pips for the day and I was not prepared to risk going into a loss so near the end of the session.

Another approach is to not trade the break, but to wait for the retrace to the trendline. This gives you the ideal entry (as it does in this example), however you can sometimes miss trades this way. Either way, this trade would have yielded 20 pips.

http://i288.photobucket.com/albums/l...pes/chart3.jpg

I do a ton of pre session analysis. Also a lot durring the weekend. It helps me get my head into the charts. Then I will always know where I am in the chart in light of the higher time frames. Have fun.

Rufus

It is definitely a good habit to get into.

I just took a measly 1.5 pips on a trendline break short. I didn't like how it was going as there was a potential bull flag too. Waiting for the next opportunity. Charts later.

Well, it came good for +20 pips so my fears were unfounded. Angry I missed the trade. Going to walk away from the screen and come back later.

http://i288.photobucket.com/albums/l...g?t=1287655201

Currently short on a triangle break from 27, I will move my stop to breakeven quite fast on this one.

Stop at breakeven and holding short. Aiming for around 20 pips.

Closed at 12 for +15, finished for the day. Don't want to be in the trade for unemployment claims. Chart to follow.

OK, here's the chart. As you can see trend lines are everywhere, and the chart is a bit of a mess, but that is just my style of trading. I like trend lines! It took me all morning but I am happy with my discipline and the fact I haven't taken any losses today.

This was a simple triangle break which is a great pattern to look out for. They happen almost every day. The danger is they can break one way then straight out the other side. Since the stop is tight (about 8 pips here), you can stop and reverse on these occasions.

I had 1.4 as my original target but I figured this was too greedy, so I moved it up to 1.4007, which would have given me my 20 pips, but I decided to bail before the news. No more trades today.

Daily total: +16.5

http://i288.photobucket.com/albums/l...g?t=1287663842

I would normally consider a long from here as there is a confluence of support but I will not over trade.

In fact, if this 5 min candle closes below 82, it could be a great short. Again I am not taking it.

Head and shoulders and a trendline/neckline break, this is screaming out for a short. Difficult to resist but I'm still staying out.

http://i288.photobucket.com/albums/l...g?t=1287666650

Glad I didn't take that set up after all. It would have been stopped out.

Took a quick +5 scalp. Daily total : 21.5

http://i288.photobucket.com/albums/l...g?t=1287674992