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Trendline Break (The Only System You Need)

  • #41
  • Apr 15, 2009 6:51pm Apr 15, 2009 6:51pm
Thanks Heral and look:

TP and SL depends from Timeframe and Pair. I'm not an TP/SL expert, so I leave this issue for other users.
  • #42
  • Apr 15, 2009 7:00pm Apr 15, 2009 7:00pm
It seems on 5m chart if you consistently used 10pip s/l and 20pip target each trade, you could have an overall pretty consistently successful system.
  • #43
  • Edited 9:05pm Apr 15, 2009 8:54pm | Edited 9:05pm
Quoting maciek2
Thanks Heral and look:

TP and SL depends from Timeframe and Pair. I'm not an TP/SL expert, so I leave this issue for other users.
Hey Maciek, thanks for posting those examples. Your charts look good; great point on using Stop Losses because it's not a perfect system by any means, but a profitable one. I believe a trader will profit way more then he/she loses.

Good Job !!!
  • #44
  • Apr 15, 2009 9:00pm Apr 15, 2009 9:00pm
Quoting darkness
It seems on 5m chart if you consistently used 10pip s/l and 20pip target each trade, you could have an overall pretty consistently successful system.
Darkness, that is pretty much the exact system I use. I aim for 20 pips a trade with 10 pip Stop Loss. I never "ride out" the market, attempling to collect all that I can. It's a very focused trading system that have allowed me to enjoy many green pips. I invite all traders to at least give it a try and see where this system takes your equity.
  • #45
  • Apr 16, 2009 1:01am Apr 16, 2009 1:01am
Thanks for support Jhig.

And darkness have a truth. H4 domain is a big SL level, if you have a small SL, you must look on M5. Trade on H4, but look for ideal open on M5 - best tactics, I guess.
  • #46
  • Apr 16, 2009 2:56am Apr 16, 2009 2:56am
Hi all,

So far all the examples shown are good ones.
Any consideration on how to handle those false trendline breaks?
I have lost several times due to false breaks! Am not so good in candlesticks. Any highlight on this is appreciated.
  • #47
  • Apr 16, 2009 8:45am Apr 16, 2009 8:45am
Quoting Jhig

For those who follow the Trendline Break System, should have had a very profitable day. A 130+ pip; profitable day.


Jhig, This is my first post here on FF, but just had to comment on your system. I do like your chart setup. I use a somewhat similar chart set up to yours although different parameters/indicators and it is refreshing to see non-metatrader charts on FF.

However, there is inconsistency in your method. You mention that in your chart there is a 130+pip profit. Yet, in a later post you mention you go for 20 pip profit with 10 pip stop loss, so there's no way you would have achieved that 130 pip profit.

Also, 20 pip profit and 10 pip stop loss seems arbitrary. Do you really stick to that on every trade?

From my experiene trend line breaks can give powerful moves. I would agree with you that break below the trendline normally proceeds quicker than breaks above, with the EUR/USD.

I am always impressed with the time people like yourself can take to reveal what works for them.
  • #48
  • Edited 11:28pm Apr 16, 2009 10:56pm | Edited 11:28pm
Quoting Atlast
Jhig, This is my first post here on FF, but just had to comment on your system. I do like your chart setup. I use a somewhat similar chart set up to yours although different parameters/indicators and it is refreshing to see non-metatrader charts on FF.

However, there is inconsistency in your method. You mention that in your chart there is a 130+pip profit. Yet, in a later post you mention you go for 20 pip profit with 10 pip stop loss, so there's no way you would have achieved that 130 pip profit.

Also, 20 pip profit and 10 pip stop loss seems...
Sure it can work, with proper trade management you can make some great pips with these shorts.

I'm not sure of other software and brokers but my broker allows me to liquidate part of my positions in metatrader 4.

If you properly backtest this system, I did on 5M chart, you'll see there are quite a few trendline breaks (i did not pay attention to candlestick formations) - just trendline breaks for short opportunities, you'll see that and ,depending which pair but Euro is best for this due to low spread AudUsd works too, frequently it will drop 15-20 pips or more. With 10pip s/l, as soon as you in positive, move the s/l and keep moving it to zero,that way you not risking anything its a free trade. You'd want to start with 2 lots for each trade, liquidate half of your position at TP of 15 or 20 pips, set the 2nd half at zero stop loss and let it run. Sometimes they'll run for quite a bit (40+ pips). And sometimes more and sometimes not.

if you trade more volatile pair like EurJpy which my broker gives very low spread on but this thing can frequently run 30-40+ pips down. 2 trades like that a day can consistently give you fairly safe 60 pips, risking 10pips on each - 1:3 RRR. I backtested it on EurJpy for past few days, it can be done.

Oscillator crossover comes in slightly handy in these as well i think.

Check out chart. Nice 80 pip short on the eur/jpy on the break.
Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy short.gif Size: 26 KB
  • #49
  • Apr 16, 2009 11:22pm Apr 16, 2009 11:22pm
Quoting snowhyte
Hi all,

So far all the examples shown are good ones.
Any consideration on how to handle those false trendline breaks?
I have lost several times due to false breaks! Am not so good in candlesticks. Any highlight on this is appreciated.

Yea same problem with me too, please let me know if you get an answer for this! I changed my trading style coz of this problem. I did post the same question the other day but seems to have disappeared...

cheers
  • #50
  • Apr 16, 2009 11:39pm Apr 16, 2009 11:39pm
Quoting snowhyte
Hi all,

So far all the examples shown are good ones.
Any consideration on how to handle those false trendline breaks?
I have lost several times due to false breaks! Am not so good in candlesticks. Any highlight on this is appreciated.
Chart examples would help.

I've gotten couple false trendline breaks too and thats fine,i'm only risking 10 pips, i'm actually going to start only risking 5 pips because once these things go they typically go down if its true break, otherwise you only risking 5 , then wait for next break. On backtesting i've done, it seems about 7 out 10 breaks are good for 10+ pips.

Oscillator crossover helps a little too.
  • #51
  • Apr 17, 2009 1:30am Apr 17, 2009 1:30am
Quoting darkness
Sure it can work, with proper trade management you can make some great pips with these shorts.

You'd want to start with 2 lots for each trade, liquidate half of your position at TP of 15 or 20 pips, set the 2nd half at zero stop loss and let it run. Sometimes they'll run for quite a bit (40+ pips). And sometimes more and sometimes not.
Now, that's the way to make a simple set up work for you.
Incidentally, there's another thread here on FF about trendline break with moving average. Highly recommended.
  • #52
  • Apr 17, 2009 1:35am Apr 17, 2009 1:35am
Quoting Atlast
Now, that's the way to make a simple set up work for you.
Incidentally, there's another thread here on FF about trendline break with moving average. Highly recommended.
Thanks.

Thats funny i was just thinking of adding 2 moving averages to the charts, havent seen the thread yet but noticed there is a couple of trendline break threads. Thx!
  • #53
  • Apr 17, 2009 7:45am Apr 17, 2009 7:45am
Hi All:

I do use trendlines, channels for trading and found this thread recently.

Just spotted a potential setup for short on GBP/USD. I'm attaching a screen shot. I waiting for a break of the channel lower line, pull back for entry.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpdaily.gif Size: 27 KB
  • #54
  • Apr 18, 2009 10:18am Apr 18, 2009 10:18am
In addition to a scalping system that I use, I also like trend line breaks in the direction of the longer term trend. Essentially I am taking advantage of getting back in on the trend after a retracement is over. I do trade like somebody earlier had suggested with 2:1 TP:SL ratio. To me that takes out any discretion on exiting. I trade on the 1 minute. What can I say, I like to be in and out a lot! Here is a late Friday UJ set up that never came to fruition before the market closed. It shows 3 touches off the line and long term trade direction is long. This would most likely be a 10 pip SL and 20 pip TP if I were able to pull the trigger on it.
Attached Image (click to enlarge)
Click to Enlarge Name: jpy.jpg Size: 44 KB
Life is too short to have anything but delusional notions about yourself.
  • #55
  • Apr 19, 2009 7:10am Apr 19, 2009 7:10am
Haha, yeah. Gotta agree with some people here.

Jhig, your charts pretty much only contain valid trendlines. But there were many more possible trendlines which you did not include in your chart.

So simply drawing trendlines is going to fail. You will have to know which trendlines are valid. And I don't think you explained this.

So it's just another method than works....if you know how to do it.


@darkness: The last trendline you've drawn....is it a joke ?
  • #56
  • Apr 19, 2009 11:15am Apr 19, 2009 11:15am
This trendline indicator may take some of the work out of it.
Attached Image (click to enlarge)
Click to Enlarge Name: ind-wso-wro-trendline.gif Size: 97 KB
Attached File(s)
File Type: mq4 Ind-WSO+WRO+Trend Line.mq4   5 KB | 4,357 downloads
Starting to see instead of just looking.
  • #57
  • Apr 19, 2009 1:58pm Apr 19, 2009 1:58pm
Quoting dfxclub
Yea same problem with me too, please let me know if you get an answer for this! I changed my trading style coz of this problem. I did post the same question the other day but seems to have disappeared...

cheers

Trendline trading is not 100%. So, you have to be a little imaginative. Here's food for thought: After false break, take the loss. This now puts you in a very nice position. Why? Because you can let your bet size and money management work for you. The shaded region of the graph shows 2 examples of false breaks and how to handle it. No extra analysis involved, no looking to different indicators, no blame on the market for taking out your stop loss, no blaming yourself for taking the trade, just let bet size keep you trading.

How many times have you seen 2 false breaks in a row, then 3 false breaks, get the idea!!!!

Note: I'm not looking to redraw the trendlines when the false break occurs. You could of course do that.

Another solution: place SL at 1 bar high; if it moves 5 pips above trendline, cover and reverse position with TP at previous bar high.
.
Don't overdevelop the art, develop the attitude.
  • #58
  • Apr 19, 2009 2:02pm Apr 19, 2009 2:02pm
Here is the graph.
Attached Image (click to enlarge)
Click to Enlarge Name: $EURUSD(5 Min).jpg Size: 97 KB
  • #59
  • Apr 19, 2009 8:27pm Apr 19, 2009 8:27pm
Quoting Atlast
Here is the graph.
great, simple, i think this is what jhig did.

i try this strategy too. and it's profitable.
  • #60
  • Apr 20, 2009 7:05am Apr 20, 2009 7:05am
Someone should try one of those currency strength meter things and only trade the break in the way of the strength. Just get the free one floating around and see if that makes a difference. If nothing else it may help you decide to hold the trade longer.
"Even if you fall down face first, you still went forward."
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