DanUK's Advanced Trend Trading Strategy | Page 7 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Advanced Manual Stop Loss Strategy 2 replies

Advanced Strategy Tester 12 replies

DanUK's Intraday Experiment 279 replies

DanUK Simple EUR/USD Trading Journal 2009 1,005 replies

DanUK Trend Trading Journal 2010 433 replies

Attachments: DanUK's Advanced Trend Trading Strategy
Exit Attachments

DanUK's Advanced Trend Trading Strategy

  • #121
  • Sep 14, 2010 1:56pm Sep 14, 2010 1:56pm
Quoting dmuk
Hi Dan,
Quoting dmuk

Another great thread. The simple trend trading approach is very much aligned to my own thinking.

Just some areas I am seeking clarity on. If you have already provided this, then please excuse the question or point me in the right direction. (I get lost in all the posts!)

1)
Can...


Hi dmuk,

Thank you for the compliment and questions... I find it's best to quote and answer in a different colour so that others can learn from the answers too:

1)
Can you explain how you apply the fib tool to your charts? And when you will use it and won't use it? What impact would round numbers have above/below the key fib numbers?

Personally, I find the use quite subjective (much like trend lines) and hence some inconsistencies appear.

Indeed – it is one of those self fulfilling prophecies – which trading is in fact made up of. I tend to use them to measure the retracement of the most recent swing in the direction of the trend. It is basically a guide so I know how far the retracement has gone – ideally I would like to see price retrace at least 50% of it’s last leg in the direction of the trend before becoming of interest to enter. Again, I line the levels up to the round numbers (I don’t physically adjust the fibs, I just do it mentally; so if the 50% level fell at 1.3415 for example I would round that to 1.3400 for an entry).

2)
Once in a trade, can you reconfirm your original stop loss approach? And explain when you move the stop loss to break even.

My stop loss is initially positioned a little above the high or low of the setup candle (if it’s a short signal the stop goes above the high and reverse for a long signal). Moving the stop loss to breakeven is a little more complicated – it is a whole subject in itself and I will come to it shortly!

Hope that helps!

Regards,

Dan
  • #122
  • Sep 14, 2010 1:58pm Sep 14, 2010 1:58pm
Quoting ludo willems
Hello Dan,
Follower of your tread and trading style, I found this indicator on www.mql4.com . It combines several S/R levels over different timeframes. It takes a bit of trial and error to find the best settings, and they seem to be different for some pairs. Moreover, if installed on some 20 pairs (Alpari UK MT4), it uses quite some processor/memory resources.
Best regards,
Ludo Willems
Belgium
Hi Ludo,

Thank you for your interest! I have also used some indicators to identify S/R levels but I have not seen this one before!

To be honest though I believe the very best indicator to use is the human eye! It requires a little training but it is the best way to do it in the long run imho!

Regards,

Dan
  • #123
  • Sep 14, 2010 2:10pm Sep 14, 2010 2:10pm
Quoting MrCBee
Hey Dan are you in any long term trades right now? could you possibly give me a current performance result .eg EUR/AUD + 450 and il attempt to find your entry just want to practice spotting the patterns without being told
Very good idea MrCBee! I do have a couple of long term trades open - I'll start off with a couple of easy trades (as of this moment they are)...

USD/CHF (H4) +260 pips

USD/JPY (Daily) +820 pips

AUD/USD (Daily) +880 pips

Regards,

Dan

PS... Anyone else who wants to join in is welcome!
  • #124
  • Sep 14, 2010 2:13pm Sep 14, 2010 2:13pm
Quoting lite27
Hello Dan, do you see some pare ready for long term trade now or pare where signal is forming? Thank you for this great thread and for your help. have a nice day,
Hello lite27,

Yes there are indeed some currencies lining up and ready to trade however I don't want to post any at the moment! Once I've finished explaining the strategy I will look to start posting potential trades and hope others will join in and post setups too.

Regards,

Dan
  • #125
  • Sep 14, 2010 2:14pm Sep 14, 2010 2:14pm
Quoting Fxmh
Hi Dan,

Great thread,many thanks.

Best wishes
You're welcome!
  • #126
  • Sep 14, 2010 2:15pm Sep 14, 2010 2:15pm
Quoting lizpet
Hi Dan,
Do you look for any particular "signs" in price action (other than your candlestick patterns) as it approaches your trendline, S/R zones which help you decide if or not they are likely to hold or be breached?

Thank you
Peter
Hi Peter,

No not really. Is there anything in particular you had in mind? The only thing I wait for is the close of the setup candle... once that is done I will decide whether or not to trade.

Regards,

Dan
  • #127
  • Sep 14, 2010 3:01pm Sep 14, 2010 3:01pm
Quoting DanUK
Indeed – it is one of those self fulfilling prophecies – which trading is in fact made up of. I tend to use them to measure the retracement of the most recent swing in the direction of the trend. It is basically a guide so I know how far the retracement has gone – ideally I would like to see price retrace at least 50% of it’s last leg in the direction of the trend before becoming of interest to enter. Again, I line the levels up to the round numbers (I don’t physically adjust the fibs, I just do it mentally; so if the 50% level fell at 1.3415 for...
Quoting DanUK
My stop loss is initially positioned a little above the high or low of the setup candle (if it’s a short signal the stop goes above the high and reverse for a long signal). Moving the stop loss to breakeven is a little more complicated – it is a whole subject in itself and I will come to it shortly!
Thanks very much for the reply.

I will revisit the fib stuff a little later, but I take it 50% or close to it is your preferred number?

I look forward to learning more detail around your stop loss approach. Maybe you could quantify the "little bit" above or below - is this a specific number or just enough away from the set up candle to avoid being knocked out of the trade?

I posted another question in your other thread. Hopefully you can shed some light on these basic questions as well!

http://www.forexfactory.com/showthre...243846&page=15

I was looking at the AUD/CAD today. The upward trend has already run since June but there may be some potential in the high set today. Would this be a suitable one to watch? I know that rollover and spread may be an issue on this pair.
  • #128
  • Sep 14, 2010 3:12pm Sep 14, 2010 3:12pm
Quoting dmuk
Thanks very much for the reply.

I will revisit the fib stuff a little later, but I take it 50% or close to it is your preferred number?

I look forward to learning more detail around your stop loss approach. Maybe you could quantify the "little bit" above or below - is this a specific number or just enough away from the set up candle to avoid being knocked out of the trade?

I posted another question in your other thread. Hopefully you can shed some light on these basic questions as well!

http://www.forexfactory.com/showthre...243846&page=15...
Hi,

I have now replied to your other question (apologies for the delay I don't have the time to do much intraday stuff at the moment).

With regards to the AUD/CAD - when you say "potential in the high set today" do you mean potential to sell it?

Regards,

Dan
  • #129
  • Sep 14, 2010 3:18pm Sep 14, 2010 3:18pm
Guys I think I have caused a little confusion with all the discussions of different time frames etc.

So for now I would like everyone who wants to learn to trade with the trend to do the following only:

1. Pull up a weekly chart and draw your support and resistance levels off this chart - this should help you to draw the major levels that we want to trade from and cuts out the intraday noise.

2. Only watch the daily chart for entries with the trend at a pullback to one of these levels (trendlines and fib tool may be used to help guide you to the best entry level).

For the time being lets forget about 4 hourly charts and lets also forget about counter-trend trades.

Is that cool with everyone? Entries will be fewer but they should also be more reliable and much easier to read.

Regards,

Dan
  • #130
  • Sep 14, 2010 3:48pm Sep 14, 2010 3:48pm
Quoting DanUK
Guys I think I have caused a little confusion with all the discussions of different time frames etc.

So for now I would like everyone who wants to learn to trade with the trend to do the following only:

1. Pull up a weekly chart and draw your support and resistance levels off this chart - this should help you to draw the major levels that we want to trade from and cuts out the intraday noise.

2. Only watch the daily chart for entries with the trend at a pullback to one of these levels (trendlines and fib tool may be used...
Great Dan! Suits me down to the ground. Would it be okay if I was to post a chart or two of a couple of pairs once I've identified the levels on the weekly chart, just to be sure that they are at least in the ball park?
When in doubt, sit on your hands...
  • #131
  • Sep 14, 2010 7:25pm Sep 14, 2010 7:25pm
Some very nice trades and results Dan.
I have added some charts with my analysis.

Finding the UJ entry I marked all the candlestick patterns we look for and a few swing low fibs. The fib in the rectangle had already retraced so i used the second one. From there I know your entry signal would have been the bearish engulfing or pinbar marked with a red cross. You can also see I marked a 3rd pattern the IB. Consider adding to the position there? Close below 150ema, breaks lower and added confirmation closing below 90.00

AU trade I assume your signal would have been the bullish engulfing marked with red cross?. Closed above 8500 i also had the 50% retrace marked at 8470 (not on chart). Would have been a pass from my chart tho 365ema just above and all that previous support now resistance (marked in rectangle). However it did break through hard. I think an entry at the blue cross would be acceptable with stop below 85 meaning price would have to drop through 3 strong resistance points.

USD/CHF wow easy find no chart necessary every one should be able to see it clearly. I actually took that trade - pinbar at swing high, previous s/r area, rejection of 150ema and lined up with 38.2 retracement. To bad i got out at 1.008 support area as it is now +120pips from there which you have picked up .

We all know its easier finding these entries in the past. The real challenge is finding these setups and sticking to the rules in real time. Look forward to working with you.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: usdjpy.gif Size: 24 KB
Click to Enlarge Name: au.gif Size: 27 KB
  • #132
  • Sep 14, 2010 8:44pm Sep 14, 2010 8:44pm
Quoting DanUK
Hi Peter,

No not really. Is there anything in particular you had in mind? The only thing I wait for is the close of the setup candle... once that is done I will decide whether or not to trade.

Regards,

Dan
Hi Dan,
I'm probably falling into the typical trader trap of complicating and over analyzing a basically robust methodology!

But to answer your question - if we can identify price weakness or strength in price as it approaches our area of interest it may be useful

e.g. Say price starts to roll over as it approaches our area of interest, the probability of our area holding is looking better

If we should use an oscillator? - then we could use this to pick out divergence with price (weakness), if this coincides with our candlestick patterns, S/R etc - this may increase the probability of a successful trade
etc
etc

I think I should just sit back and watch how your strategy unfolds and if/how/why you may change your trendline to accommodate new pivots to capture the larger trend

I look forward to seeing your exits

Trendline trading appears so logical and easy (provided we don't over complicate it) ha ha

Thanks Dan
Peter
  • #133
  • Sep 15, 2010 1:52am Sep 15, 2010 1:52am
[quote=DanUK;4021637]Very good idea MrCBee! I do have a couple of long term trades open - I'll start off with a couple of easy trades (as of this moment they are)...

USD/CHF (H4) +260 pips

USD/JPY (Daily) +820 pips

AUD/USD (Daily) +880 pips

Regards,

Dan



I also took the USD/CHF on the D1 based on a pinbar entry. At present I am using T/P (take profit targets) of minimum 2-1 of the distance between my entry and my S/L. I placed my S/L at break even after I had gained 200 pips. There has been some retracement today, but it is heading south again now. I look forward to your views on the S/L positioning Dan.

Good trading.

GJP
  • #134
  • Sep 15, 2010 3:22am Sep 15, 2010 3:22am
Quoting DanUK
Guys I think I have caused a little confusion with all the discussions of different time frames etc.

So for now I would like everyone who wants to learn to trade with the trend to do the following only:

1. Pull up a weekly chart and draw your support and resistance levels off this chart - this should help you to draw the major levels that we want to trade from and cuts out the intraday noise.

2. Only watch the daily chart for entries with the trend at a pullback to one of these levels (trendlines and fib tool may be used...
Hi Dan and other trend traders,

I'm a bit confused regarding Eur/USD direction...

If we pull up a let's say 200-300 candle weekly chart, we can see that we are in a downtrend and that the nearest resistances are around 1.30 and 1.33.
(Sorry I'm at work, I cannot access my platforms and don't have java in laptop, so cannot put upload charts...).

If we pull up a 200-300 candle daily chart we are also in a downtrend and around the 1.30 resistance line. However we have been in a correction since june.

The way I see (if reading charts correctly) right now could be a good place to short. Also this level is also a 60% fib level from last swing high-low. However this weeks bulish momentum is very strong and it could go further up... This is making me doubtful about the long term downtrend , perhaps we are in the beggining of a new uptrend... When in doubt you should stay out of market, but would like to know people's thoughts about this pair and current situation...

Thanks
  • #135
  • Sep 15, 2010 3:31am Sep 15, 2010 3:31am
Quoting DanUK
Guys I think I have caused a little confusion with all the discussions of different time frames etc.

So for now I would like everyone who wants to learn to trade with the trend to do the following only:

1. Pull up a weekly chart and draw your support and resistance levels off this chart - this should help you to draw the major levels that we want to trade from and cuts out the intraday noise.

2. Only watch the daily chart for entries with the trend at a pullback to one of these levels (trendlines and fib tool may be used...
Great place to start! I'm cool wit h that.
What you do is a reflection of you....what I do is a reflection of me.
  • #136
  • Sep 15, 2010 6:48am Sep 15, 2010 6:48am
Hi Dan,
If we are after the multi month moves, then we probably need to draw our trendlines thro the major pivots.

The more bars that we have on our charts, the bigger the picture we see, and the more important pivots tend to "stand out" better - allowing us to draw our trendlines thro the "major" pivots, and hopefully these trendlines provide the longer term moves.

Why not get our trendlines from the timeframe above that which we intend trading from? (just thinking aloud)

When trading from the daily, how far back do you display on your chart a year? one and a half or two years? for drawing your trendlines

Thanks again
Peter
  • #137
  • Sep 15, 2010 8:31am Sep 15, 2010 8:31am
Quoting laranja
Hi Dan and other trend traders,

I'm a bit confused regarding Eur/USD direction...

If we pull up a let's say 200-300 candle weekly chart, we can see that we are in a downtrend and that the nearest resistances are around 1.30 and 1.33.
(Sorry I'm at work, I cannot access my platforms and don't have java in laptop, so cannot put upload charts...).

If we pull up a 200-300 candle daily chart we are also in a downtrend and around the 1.30 resistance line. However we have been in a correction since june.

The way I see (if reading charts correctly)...
HI Laranja,

My take on the EUR/USD is that we are at a critical point at which it decides whether it wants to resume the previous short uptrend or start another down trend.

This is the daily chart

1) the green line was the down trend we had the first half of this year. Around mid july it broke above the green line and retested and continued upwards. Note the retest didn't fully touch the green trendline before it continued upwards (just a point to show that trading requires flexibility and its an art more than a science)

2) Now the blue line is connecting the first two lows. Currently the EUR broke below it and it has been retesting it for a couple weeks now. It has failed to convincingly show strength in the down move and is staying close to the blue TL. Usually when price hangs around a TL it tends to break it after a while, its just waiting for the right push or correct moment.

So to me its at a descision making point.
Attached Image (click to enlarge)
Click to Enlarge Name: $EURUSD (Daily) 11_3_2009 - 9_15_2010.jpg Size: 94 KB
  • #138
  • Sep 15, 2010 1:49pm Sep 15, 2010 1:49pm
Quoting gododdin
Great Dan! Suits me down to the ground. Would it be okay if I was to post a chart or two of a couple of pairs once I've identified the levels on the weekly chart, just to be sure that they are at least in the ball park?
Hi gododdin,

Yes that would be fine - in fact it would be a good idea for anyone who wants to join in to identify levels of support and resistance on a weekly chart. A picture is worth a thousand words, as they say, and it should be a good learning experience.

Regards,

Dan
  • #139
  • Sep 15, 2010 2:08pm Sep 15, 2010 2:08pm
Quoting MrCBee
Some very nice trades and results Dan.
I have added some charts with my analysis.

Finding the UJ entry I marked all the candlestick patterns we look for and a few swing low fibs. The fib in the rectangle had already retraced so i used the second one. From there I know your entry signal would have been the bearish engulfing or pinbar marked with a red cross. You can also see I marked a 3rd pattern the IB. Consider adding to the position there? Close below 150ema, breaks lower and added confirmation closing below 90.00

AU trade I assume your signal...
Hi MrCBee,

Good work!

USD/CHF and AUD/USD you got exactly right.

USD/JPY I took the bearish engulfing bar... I also kept the first fib you mentioned because it was the most recent engulfing swing (although as you noted price had retraced into it already it had not broken the swing high or low).

As you say though... finding them in historical charts is one thing, live trading is something else altogether. But it is the first step!

Regards,

Dan
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy.gif Size: 23 KB
  • #140
  • Sep 15, 2010 2:11pm Sep 15, 2010 2:11pm
Quoting lizpet
Hi Dan,
I'm probably falling into the typical trader trap of complicating and over analyzing a basically robust methodology!

But to answer your question - if we can identify price weakness or strength in price as it approaches our area of interest it may be useful

e.g. Say price starts to roll over as it approaches our area of interest, the probability of our area holding is looking better

If we should use an oscillator? - then we could use this to pick out divergence with price (weakness), if this coincides with our candlestick patterns,...
Hi Peter,

You may be overcomplicating a little. The most important thing is to trade with the trend, the second is that you look for entries at high probability locations and the third is you get a valid entry signal to trade from. That's pretty much it!

Divergence however could be used if you are comfortable with it... I wouldn't however use the oscillators for anything other than looking for divergence! I will leave that one up to you - personally I don't look for divergence but if you want to it's probably about the only indicator based add on I would approve of!

Regards,

Dan
0 traders viewing now