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Stupidly Easy Trading - Trading Blog

!!!!!!!!!! UPDATE !!!!!!!!!!!!

So to all of those who might have read the original post here, I have come to a conclusion and finally understood what am I actually seeing and wanted to share this with you. Basically the Title is the same STUPIDLY EASY! And I am putting all my efforts not to call it this system as that.

Let me put things right and ask you to SKIP!! all posts until Post #15 - and based on what you read HERE! check those pictures as well and you will see what I mean.

So BASIC! rules which applies to every where and these basic rules will be our main guides.

An UP-Trend is always followed by? A Down trend right? And Vicaüversa. Down-Trend is followed by an Up-Trend.
Now here comes the most important Fact we will EVER! need. A trend alawys breaks.


In my opinion, most people fail to understand when and how a trend can be drawn. I believe, when I draw a trend line, that trend line must cover everything. Which means, it always goes on the wicks, and always have only! 2 points.

Let me show you clean and not too clean examples.

If you check the EURUSD Monthly chart, this is the actual picture that everyone should see:


The trend has a starter point and a 2nd point which are interconnected and it covers everything inbetween and it has ben extended towards the future.

Now what is not visible at first is how we got here. I will show you how this trend has evolved over time!



So in this picture you can see that the very first trend line was drawn as shown, which trendline got broken, and then the trend continued to make a new low, then the second trend got broken and continued down forming the third current Monthly main trend.

Now forming any of the new trend lines can be concluded only! if the previous trend's all time high or low depends on the trend gets broken. Here the green lines mark the spot.

Now comes the question, how come that a trend contionued, where as the actual trend line was broken? And also the question comes, how can we trade this??

Let me show you my understanding on how this can be traded easily.

A full trend break would happen ONLY! if the 2nd leg's price geats broken. Failing to do so, the trend will continue making newer lows or highs.



On this image, you can see that the Orange lines were not broken, at all. So our best guess was when it started to come down, is that if it forms a new low, we know where the price will be going right? Towards the previous green line. Anywhere below that green line, is a good chance to aim for a trend line break. Which means, that the trend full filled its main purpose and validated it self by creating a new low, so from there, the next thing to happen is to get it break. Hence we are aiming for our trend line. We might not get to the orange levels, but we also know, that the trend line won't just be touched, but must be crossed. So Good profit can be made on this guess, and the best is, we can actually automate this.


Leave a pending order in the green zone, set an alarm for the trend line break, and you can forget the pair for good.

Now What you see is a really interesting scenario.

Our current main trend has been validated and made a new low, so the next step is to break the trend line. We had a strong bump off, but eventually that is the goal.
Our first goal is to have the the price above the trend line and get some profit. Now the only place for entry has been passed, any where this close is a bit too risky reward ration wise, so I don't recommend it as a long term investment.

Now this is a monthly chart, but this setup works on every time frame and every stock, forex,crypto chart. I will share some examples.

Using the same colours, should give you an explanation on what I am seeing and how thes can be traded.

Please continue on Post 15!!!

AND AS ALWAYS - YOU TRADE ON YOUR OWN RISK

Progressive trend is when, we set up a trend line, that gets broken, but the correction does not reach the 2nd Leg of the trend, so it makes a newer high, then we adjust the trendline, and the correction will be its 2nd leg, and our new trigger point.



Here it was the 4th correction that appeared to be the final one that actually broke our 2nd leg, and we could trade in that red box. Anywhere in that box is a good short until the bottom of that area. I am planning to make more entries for such areas, maybe split that new move to 10 slots and divide up my trades to incrementing lot's and the further it goes into that box, the more trades I will have and the higher lot size until it gets to the expected new low.

Here is another example of progressive trend and how to trade it.

Another good example of these type of trades.

Another good example:

Same, This one was pretty nice:

So far USDCAD is in the good direction:

I don't see trades so far that I would happily make so I think this is it for today, let's wait out for TP and try to find other opportunities.

I forgot to mention, I think 1H is the best time frame or anything above like: 1D 1W - below the hourly chart is too small to trade and the spread might take most of the profit, but this USDCAD is pretty decent move to trade.

Thanks for your sharing. I dont understand complete how you put the horizontal line. Ist it the first LH for example in an uptrend? Thank you.

the horizontal is like the second leg of the trend, but I use the swing close I fee it better than the wicks.

Ok, will study it.

So technically, I am stopped out on the USDCAD, however I am certain we will get to the marked level, so I will keep an eye on it, why I am certain? I have checked a couple of pairs and different time frames and these always get filled. For example, on one of the paris I check often USDHUF, H1 chart the first 100 formation ended up with 96% instant successrate, I mean without SL hit, the other 4% was Stopped out, but later on, within reasonable time (few days, max 1 week) the TP level was reached. Most of the times I guess news, might have made an entry point, and those extreme candles needed to be corrected before the trend could continue. So, I would say with a 96% successrate, its still okay ish.

I am trying to compare how much difference it makes if I use the wicks for Trend lines or if I use the closure point.

I am interested in your thoughts, since my dilemma is:

- wicks cover all data in that timeframe
- closure would eliminate "noise" caused by news"

Any better suggestions are welcoem, and I am happy to look through them and I can post my findings

Here is what I mean:


Using closure as the trend line drawing, a progressive trend would appear where on the 2nd stage it gets a nice entry and eventually a TP for the given area, but consifering the stop loss, it would be stopped out before it gets to the TP level.



Using the Wicks on the other hand would not make an entry at this time:



Either the Stop needs to be higher? Which would make it more risky, or using the wicks for an entry.
However I have examples for the reversed case too, where if I use the wicks, its a trade that stops out with closure it would be a good trade.

I was wondering what if I should find the trend killing signal in a different way?

Let me know your thoughs or suggestions.

well, mate...i went on your threads...i like when people have ideas. So thats that.
I see that you also like lines/trendlines. Thats ok of course.

I am strong believer in rules. If you can write solid rules for this kind of activity, then all is different. But here i see lots of subjective reasoning, which is fine, just not my playground. If you see yourself wanting to go on the road of systematic ideas (each step rule based), then Iam all in.
Secondly, keep on.

So this is the UPDATED! post:



Here is a new example on the GBPUSD, As you can see we have passed the entry point and had one month where the chances were really good to step in. However that is passed now.

I can imaging that the prices goes back and continues to make lower lows, but in any case those will be our entry points to attack the trendline.

I will pick an example to show you how a trend change looks like.

You clearly identified a downtrend.
why are you buying instead of shorting with the trend?

I have zoomed on to this one to show you what it looks like if your trend is based on two candles!



This is the USDCAD, and here is the big picture.





So as you can see here we had a trend line brake, but had no real time to enter yet. On this front as long as the orange is not broken, we can not conclude that the down trend has truly ended. Even if it makes it to the orange, from there our aim will be the new trend line at the bottom, so right now on a long run, the USDCAD, is more likely to go down. Why? If it does not break the Orange line, it will have to make a new low, if it makes it to the orange line, then it has to come down to the trend line.

Of course this is a monthly chart, so this won't happen over night, but if you have long term intrests in some currencies, this is a way to figure out if its a good investment or if it is worth to swap it to something else. At the moment, no I would not trade it on the monthly basis. But its an indication what to expect

Now here is an example of a trend change.

Attachment g

This is the Oil. So as you can see it has made a new high, the uptrend line has been broken, we are really close to breach the orange and conclude the end of the uptrend, finalizing the new down trend. My expectation is that the OIL will dropt to 60 Dollars and we can finalize the down trend. Otherwise it rises up to the heavens, which I don't see likely to happen. The first RED arrow in that green box shows, what were the best time's to sell OIL stocks if you had any, as in those months it was well over priced.

Now as you can see, we don't need indicators or anything as such to determine when and how to trade.

Also I am sure you are here for more frequent trades, so let's look into the FX market at a lower time frame.

Now I will try to show you, how to "avoid" bad trades, which are likely to happen mostly on lower time frames.

This is still a larger time frame, but compared to the monthly for long term investments, this is pretty fast and likely to give more changes, sometimes false ones.



So this image shows that the first are, on a random time of entry would end up on a disater, as the trend line goes above our entry point, which means the likelyness of exiting in profit, is almost zero.

So, here is the deal how to minimize the likelyness of this happening and get something like what we see on the 2nd entry.




I have zoomed in to this random entry, to show case why this is a bad entry, I marked the current uptrend with Blue, as that line would have been our target. Now if we ever want to break that blue line, we need to have a confirmation that there is a true Down trend happening right? Something that actually brings the trend change.

Now as you see I started to draw the down trend lines and found that the 2nd point of the actual trend has broken, which is likely to happen on long going trends, these can either make a new high, validating the original trend's continuation or it won't make a new all time high, and finally break the original trend, and giving us eventually the new trend's two points.

In any case, when we see such cases, the best is to wait for a new top to happen which we now know for sure where will be at minimum and place your shorts there. Anywhere above the 2nd red arrow is an awsome entry to attack the blue line.

Now as you see I placed a white trend line on the suspected new Top, which is so flat, that it gives us the best money maker thing in the world. Since it is so steep, it is likely that if you are far from it your entry point will be legit for ages before this flat trend line reaches your entry point, and if you check how far the previous Orange line is, you realize, we are likely to have a new TOP, and not getting to the orange zone.

So after the blue line break, our best chances to go for a new top and get some good money. Eventually, it happens, we get a new 2nd leg for our final trend, which finally get's broken.

So this is a good way to skip a bad trade. I will post later some more examples on how to skip bad situations.

To continue on this par there is a good example on a risky situation.




So the screenshot, shows that we had a down trend forming, which was really steep, and it had a continuation right after the first trendline cross. The thick white line is the final trend. As you can see it was crossed, at the time when the price went below the thick white line we could draw a proposed new trend line. Which is proposed as if the trend continues to make a new low, it will be the new main trend line. However, the proposed line was crossed, before making a new low. That was our point of entry. Our TP was the orange marker!

When we hit the orange marker, we already had chance to draw the new uptrend's line. As you can see the new uptrend is based on 2 candles. This is an awsome example on how a trend can form. Now for this the most likely situation is that the price will cross this trend line, and will eventually make a newer high. The reason is that a proper trend should form with actual swings as "legs" for the trend. Even tho we use 2 candles as point 1 and point 2. It is still a trend to be formed.

As you see with the gray box, there is a huge up swing, that gets broken and finally we can draw a new trend line.



Technically anywhere within the blue triangle was a good chance to trade for a new high TP as the Green marker.

Reaching the Orange marker, was a safe confirmation to to enter a trade towards the green line. But our best chances were in the blue area.

Finishing up the EURUSD reveals, the following:



As you can see the new trend line that was formed using the low in the blue triangle, gave us two things to know. A new Orange marker for TP, and since we got the green marker reached, anywhere above the green line is a good entry for sorting towards the orange marker, or safer to the new trend line.

I would say the orange marker is a better option as it is really close to the trend line since the trend line ended up being pretty flat. And the flatter the trend line the best to trade it.

The orange marker was reached, and now we have a new down trend, formed the same way as the previous trend. The point 1 and point 2 are on candles close to eachother and not used on swing tops and lows. This means EURUSD must now aim for the white trend line. So In my opinion, the USD will be more bearish for the coming months, and we will see some up moves, then reaching the trend line, will identify a new Down trend, which will need to continue going down.

So what ever will be our turning point, will be our new target. So in short, prepare for trend change now on the EURUSD, after reaching the trend line, short the EURUSD to the previous low and make a good profit.

The reason is simple. After we make a new Low, there is no real target to reach in this trend anymore other than the trend line, as the price always has to get back to the the trendline.

The best chances to short with the trend is close to the trend line. Forexample, here:



We have a major fall, the orange marker for the trend line is so high, it is not likely that we will break it in one go. I would say as predicted with the green drawing, if the prices crawls back above the trend line, short it to the prevous low.

This is going to be a good trade, because once that trendline cross happens, we will have a traget to aim for right?

Because now you could say, let's short this... But for how long? What is your stop? Right?

I will show you what would be my ratio here and where I would step in:



That is close to a 1:9 trade if the price would turn around from tomorrow. With that trade, we have a really good chance to step in and trade with the trend. Because as long as the original orange marker is not crossed, we expect the trend to continue. Escpacially if we are this far away from the orange marker. It is more likely that the trend lines will break multiple times "bringing" the trend braker orange marker closer and closer to the bottom.

Like here:




Blue lines are the counter trends which could have or which eventually could change the trend.

As you see the first trend line was really steep, so it was likely that if its crossed it will make a new low so there we had good chances. The second attempt to break could have been drawn only after a new low aws formed.

My Favourire is the 3rd blue line, when every you see a full or nearly flat trend, that is the absolute easy money. As anywhere above that is a good to sell zone. Of course the best place is above the white trendline where I marked it. But that is truly EZ money, and yes I trade these and yes they bring good money.

The 4th one gave an ice entry too, but as you see, once the trend line get's crossed, we need to draw the counter trend to see, if up trend continouse what are chances are.

So we had a nice cross, on the blue line as well, also its orange marker was broken, so it was a near perfect setup, the only reason why we are careful is this, the more times the original trend get's compromiesd, the more likely it will eventually change. I know its a bit zoomed out, but if you would try to draw the same pinkis thend line on the previous counter's you would not get them crossed before making a new low. Here it did, which is a strong red flag to quit trades. Since it happened and we were close to the orange marker on our last white downtrend line. It could have been the trand change indicator.