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Follow the trend!

  • #61
  • Apr 9, 2007 4:22pm Apr 9, 2007 4:22pm
I've recently started drawing horizontal lines on zoomed out charts looking for support and resistance. Looking for old support becoming new resistance and vice versa. Also thinking of S/R as zones rather than finite points. I'm finding it very helpful.
  • #62
  • Apr 9, 2007 4:56pm Apr 9, 2007 4:56pm
yea horizontal lines i have down, but i dont think they are to valuable.. maybe that "zone" theory you speak of it worth looking into..

im still confused about drawing trendines.. (questions is spelled out in my last post if anyone is willing to help shed some light for me)
  • #63
  • Apr 9, 2007 5:14pm Apr 9, 2007 5:14pm
Hi,

right now I'm more than ever trying to simplify my system. In other words this topic is exactly what's on my mind (candles, trendlines and fibo).

Please correct me if I'm wrong, I'm not used to trading just trendlines with only major S/R levels, would that be bad to trade at red arrows considering that the channel is getting formed at red line? Now it's obvious what it would be a great idea but when the channel is forming? What would be your advice. Wait for next candle after touching the channel or what? How long should I wait to confirm braking off the daily uptrend Is the channel itself correct or it should cover heights and than only sell bounces of it?

Best regards
K.I.S.S
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  • #64
  • Apr 10, 2007 5:48am Apr 10, 2007 5:48am
Quoting FXSurfer
That sounds great, Nader!
Your methodology using hand-drawn support and resistance lines,
hand-drawn trend and channel lines and trading breakouts using
your BRAIN as the "indicator" seems PERFECT for this thread!

Can I get a witness, fellow thread-goers!

RAGE AGAINST THE TRADING MACHINES!
(okay, that was probably uncalled-for )

FXS

Thanks a lot my friend....You asked for a chart, attached is a chart of my recent position mentioned earlier in the thread...


Thanks,

Nader
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  • #65
  • Apr 10, 2007 6:09am Apr 10, 2007 6:09am
thanks, Nader.

Quoting narafa
Thanks a lot my friend....You asked for a chart, attached is a chart of my recent position mentioned earlier in the thread...


Thanks,

Nader
  • #66
  • Apr 10, 2007 6:22am Apr 10, 2007 6:22am
Quoting superdezign
yea horizontal lines i have down, but i dont think they are to valuable.. maybe that "zone" theory you speak of it worth looking into..

im still confused about drawing trendines.. (questions is spelled out in my last post if anyone is willing to help shed some light for me)
If possible, get yourself to read Martin Pring's Technical Analysis Explained. Its has good trendlines/SR guide.

To draw trendline, you find the troughs (bullish) and peaks (bearish). Connect them with a line.

For S/R .. you look at the level where the price seem to fail to penetrate.
Look at the pics
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  • #67
  • Apr 10, 2007 6:25am Apr 10, 2007 6:25am
more pic for SR buying/selling ..
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  • #68
  • Apr 10, 2007 6:33am Apr 10, 2007 6:33am
Quoting luqmanz
more pic for SR buying/selling ..
What would be your SL in this case? Constant or at another trendline/SR?
  • #69
  • Apr 10, 2007 9:53am Apr 10, 2007 9:53am
Quoting superdezign
Maybe im making this harder than it seems but how did you know at what angle to put the line after buy area one in order to find buy area two? its that i dont understand.
It's quite easy, just take two low points and draw a line joining them. This line will be used as support, support that will be noticed by many players in the market. I used the Eur/usd 4h chart last night for my entry and i bought at 1.3350 with 25pip s/l.
I would suggest you start with 30 min charts and work your way up to bigger ones and don't expect the price to bounce up at your entry point, always allow some room for some movement and you'll be fine. With practice you can only get better!
  • #70
  • Apr 10, 2007 9:58am Apr 10, 2007 9:58am
isnt it easier to see them on the daily charts and not on the smaller timeframes like the 30 min?




Quoting MackS10
It's quite easy, just take two low points and draw a line joining them. This line will be used as support, support that will be noticed by many players in the market. I used the Eur/usd 4h chart last night for my entry and i bought at 1.3350 with 25pip s/l.
I would suggest you start with 30 min charts and work your way up to bigger ones and don't expect the price to bounce up at your entry point, always allow some room for some movement and you'll be fine. With practice you can only get better!
  • #71
  • Edited 10:47am Apr 10, 2007 10:15am | Edited 10:47am
Quoting Hadrys
What would be your SL in this case? Constant or at another trendline/SR?
I use ( (ATR 20) * 2/3 ). But most of the time I just use 50 pips for simplicity.
  • #72
  • Apr 10, 2007 10:36am Apr 10, 2007 10:36am
Quoting superdezign
isnt it easier to see them on the daily charts and not on the smaller timeframes like the 30 min?
Well i use 1h and 4h which work fine with me. Play around and see which one works better for you. You can even draw trend-lines on a 15min chart and make profit, it's really up to you.
  • #73
  • Apr 10, 2007 12:32pm Apr 10, 2007 12:32pm
Quoting narafa
Thanks a lot my friend....You asked for a chart, attached is a chart of my recent position mentioned earlier in the thread...


Thanks,

Nader

Most Excellent!

Let's all all work on developing our TRADING SKILLS, like this,
and minimize our time spent on developing "systems" that
just LOOK GOOD ON PAPER or AVERAGE-OUT OVER TIME!

Thanks again, Nader and everyone!

FXS
  • #74
  • Apr 10, 2007 1:04pm Apr 10, 2007 1:04pm
Here is an example of A downtrend on a major uptrend. This would be a good buy especially with that pinbar on the bottom. Let's see if this goes back up.
JOHN 3:16
  • #75
  • Apr 10, 2007 1:08pm Apr 10, 2007 1:08pm
Sorry, forgot the chart.
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JOHN 3:16
  • #76
  • Apr 10, 2007 1:44pm Apr 10, 2007 1:44pm
Quoting superdezign
Ok, so im trying to set a bunch of rules for trading with trend lines.. can anyone help me establish a set of these rules.

Methodology Rules (Great!), System Rules (Careful!)



Im having trouble drawing trendlines as well.. sounds stupid and im probably making things harder than they are.. I could be drawing them right I just dont know how to play them..

I'm using MA's to HELP me to draw my trendlines and to HELP me
to qualify S/R points (i.e. stalls and turns in price.)

To assist me in trading in a METHODICAL, PREMISE-BASED fashion.
Not as a "trading system"!

any help would be greatly appreciated!!!

Dave

If this sounds of interest to anyone, please see attached chart and
template (I hope it uploads!). I'm happy to discuss and then debate
the methodology and premise they are based upon then.
I don't want to ramble on if there is no interest or if there is
confusion and people think that I am advocating some type of SYSTEMIC approach. I AM NOT.

Warning: I'm a Newbie developing my methodology!
FXS
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Attached File(s)
File Type: tpl non-lag ma x 2.tpl   1 KB | 407 downloads
  • #77
  • Apr 10, 2007 2:48pm Apr 10, 2007 2:48pm
Quoting FXSurfer
some type of SYSTEMIC approach.
Let's make that "SYSTEMATIC" instead.

FXS

P.S. I want to be clear that I am talking about
SIMPLE TREND-FOLLOWING or else I would not
be on this thread!
  • #78
  • Edited 6:48pm Apr 10, 2007 4:18pm | Edited 6:48pm
Quoting FXSurfer
Let's make that "SYSTEMATIC" instead.

FXS

P.S. I want to be clear that I am talking about
SIMPLE TREND-FOLLOWING or else I would not
be on this thread!
VERY IMPORTANT that you read through the entire post

well, thats the trick.. we have to be consistent by being systematic.. if we are too analytical on each trade and our results vary we will never make money.. we just have to outweigh our losses by cutting them short and letting our winners ride.. problem is.. how do we do that?

Everyone keeps saying: its simple, draw a trendline through two peaks or dips (depending on if it is a down or upward price movement) and sell or buy off the next touch of the line.. ok well, thats great, but how do you define a dip? price moves up and down all the time, but alot of those movements are not necessarily dips or peaks. Next question would be where to place stops. A question which is crucial for proper money management, and money management is crucial for success in trading.

Next we need to know when to take profits, well most of the time they say to close the trade after it slices through the trendline. Well thats fine, but how far below the trendline do we decide to take profits? 1 pip, 2 pips? Sometimes the price will take a quick dive below the line and take you out then go up another X amount of pips which you missed out on. Staying in the trade for as long as possible is important if we are following the "let your winners run" philosphy.

Myself and many huge fund managers believe that it is very important to have a system, without a system we make stupid mistakes. If we backtest a method (im going to start using the word method because system makes me think of indicators - yuck!) and it works through historic charts and provides us with a nice profit year after year, then we should have no fear when we open a trade and should feel nothing when price moves (against our position or not) because we have a plan!! a plan of action that we know will make us money in the long run. This is how we beat the market.

I am a huge fan of trend following, and I strongly believe that a trend following model if developed properly can create amazing, consistent, and profitable results year after year in ANY market ANY currency pair! Think about this: Every market can move only two directions... up or down.. this is true in any market, and will remain true forever as it has for centuries. Trend following methods are producing the same results they were 10, 30, and 50 years ago. One man once looked back on charts into the 1800's and found his trend following method was consistently profitable even back then. Others methods have come and gone, but trend following has and always will be, from my perspective, the best way to make money in any financial market.

I have been trading for a good while now and I am sick of making money and then giving it right back! I am looking for a small group of traders that will join me and dedicate themselves to developing a trend following model. I am looking for dedicated traders who have been trading for a decent amount of time and understand the basics of support/resistance and price action. I am not looking for a group of professional traders, just people who are hard working and do not mind helping me, and the other members of the group backtest the method we develop.

The date of the first meeting is still to be decided. There is no charge for joining this group, and we will be using Forex Factory as our main base. Once our research is completed we will share our findings with those at Forex Factory who wish to hear it.

Meetings will most likely be over skype, but I am unsure. I want to make sure everyone in the group can participate in the dicussions.

I will be looking for about 25-30 traders for this research project. If too many people apply I will have to go through and select the most eligible candidates

Send me a private message if you are interested!!!
  • #79
  • Apr 10, 2007 5:44pm Apr 10, 2007 5:44pm
Quoting superdezign
we just have to outweight our losses by cutting them short and letting our winners ride.. problem is.. how do we do that?

Everyone keeps saying: its simple, draw a trendline through two peaks or dips (depending on if it is a down or upward price movement) and sell or buy off the next touch of the line.. ok well, thats great, but how do you define a dip?
Hi.
Just wanted to give a very quick reply before I go to sleep, already running way too late.

You answered your own question, no?

If it touches the trendline, that's your dip. That's your buy. If you're timid, wait for a PA setup or for price to move back up. If you're bold, use a set stop and buy on touch.
You let profits run by trailing below the daily close or under a recent low made or by closing after price has moved >=2 times your stop size.

You cut losses short by simply HAVING a set stop if entering on TL touch (20-40 e.g.) and with a PA setup by placing it 1 pip below the bar that constitutes the setup.

What need is there to complicate?

Including an example for Kiwi which I posted to the PF this morning. Been long from 0.7145 from a 4h PB on this.

Please note that the "inner" TL is more discretionary than the "outside" one and that the "first" = third touch once you can draw a trendline (you need two lows, obviously) is usually the best place to get in on.

Take care,

SeekingLight
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Trust price. Know yourself.
  • #80
  • Apr 10, 2007 6:50pm Apr 10, 2007 6:50pm
Quoting superdezign
I see all these "holy grail systems"

Be careful not to fall into this trap yourself!


Following the trend is the only way, in my opinion, to trade successfully in the long run.
Does anyone here follow trends?

I think you can follow the posts of experienced traders (not me)
here on this thread and just develop your trading skills.
Our time is limited and precious. We can either spend it working
on developing our skills trading using basic methodologies
(you already know them) or on developing trading systems that
work if and when the market happens to fall within the pre-defined
parameters.
Listen, I sincerely hope that you don't take offense to what
I'm saying! That is not in any way my intention.

Please, EXPERIENCED TRADERS, weigh in on this most important
question.

I am trying to contribute by stimulating debate in keeping with the first post of this thread. Maybe I'm off track. Am I?

FXS
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