Trendline Break (The Only System You Need)

Hello mr. Jhig.

thanks very much for contributing your trendline break system.

"You're Welcome" ... to all that are enjoying the simplicity of the Trendline Break System. I'm working on making this system even easier and will post the "revised" version really soon(maybe today, no promises). So stay patient and happy pip'in.

*** Revised *** Trendline Break System version 2.0

Overview
The revised Trendline Break System will utilize the Heikin Ashi Candlesticks; as opposed to the traditional Japanese Candlesticks. The Heikin Ashi Candlestick could be seen as an "improvement" upon the traditional candlestick by helping traders locate the trend better, amid often erratic market volatility. In addition, the Heikin Ashi allows a trader to "see" obvious trend reversal as it happens. Heikin Ashi helps a trader accomplishes all of this with only one glance.

Tools of the Trade
1) Trendlines
2) Heikin Ashi Candlesticks
3) Any Timeframe

The System
***The general dynamics of this system stays the same. ***
1) Find the upwards trend,
2) Apply the trendline,
3) Price Action breaks downwards through the trendline
Our first step is to locate a strong upwards trend. Apply a trendline to help visually spot out that trend and to use as an "barrier" for Price Action. Now we wait for Price Action to breakthrough the trendline and head downwards, in which a SELL order may now be entered. The chart below is an example of a trade setup we are looking for.

With the addition of the Heikin Ashi, traders will be able to apply the a trendline appropriately and anticipate market reversals; using the reversals as an exit strategy. For trader's, who are unfamiliar with Heikin Ashi, Investopedia offers a good read on the subject:
http://www.investopedia.com/articles.../04/092204.asp

Attached Image (click to enlarge)

Trading Platforms
Heikin Ashi is available on GFT DealBook360 and eSignal. I'm sure there are many other platforms Heikin Ashi resides on, but unfortunately I don't know of any off-hand. Check with your Platform's developer if Heikin Ashi is not available.

Metatrader users, there is an Heikin Ashi indicator available for free. I was unable to find a Compiled version of download, so I will give instructions on installing Heikin Ashi (assuming it's not installed already).

1) Visit http://www.forexmt4.com/_MT4_Experts/Heiken299.mq4 - COPY and paste the MQ4.
2) Open MetaEditor. Select: FILE > NEW
3) Wizard Popup. CUSTOM INDICATOR > NEXT
4) Name it Heikin Ashi or anything you want. Select FINISH
5) Delete the pre-populated code. PASTE your Heikin Ashi code
6) Press COMPILE > TERMINAL
7) Go back to the MT platform. INSERT > INDICATORS > CUSTOM > HEIKIN ASHI
*** Becase the Heikin Ashi Candlesticks overlays over the traditional candlesticks, choose a Line Chart to view the Heikin Ashi. Your MT chart should look like this:

Attached Image (click to enlarge)

Happy Pip'in

As a favor, could someone compile and post the Heikin Ashi Indicator, because my MT skill are lacking. I and MT users would greatly appreciate it.

Thank you.

Sure thing.

Good Times!
Thank you Sun, for posting a complied Heikin Ashi.

Anybody using pending orders instead the market once to reduce the number of false breakouts? Let's say if the candle closes below the trend line then put the SELL STOP N pips below the Low of that candle. Does that make sense?
I hope this is not one of those "improvements" we've seen in other threads.

So far I've had pretty good success using the trendline breaks in both direction on the 5 minute chart and validating the entry with a 5 ema cross of the 8 sma.

Seems to work very well and looks like a decent filter.

Hey Orest,
I use Market orders, only because I trade the 5 Min chart and due to the speed and nature of that chart, I found it very difficult to "judge" an entry point using Stop Entries. The entries I place are never at the moment of a cross. Instead, I wait a bit, letting my eyes see an established break though the trendline before entering.

Now, I've found it a lot easier to judge an Stop Entry Order on a larger timeframe, such as 4 Hour, Daily, etc... We, here in this thread, are open for suggestions on placing Pending Entries, if anyone want to share their own idea about the subject matter.

Hey Marco,
Congrads on your profitable successes. Thats what I like to hear; trader having success. Keep up the good work.

Today has been a busy day for Eur/Usd Short-Sellers using the trendline break system

Here is a high probability set-up for today. Stop loss at recent swing high

Is it true that a trend line needs to be tested at least 3 times by price and support the PA before it can really be considered a trend line?

The "ideal" trade, you would want to look for Price to test the trendline at least three time, but you can apply a Break system with just an upwards (or downwards) trend without 3 price bounce.

"AL" means "BUY"
"SAT" means "SELL"
"KIRILMA NOKTASI" means "BREAKING POINT"

Excellent Thread!
i like this thread a couple of questions/comments
1. why not trade in direction of trendline AND the trendline break? for example after two tests, make buys on the trendline with small sl.
2. what about the retest of trendline on trendline break?
check out this thread by a member of here and forex-tsd which may help to advance this thread to another level. http://www.forex-tsd.com/manual-trad...ut-retest.html
3. How could this method be improved with multiple fibs and fib times like what i found here http://www.forexfactory.com/showthread.php?t=162886
4. One thing I have noticed in trendline breaks is that the beginning of trend a-b-c where a is beginning b is last test and c is break, the price will fall at least equal of b-c after trend is broken. this could be looked for as first tp #of pips minus 10% so for a 130 pip last touch first profit could be 117.

for those interested i recommend checking out marketgeometry online my tim morge also in lines.

i only used trendlines, sr, and fibs to trade.

if you combine this method with nobrainertrades and bobokus fibonacci trading and perhaps skunny indicator free i think you would have the holy grail in my opinion, because lines are the fortune teller. if you use them you will make a fortune, if you don't you will lose a fortune (on lost opportunities) because you don't know why price is doing what it is doing.

Very nice - thanks.

eheh turkcemi ogretmeye başladın genclere

Çaktırma Aslında türkçe bir forum için bunu hazırlamıştım. Bu başlığı görünce bir katkım olsun dedim

Here is another opportunity with Sl at recent 5 min swing high