Trendline Break (The Only System You Need)

Bollinger Bands follow price with a moving average and the actual bands are calculated using standard deviations. The STDEV is 2 by default but depending on what you use them for can vary. They are very good in ranging markets, but we careful in starting trends because instead of price retracting, it will can continue for a long time. Bollinger Bands are also heavily used in determining breakouts from what I recall.

Hi jonaslt,

Thanks for the input regarding BB usage in ranging market.This would help me a lot.
Just had one more query , in ranging market there are many whipsaw .
How to manage them ? I may not the right question in Trendline Break thread.I am sorry for that

Thanks,
Raju

No problem.

The idea of a ranging and trending markets is very interesting, let's look further into it. You have to be able to define what you mean by "market", is it the specific pair you are trading in a specific time frame, or are you talking long term trends of these pairs as most common people refer to?
The way I see it, a ranging market in one time frame, is often a trending market in a much lower time frame. This is why multiple time frame analysis is so important, so you don't get caught taking a trade in what you think is a trending market when it actually isn't.

As far as how to manage whipsaws in a ranging market, I think this is still relevant to this threat because those whipsaws are trend line breaks on a lower TF. I think it is best to think of Support/Resistance and trendlines as zones, not necessarily just a line. There are often zones that the price touches and plays around in before either bouncing back or through the zone and then continuing. These zones vary based on timeframes and may be 5-10, 10-20, etc. pip wide. There was a really good thread on this around somewhere about half a year or a year ago. Just because a price passes the trendline by 2 pips, did it really break it? What if there are other trendlines that are strong that are a few pips away that the price didn't reach yet? S/R zones are much more important than the lines you draw and tend to act as magnets. It is even easier if you think about that, and see how you can use candle stick patterns so see what is going on with price. There are continuation patterns, and reversal patterns that appear at these zones (either one one side or another) that often tell you what will happen with the price. I think someone mentioned candle sticks before also. Trading like this is looking purely at price action and is one of the purest ways to trade as believed around FF and there are many great threads on this with plenty of examples and discussion.

Hope that helps at least a little...

Jonas

Hi jonaslt,

Thanks for clearing my doubt.That was wonderful explanation.I will try using two timeframes (Paper Trade) One for entry exit (smaller one ) and other for getting bigger picture.

Thanks ,
Raju

lets see what happens here. Eurusd

N

result was a reasonable break

Hi N Aftab

Just a quick one on your chart...is it possible for you to supply the indicator which gives you the time to next bar and ranges etc on top left of yr charts

Thanks for any help

Z

sure

Its actually a pivots indicator, and it has that function built into it

thanks for that

Hi is there an ea for this system?

Hey Guys try using a RSI (9) Indicator with this system to help see the breakout clearer and sooner.

http://i47.tinypic.com/2ji52p.gif

Red bar is a hammer. Is this a good long position?

http://i49.tinypic.com/24o60za.gif

Shooting star...time to go short.

Careful! This has only the appearence of a shooting star, it is not a the top of a swing high, but in the middle of a swing low. If it has meaning is because of the trendline break.

Now a days I am using only the trend line approach with one indicator
RSI 9. See the GU chart it has now broken the trendline and I will be
monitoring this pair for the short opportunity after some retrace back to the trend line

how do u set u r TP?

I just draw them as they form. I look for 10 plus pips unless I'm forced out by a sl or tl cross with close. My sl is 5 pips plus spread, usually around 7.5 tot. As gain comes in I move my stop up accordingly. On a good trending day I'll sell half my trade and hope for the best with the rest. On a day like today's chart it was kinda crazy, got out with some minus and plus 10 pips. Once I hit my daily max I'm out. I have the Williams indicator but rarely use it. As long as there's 25 plus pips to work with I'll trade sideways. Otherwise channel it, look for pullback and go long or short. Nice thread.

hi you can see best sample trend lines and triangle methot by trend line in this address
forums: http://www.khamesi.com/html/history.html
account history:http://www.khamesi.com/html/history.html
treader site address :http://khamesi.com
trend line by mat.. methode teach : http://www.khamesi.com/html/tformola1.htm
and : http://www.khamesi.com/html/matt2.htm

http://www.khamesi.com/images/a-4.gif
tanx

http://www.khamesi.com/images/e-0.gif

Pedram,

That pretty impressive but it seem that it more complicated than simple trend lines don't get me wrong base on the result it produce it would be an awesome system use but to understand the method it just seem one would need to go back to school unless it simpler than it looks.

Jerome

Wow, this method really works, I'm beginning to test it, here you can see a recent operation:

http://img718.imageshack.us/img718/1645/trendbreaku.png

Maybe the method works better in the previews of the news, in the previews of the open time zones like Frankfurt, Chicago and WS openings, and also to exit of a trend-follow operation, I'll test them.

I have closed the position in 1'41111, it seems no longer to go down, I got 22 pips in a few minutes, thanks for share this.