Trendline Break (The Only System You Need)

Trendline breakouts:
here are a few lessons that I screen shot, while trading.
The more screen time experience you have, the better judgment you will have when knowing when to enter these trendline breaks.

You can enter LONG or short on these Trendline breaks
You can use any time frame, with an appropriate SL of course
There are Breakline FAKES. once way to avoid this, is to Draw trend lines from a daily, then 4hr, and trade with the trend.
Good luck

Jhig this is a great Thread thank's to share with us, I remember with Jacko's thread on FF http://www.forexfactory.com/showthread.php?t=27286
keep the awesome jobs up jhig love it...

i tried to avoid false breaks by not trading the break. The break will typically form a new trend and simply trade the trend...takes some patience but you can avoid some obvious pitfalls

Mxb, any chance of a few charts showing what you mean.. One picture speaks a 1000 words.

Rebel.

simple trade yeah very simple but it's work and really well done

A false break is simply a trade in the original direction.

http://img2.pict.com/42/59/6b/182450...kscontinue.jpg


A break is much safer to trade once the extreme of the trend has been tested/exceeded then failed.

http://img2.pict.com/44/8e/12/182452...tofextreme.jpg

Another example. Al Brooks's book Reading Price Charts Bar by Bar goes in depth on the topic.

http://img2.pict.com/57/0e/84/1824634/0/traps.jpg

Hi guys,

Many times on a five min chart you can draw a trend line, when PA gets to the line it will bounce or go through it, I was thinking If when price touched the trend line and bounced 5 pips I would buy or if price broke the trend line by five pips id sell...

My question is do you think 5 min chart would be best for this, and is five pips enough to confirm a bounce or break off the line, also SL was thinking ten pips.. any help much appreciated

Rebel..

great simple strategy, been testing today, 5 min charts great for scalping but need to be quick, lot of noise on 5 min charts, need to be fairly accurate with trendlines, 15 min charts may just be better

The trendline once broke, also acts as good support, worth noting, done it on several pairs today, this seems to be a very good strategy,

Booktimes what time frame?

Hi Ozzie
Anytime frame really but primarily 5 min, straight in and out,

Hey, Thanks,

Im really trying to get a grip with these trendlines. Just not happening. I can see it once its done (too late!) But where to draw them before the event if you understand. Can you post some charts of the trades you took today?

Oz

Channel Surfing: Riding the Waves of Channels to Profitable Trading (Paperback)

~ Michael Parsons (Author)

Is this a correct entry?

http://img514.imageshack.us/img514/3010/73729152.gif

So do you get in as soon as the trend line is broken or do you wait for the candle to close below or above the trend line?

If you draw a downward trendline but the price won't close above it, do you keep extending the line to more closely fit PA? Or is that trendline considered invalid and you wait to draw a new one?

Excelent thread!!!

Hi All,

Great thread . Thanks everyone for the contribution . I don't know much abt Bollinger Band, but after seeing some thread I believe using BB with help analyze extreme points .

Thanks,
Raju

It seems like people always chose to reinvent the wheel. There are numerous threads about this around here discussing it in a lot of detail.
Regardless, Jhig thanks for the contribution and explaining your system and everyone for joining in.

Food for thought about just going short: You aren't trading equities or commodities, or similar instruments. When you enter a position in EUR/USD you're going long/short, in this case only short/long. The theory of a more rapid price movement on average might apply to equities, don't know about this so much because this is just relative value between the two so it should move more or less equally in both directions. There may be some bias because of the long term trends we have seen in EURUSD however.


Again, something to think about: Try looking at horizontal Support/Resistance lines. Trend lines are in essence diagonal S/R lines. Confluence of these S/R lines over different time frames and ranges can help you a lot. If you also look at horizontal ones, you will see where these lines cross and those points are usually very important, especially on higher TFs. This can help you filter out some bad trades, help you wait for the stronger area of S/R, or know when a trade is more likely to be profitable.

Analysis over different timeframes can help you determine trends better and lets you double check if you are taking the trade in the right direction. Usually, S/R & trendlines from higher timeframes are more important than the lower ones. I know this seems simple and I bet most of you heard this before, but don't underestimate this, I know I did when I started.

One more thing before I end that's a little more menial, if you are trading 1HR time frames or smaller ones and are looking for trend reversals or strong retracements, think about when there is enough volume in the market to cause those big retracements. Usually there won't be real trend line breaks when there is very low volume (ex. between different exchange close/open gaps US evening). You are more sure to get strong movements when there's a lot of trading (London open is usually great for this and before and after NY opens but that session can get tricky)


These are just some thoughts off the top of my head. I've been trading profitably for quite some time and and this is just from learning by experience and the good guys here at FF that I picked up a thing or two from. Hope it helps at least a little.