Trend Trading With Support and Resistance

GO TO THE LAST POST AND CHECK THE TRADES POSTED 465 PIPS PROFIT IN ONE DAY WITH THE UPDATED METHOD

I have added some updates to the trading method to give some very nice results.


First of all this method is a trend trading method

The trades will be from a new trend forming or from a retracement in an established trend.


All markets move in waves, cycles and trends or whatever you want to call them, all markets are fractal ,this means that a wave is made from smaller waves and can be part of a larger wave.

An up-wave is a series of price bars making higher highs and higher lows and preferably higher closes
A down-wave is a series of price bars making lower highs and lower lows and prefarably lower closes.
A trend is a series of waves either making higher highs and higher lows or lower highs and lower lows.

The algorithm used clearly defines a new trend developing and various waves on any timeframe chosen to trade.

Not all trends should be traded , all waves can contain a trend and that trend and wave may be moving counter to a higher degree wave.


Using 3 timeframes

We look for a new trend forming, that trend should be confirmed as a wave on the next higher degree chart from here the trend and wave we are trading need to be moving in the same direction as the next higher degree chart.

If the trend is already established and the entry point was missed then entries from any retracement can be taken but the procedure to establish the direction must be followed as before.

All entries must be either.

1. On the break into new trend
2. If trading from a retracement then the prior swing high/low must be broken.


STOPS

1. On the break of a new trend ,the stop goes above the prior swing/high low as indicated by the algorithm.
2. When entering from a retracement the stop again goes above the prior swing low/high as indicated by the algorithm.


Exits

Discussed on the course.

Trades.

I will be posting trade set ups as they occur, form the 60 and 240 minute chart only, please remember that a trade set up may change up until the point of the break of the entry levels needed and i shall do my best to update as soon as possible.




nicholas

keep it coming buddy.

people say a picture tells a thousand words.. put some charts bro and maybe we'll be much interested in your strategy..

Of course a picture is better than a thousand words but in this case any pictures that i post will not contain the key

The key - is the method i use to clearly define the trend , retracements ,support and resistance, peaks and troughs and fractal waves in a visual manner with no ambiguity across a range of timeframes and trading instruments including forex,cfds,indexes,gold and oil.


as i said at the beginning this is how i trade and i do not wish to mislead anyone , so the information i have posted here in itself is a trading method ,how you define the points i have mentioned is up to you.


nicholas

Hi,


I am new to S/R but definitely i have a big interested on this. Please keep this thread up.


Thanks

I am a lover of trend trading.
When I get the way of the trend, i look for divergence, trendline break and resistance support break, not to be opposite of the trend way.

Keep it up, please

Hi nicholas,


Are you able to describe a bit more detail about WAVES WITHIN WAVES?

Thanks

Good luck with your thread, it is the right way, I mean stick to the trend.

I identify the beginning of a new wave this would be the whole part, i then use lower degrees of timeframes to identify the fractal waves that exist within the whole wave these fractals allow me to identify the trend moving in the direction of the higher timeframe or whole wave and also to view the fractals that exist in the lower timeframes to view the trend forming from the retracement to enter back into the trend.

I think were going to need a chart to explain this..

Nice thread Nicholas.

I've been trading like this for a while now and it works nicely.

Everything you need to know is in that first post just think about it.

However I think most people do not possess the psychological fortitude to follow such a discretionary method, hence why they try to use magical indicators.

[quote=nicholas;3726464]Hi all ,

this is how i trade



TREND TRADING

Trend trading is a simple trading methodology.

The trend is your friend – you’ve heard it a million times before and guess what – its true. I only trade in the direction of the trend relative to its timeframe using the lower timeframe trend to enter into a trade and the higher timeframe for confirmation of the cycle or wave.

An uptrend is formed when price is making higher highs and higher lows.

A downtrend is formed when price is making lower highs and lower lows.

During a trend we look for retracements to enter into the trend.

I use prior areas of support as a target area in a downtrend.

I use prior areas of resistance as a target area in an uptrend.

I always use a stop loss and place my stop at a logical place as dictated by price action.



SUPPORT AND RESISTANCE


Resistance is an area where previously sellers out numbered the buyers.

Support is an area where previously buyers out numbered sellers.

I use the right side of the chart to view the trend and the left side to view support and resistance.

Resistance is found where the price previously made a new high then retreated to make a new low ,lower than previous low.

Support is found where the price previously made a new low then rise to make a new high ,higher than the last high.



PEAK AND TROUGH ANALYSIS


Its clear to see if you open a chart of any tradable instrument that the price does not move in a straight line but moves in what we call peaks and troughs moving either up down or sideways.


The peaks and troughs help me to see if the market is in a trend or range or reversal and also to find areas of support and resistance.



WAVES WITHIN WAVES

A fractal is "a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size copy of the whole,a property called self similarity.


Fractals exist in nature These objects display a self-similar structure over an extended, but finite, scale range. Examples include clouds, snowflakes, crystals, mountain ranges, lightning, river networks, cauliflower or broccoli and systems of blood vessels and pulmonary vessels, Coastlines may be loosely considered fractal in nature ,fractals exist in may areas in life including time series or price series this means the markets we wish to trade are fractal too , you may have heard of elliot wave theory , although i do not use elliott wave theory to trade i do recognise that the markets are fractal in nature and use this concept to my advantage.


I identify the beginning of a new wave this would be the whole part, i then use lower degrees of timeframes to identify the fractal waves that exist within the whole wave these fractals allow me to identify the trend moving in the direction of the higher timeframe or whole wave and also to view the fractals that exist in the lower timeframes to view the trend forming from the retracement to enter back into the trend.



THE KEY TO ALL THIS

The internet is full of information on what the trend and support and resistance are , its easy to say buy the dips in an uptrend to resistance and sell the rallies in a downtrend to support.


The key is the method i use to clearly define the trend , retracements ,support and resistance, peaks and troughs and fractal waves in a visual manner with no ambiguity across a range of timeframes and trading instruments including forex,cfds,indexes,gold and oil.

Well defined bro.

mrom

Hi ,


chanlf,

as an experiment take a single daily bar and look at it on the 1,5,15 minute chart etc ,how many waves(peaks and troughs) ,trends , do you see, do the the same with 2 daily bars or use the 4 hourly bars etc


rebelheart

no charts ,as i have already explained ,this is how i trade

The key is the method i use to clearly define the trend , retracements ,support and resistance, peaks and troughs and fractal waves in a visual manner with no ambiguity across a range of timeframes and trading instruments .


AceOfTrades

The method i use is not discretionary


The key is the method i use to clearly define the trend , retracements ,support and resistance, peaks and troughs and fractal waves in a visual manner with no ambiguity across a range of timeframes and trading instruments .



thanks to all for your comments

nicholas

so, what is the purpose of this tread?

Hi Nicholas,

I understood what you mean by trend in trend now but i still don know how you trade base on these? Is it possible you upload some of your trade and explain what is the reason you place the trade?


Thanks

Hi,


Dezil ,

what is the purpose of anything?


chanlf,


ok so a lot of you want charts , personally i dont see the point of pretty pictures although i am guilty of posting some in the past , as i said i would hate to mislead you into thinking that i was going to post the key which is my method for constructing the waves after all that is my edge and im not going to give it away but bear in mind the points i mentioned in my first post ,those are really the main points you need to master to be able to trade consistently and be successful and after all i have given you the heads up ,find a way to construct the waves (peaks and troughs) relative to different timeframes and you have yourselves an edge. You can check my profile out if you want to go the easy route where you will find my website address so before the nay sayers gather , it is an option in the profile to have your web address there.

If you really want charts i will post 2 maybe 3 as i dont want to get bogged down with making charts.


nicholas

Hi,


Lets take a look at some charts , once again i am not going to reveal the key which is method i use to clearly define the trend , retracements ,support and resistance, peaks and troughs and fractal waves in a visual manner with no ambiguity across a range of timeframes and trading instruments ,

In the charts i have posted i will be using the trendline tool that is standard in metatrader , of course it looks like zigzag but let me assure you it is not ,the market moves in waves making a zigzag formation ,if you cant see this then you should of gone to specsavers.


In the first chart each one of the blue trendlines ,represents a whole wave ,in the next chart i will show you the waves within the wave.

Take a look at the next chart ,the yellow trendlines are the waves within the wave so now we can add another layer which will allow us to view the market in three dimensions and using trend analysis and support and resistance we can safely enter the market at various stages.

Take a look at the next chart ,now we have 3 degrees of waves which is really all we need to trade ,if you like we can call the first degree the major ,the second degree the intermediate and the third degree the minor this means the major waves are made from interemediate waves and intermediate waves are made from minor waves.


nicholas

Hi ,


i hope you like the charts ,so how do we trade it ,well its pretty easy to work that one out but here for those that may be a bit behind with technical analysis.


The aim of trend trading which has the highest statistical % of success compared to any other method is to identify the trend and enter into the trend by finding a retracement , now most traders use fibonacci retracements which is purely probabilty ,you could enter at the 23% retracement of the previous wave or 50% or any one of the so called golden ration numbers ,thats if first of all you can be sure you have the waves identified correctly in the first place,its purely a guess ,whats to say you enter and the price retraces further or even the trend never continues and you enter time after time only to be stopped out.

Some traders use candlestick analysis ,im not against this but when im trading with high volumes i want something that makes more sense as i have seen candlestick formations blown away time after time. What i want to see is the trend resuming from the retracement in a logical manner that gives me confidence in placing my trade which allows me to also place my stop in a safe and logical place where i can be confident that should that stop be taken out that either i made a mistake or the trend simply has ended .


So we identify the beginning of the whole wave ,then using the intermediate wave trend we wait for an intermediate retracement then using the minor trend we enter out trades in the direction of the intermediate trend which is moving in the direction of the major wave that then gives us the highest probability of a successful trade thats not to say that every trade goes right but in my experience at least 70% of the time it is correct, we are only following the market here and not trying to predict it , lets leave the crystal ball at home or in the fair ground where it belongs.


simple as 123 trend trading


nicholas

Hi Nicholas,


Attached with the GU chart. Red colour represented the major wave while blue colour represent minor wave. The direction of major wave and minor wave was different. May i know how you trade this kind of trend?


How do you identify the trend change?

Thanks and appreciate your advice.

chanlf,


hmmm, i think you need to re read the information again, find the major wave , then the intermediate trend and retracement in the major wave and use the minor wave trend to reenter in the direction of the intermediate trend of the major wave .

I will not be taking any questions on charts as we are not singing from the same hymn book , how you constuct the waves is up to you but clearly it will not be the same way as i do so no point in comparing charts.

nicholas

Hi,


Lets clarify,


identify the beginning of the whole wave or major wave , see the chart, find the intermediate trend as the whole wave is made from intermediate waves ,use the minor trend as the intermediate wave is made from minor waves to re-enter into the intermediate trend which is moving in the direction of the major wave.

nicholas