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DanUK's Advanced Trend Trading Strategy

  • #241
  • Sep 24, 2010 12:35pm Sep 24, 2010 12:35pm
Quoting bez3000
Hi gododdin,

I'm not Dan but i believe he uses only one stop which is far enough away as to hopefully never get hit, just in case of emergency if he can not get to his pc. Then i think he progressively moves the stop with the trend (one SL price for all entries) but again looking to manually stop a trade if the trend changes instead of waiting for the stop loss to be hit.
Only my interpretation of the trading style.
Thanks Bez - I figured that was the way - it could get very complicated otherwise!
When in doubt, sit on your hands...
  • #242
  • Sep 25, 2010 12:07am Sep 25, 2010 12:07am
Quoting dmuk
I thought posting two charts may help in bettering my understanding. The below are daily charts.

As both trends appear upward (at least daily and weekly view) would we only consider LONG entries? Or would we consider going short if the setup was right?

Personally I am seeking longer term trades and therefore would be reluctant to trade against the trend.

AUD/CAD:
- Daily and weekly trends are UP.
- Would we wait for a break above the earlier high to enter high?
(0.970 - flagged with blue arrow on chart)
- Or would we be cautious of trend...
Hi dmuk,

Apologies for my slow response... I'm still catching up!!

Yes I prefer to trade with the trend only... there are times when a counter-trend trade might be placed but they are very rare and I plan to talk about them later if it becomes of interest.

With regards to the AUD/CAD and AUD/USD - I prefer to wait for price to pullback to a s/r level and then enter after the formation of bullish PA. I use trendlines (or channels if you prefer) and the fib retracement tool to help guide me to the most likely s/r level and then wait for a trigger (candlestick pattern) to enter off.

Hope that makes sense!

Regards,

Dan
  • #243
  • Sep 25, 2010 12:08am Sep 25, 2010 12:08am
Quoting podgy
Hi Dannyboy,just sighning into your great thread ,enjoyed your last one and this one looks even better.Thankyou for your time out.
Thanks! I haven't been called Dannyboy since I was in school lol!!
  • #244
  • Sep 25, 2010 12:20am Sep 25, 2010 12:20am
Quoting .Entropy
You've answered all my questions satisfactorily. Thanks.

Just a question. In 2009, you use the 100 pips trailing SL, correct? How are your returns this year, compare to 2009, so far. (just factoring only the USD pairs)
Hi Entropy,

My 2009 trading was very agressive and I think I was very lucky that year too. I made a very high % return that year but I don't think I would have been so agressive with entries this year (I think this comes as the account balance goes up I have become more conservative with my trades).

So if I were to compare just GBP/USD and EUR/USD at the end of this year I would probably find that as a % I would have made less but as I am able to trade a wide range of pairs using this strategy I will probably make more (especially from the Euro crosses). The most important thing though is my trading is much more relaxed now - I used to check up on my trades constantly throughout the day and was adjusting my stops etc... now I let a trade go and pretty much forget about it. For me, that makes trading so much easier and more enjoyable. Especially when you are building a long term position and you can just check up now and then and (hopefully) see the pips stacking up over time... it's a nice feeling!

Regards,

Dan
  • #245
  • Sep 25, 2010 12:23am Sep 25, 2010 12:23am
Quoting lizpet
I have just done a google search for " Trendline Scanner" (idle hands)

"The Ramp Chart Pattern Recognition" scanner looks interesting but may be more useful for stock trading where a large number of stocks are considered?

I have NO experience in using this software!!

Has anyone used it and found it useful?

Peter
Hi Peter,

Hopefully this isn't considered "commercial" or "promotional" but I have used prorealtime (google it if you don't know it). It is a commercial product but you can use a free version of it.

It has some good features and can list currencies or stocks etc that are near trendlines, breaking out from trendlines, s/r, triangles etc.

However, I don't use it for that. I prefer to do my own analysis and trendlines are only part of the setup - the most important part is picking good s/r levels to trade from and the best way to do that is using the good old human eye!

Regards,

Dan
  • #246
  • Sep 25, 2010 12:37am Sep 25, 2010 12:37am
Quoting bez3000
Hi Dan,

Well the thread looks like its going very well, i go away for a week and have to catchup through 8 pages of posts! lol

I have attached a couple of charts i found interesting:

euraud:
I am currently short of the S&R area shown on the chart.

usdsgd:
Looking to short if price makes it up to 1.3450 area.

Thats all i can find that i would call treatable in the charts i monitor at the moment.
All comments welcome.
Hi bez3000,

Good eye! Both good levels to trade from.

EUR/AUD is back up to the 1.4000 so I imagine you probably got taken out at breakeven on this one (or partial profit if that's your thing!) - I've been watching for a trigger to short at this level but so far nothing convincing. The daily chart has now formed an inside bar but it is a bullish close above 1.4000 that makes it less convincing. Still, a break below may well signal another move south.

Regards,

Dan
  • #247
  • Sep 25, 2010 12:40am Sep 25, 2010 12:40am
Quoting bez3000
Hi bez30000,

I would agree that the Euro trend is up at the moment. It's the only currency pair that I still touch trade and I have a couple of longs on at the moment - although, as I mentioned probably best to avoid talking about those types of trades for the time being!

Regards,

Dan
  • #248
  • Sep 25, 2010 12:55am Sep 25, 2010 12:55am
Quoting TraderJay101
Hi Dan the man,
Quoting TraderJay101

It seems as though you have stolen my methods!
How you doin?

No need to ask about your set up, Re above. Love your crazy avator.

I wanted to ask you about your money management.

Long...


Hi Jason,

The crazy avatar - my little dedication to one of my favourite bands!

I agree with what you are saying about risk/reward. I think that is generally for people who are trading shorter term and who need to factor in a risk weighting that will allow a string of loosing trades to develop.

With this strategy, being a long term positioning method, risk to reward is somewhat different. Once learned, you are highly unlikely to have a string of loosing trades - there will be a couple and there will be a lot that breakeven but due to the fact that we are trading long term they are spaced out and other positions that are in profit tend to hedge those losses (in a way).

With regards to % risk per trade - I think this comes down to your own comfort level. 1 or 2% is good because it is psychologically easy to risk; but someone who has traded this way for sometime and is confident in their abilities could quite happily put on 5 or 10% per trade, so long as they are being "picky" in choosing high probability setups. Please note though, newbies should stick to "demo" trading only and never risk more than 1 or 2% in the beginning!

Now on to the hard question... why am I here? Well I actually found FF to be quite a good place to help me learn technical analysis and I wanted to be a part of that for other guys. I have studied TA for quite a few years now and have finally developed my own set of skills that have made me profitable over the last couple of years and despite what cynics might suggest - I am happy to try and help other aspiring traders to make it too. There are a lot of snake oil salesmen out there and I wanted to create a thread that people could come to learn to trade without that worry.

My second reason is that I wanted to create a thread where like minded traders could discuss potential setups and trading opportunities. This is something that I did on my earlier thread but I never really outlined the strategy. Eventually I would like this thread to evolve into discussing other possible setups including stocks and commodities etc and a group of traders looking for possible setups must be better than one!

Finally, have you ever noticed that when you talk to your friends or family about trading they kind of glaze over and give you a blank expression that says "what the hell are you on about"? Happens to me all the time! Same when I talk about politics actually lol! Anyway, it's good to be able to talk about trading to other people who are of a similar mind!

Regards,

Dan
  • #249
  • Sep 25, 2010 1:01am Sep 25, 2010 1:01am
Quoting fxlan
DanUK thank you for your effort in sharing your method!

What do you think about this Eur/chf? How do we approach this situation? This is probably on your watch list? (if i missed something about this in the thread i apologize)
Hi fxlan,

EUR/CHF is a bit erratic - it has fairly big swings which probably makes it one of the harder pairs to trade if you are new to it (sorry if you aren't... just a general statement).

However, the s/r level around 1.3300 and the 50% retracement seems to be holding at the moment but if it doesn't I will look to 1.3500 for a possible setup south.

Hope that helps!

Regards,

Dan
  • #250
  • Sep 25, 2010 1:05am Sep 25, 2010 1:05am
Quoting Scarlett
This is a great thread and it fleshes out for me some of the questions I had about the trading style of Sam Seiden who is my hero.
You have a lot of similar points and I love it.

Re post 219: in your illustration of the breakout of the lower high to confirm a trend change, are you believing the confirmation when it happens on a daily or bigger frame or would you believe it on a 4H?

Thanks for sharing your ideas; they are excellent.
Hi Scarlett,

Thanks for the compliment! I have seen a couple of the Sam Seiden videos that are floating around about support and resistance and they make a lot of sense to me!

Yes, I am really looking for the breakout/confirmation to take place on the daily (or higher) time frames. I do use H4 for entries but not for analysis (but I would prefer it if we all kept to the dailies only for now).

Regards,

Dan
  • #251
  • Sep 25, 2010 1:08am Sep 25, 2010 1:08am
Quoting bboyomega83
im lucky i got in with a break above the consolidation at 2950 also i beleive we will see a pullback between today and mid next week to allow us to enter.

This is where it gets tricky as to how deep do you allow it to retrace to before we enter again? That where i want your opinion Dan.
Hi bboyomega83,

It depends on the situation. In most cases I am looking for a reasonable discount to enter... so a pullback to around the 50% level is ideal. However, there are times when price breaks through a key s/r level and then retests it... this often produces a smaller retracement but in combination with a good candlestick setup still produces a good trade.

Clear as mud?

Hopefully it makes some sense but generally speaking a bigger retracement is better because it normally means your trade will have more room to move before you need to get to breakeven.

Regards,

Dan
  • #252
  • Sep 25, 2010 1:09am Sep 25, 2010 1:09am
Quoting TGpop
gah, lost going short eurusd, was thinking the long term down move was continuing after this small retrace. anyway losers happen . im actually thinking of making a permanent hedge plan to try and ride trends with less drawdown on open pnl, instead of scaling out
That's an interesting idea and something I have thought about too. I haven't actually done it but may do some testing. Let me know what happens.

Regards,

Dan
  • #253
  • Sep 25, 2010 1:13am Sep 25, 2010 1:13am
Quoting EricOutDaRed
Hello Dan,
Quoting EricOutDaRed

I have another question that may seem vague and broad. How long do you typically hold your trades with this strategy?

For instance, do you profit 3,4,5 months on a 6 month trend or 1,2,3 weeks on a 2 month trend using daily charts? This would help me better define trends. Same question for H4 charts.

Thanks...


Hi Eric,

First of all let me say that generally I am looking at the same thing whether I am using H4 or Daily charts. The analysis is still done off the daily charts - which is why I am suggesting everyone avoids the H4 timeframe for now, until they have a clear understanding of how this works!

With regards to the length of time... it depends on the currency pair. I will basically be looking to hold on for as long as I can. It wouldn't be uncommon to hold onto trades for six months or more.

Regards,

Dan
  • #254
  • Sep 25, 2010 1:17am Sep 25, 2010 1:17am
Quoting GJP
Hi Dan,

EUR/CHF looks like approaching a major S/R area at 1.3100 Would you enter this trade once that area has broken through? Providing there is other confluence. A chart would better show this, if I get a chance later I will get a chart up.

Cheers.
Hi GJP,

A chart may help but I think what you are saying is that if it breaks under this level - will I look to sell? The answer would be no - I would be concerned about price running into the 1.3000 level. What I would be looking for is a bearish candlestick setup higher up... say 1.3500 would be of interest to me.

Regards,

Dan
  • #255
  • Sep 25, 2010 1:18am Sep 25, 2010 1:18am
Quoting Porkpie
Nice to see you back Dan. Can't beat the trend trading. Simplicity rules. Reading an excellent book on trend trading, 'Trend Following' by Michael Covel. Keep up the good work.
Hi Porkpie,

Thanks! I haven't read the book but trend trading is definitely the way to go imho!

Regards,

Dan
  • #256
  • Sep 25, 2010 1:22am Sep 25, 2010 1:22am
Quoting gododdin
Hi Dan - I think I'm getting it now! One thing still puzzles me though - if you add to a position because the trend is continuing, how do you manage the multiple stops? Do you move the initial stop up to match the second position stop and so on, so that you can then manage them as one stop effectively, or do you manage them separately (seems a bit messy).

Thanks again
Hi gododdin,

You are right... managing multiple stops would be a lot of hard work! bez3000 answered you correctly (thank you bez) - I tend to manage them all as if they were one. And as bez mentioned, I tend to use a hard stop as a disaster stop... incase for some reason (that I don't want to speculate about lol) I couldn't trade - I have hard stops in place to prevent any major damage and take profit if applicable. But I tend to close manually as and when I see fit! This is one part of the method that takes a bit of work... exits maketh the man!

Regards,

Dan
  • #257
  • Sep 25, 2010 1:23am Sep 25, 2010 1:23am
Quoting TGpop
H4 cadchf looks like a beauty short
Hi TGpop,

I'm not seeing a short? Care to post a chart... although I would prefer it if we kept to dailies for now please!

Regards,

Dan
  • #258
  • Sep 25, 2010 1:31am Sep 25, 2010 1:31am
Ok I think I have caught up with the Q+A. If I missed anyone out, I apologise - it wasn't on purpose; please ask again!

I am going to go over my old posts and see where we are but I think I have explained the bulk of it. If anyone has anything else that isn't clear please feel free to ask.

I do just want to go over the H4/Daily thing one more time though.

All my analysis is done on a daily or higher time frame... so all my support/resistance levels, swing analysis etc is done on the higher time frames.

I am then looking for a trigger (candlestick patterns etc) on the Daily charts for an entry. This is where I would like us to stay.

I do also use H4 signals for entries but they would be at the same levels I am looking at for a Daily chart signal. However, for the time being let's keep to Daily charts only please. They are more reliable and much better for learning - only once you are profitable trading the dailies should you consider taking entries from the H4 charts.

Regards,

Dan
  • #259
  • Sep 25, 2010 1:46am Sep 25, 2010 1:46am
I will leave a little space now if there are any more questions or anything that isn't clear please ask.

Other than that though I think we are about ready to start posting some possible trade setups.
  • #260
  • Sep 25, 2010 2:49am Sep 25, 2010 2:49am
Quoting DanUK
I will leave a little space now if there are any more questions or anything that isn't clear please ask.

Other than that though I think we are about ready to start posting some possible trade setups.
Looking forward to it Dan, let's get some charts up as I think a chart is worth it's weight in gold when learningto trade for everyone.
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