Attachments: DanUK's Advanced Trend Trading Strategy

DanUK's Advanced Trend Trading Strategy

#841
Dec 23, 2010 5:22am Dec 23, 2010 5:22am

paulwales
| Joined Dec 2010 | Status: Trader | 50 Posts

Quoting NeoRio

Disliked

Doesn't look that NU short is turning out too good...sorry to see. I didn't take the NU long I discussed last week, but it would be in profit by about 15 pips right now...anyone's call as to how it could go now.

The EJ short I took last week is currently at +243 pips...will hold till the 108.33 area to see if it breaks through that last low from several weeks ago...or if it stalls there.

Regards

Ignored

Hi Neo.

Although I'm gutted about losing this E/J trade (if you remember we got in at about the same time, but had different S/L and mine was hit at -45) I am really pleased that you kept the trade because I can see what could have happened with better MM on my part. In other words, I'm taking the positives.

Well done.
Regards
Paul

#842
Dec 23, 2010 10:35am Dec 23, 2010 10:35am

NaughtyPip
Joined Aug 2010 | Status: Trader | 1,282 Posts

Quoting NaughtyPip

Disliked

I've just sold this off the break of the daily pinbar, also off 61.8 fib and weekly s/r, and downwards trendline. Definitely not the best time of the year to be trading but its just a small position, Lets see.

Ignored

#843
Dec 23, 2010 2:57pm Dec 23, 2010 2:57pm

NeoRio
| Commercial User | Joined Aug 2009 | 647 Posts

Quoting NaughtyPip

Disliked

Ignored

Not to worry, NaughtyPip, I think your short entry was a better technical setup than my long bias; the swing analysis definitely points to a down trend. The only thing(s) that were pushing me towards going long were the 200EMA, the support level of 0.7348 and the daily TL being bounced off of...oh, and the Stochastic (it was over sold). This time of year is notorious for erratic PA.

Kind Regards,
Neo

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Sentiment: Short on cash. Long on hope.

#844
Dec 23, 2010 4:27pm Dec 23, 2010 4:27pm

uncle gromit
| Joined Jul 2008 | Status: Trader | 183 Posts

Fast forward 4 days and we find ourselves here.

Now is this:-

A) A false break from an inside bar into a double top ?
B) Profit taking before another assault on new highs ?
C) End of year book squaring ?
D) All of them.

Question No. 2

Trend up or down?

Answers on a postcard please.

Regards

Paul

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Never underestimate an idiot.

#845
Dec 24, 2010 1:52am Dec 24, 2010 1:52am

NeoRio
| Commercial User | Joined Aug 2009 | 647 Posts

Quoting uncle gromit

Disliked

A) A false break from an inside bar into a double top ?
B) Profit taking before another assault on new highs ?
C) End of year book squaring ?
D) All of them.

Question No. 2

Trend up or down?

Ignored

Are you long the ACa? Sorry if I missed your entry post, but it sounds like you may be in a long, or long biased? I'd pull a fib from the last significant swing low to the high that formed around the 28th of October to see if that reversal area around the 1st of December was a 50'ish Fib retracement.

The "false break" that you mentioned, it is not coming off of a pullback. Generally it's best to enter the market on pullbacks and not breaks of consolidation. I personally do trade breaks of consolidation, but only on smaller TFs. If you want to get in these ATT trades at the best place, it would be at a pullback.

The time of year I'm sure is having a great effect on all pairs right now. Not the best time for ATT, but actually a pretty good time for BO trading on the smaller frames...which have given some pretty neat trades these past 2 weeks.

Kind Regards,
Neo

Sentiment: Short on cash. Long on hope.

#846
Edited 2:57am Dec 24, 2010 2:26am | Edited 2:57am

Windpip
| Joined Nov 2010 | Status: Trader | 9 Posts

Quoting NeoRio

Disliked

Generally it's best to enter the market on pullbacks and not breaks of consolidation.

Ignored

Hi Neo,
I do not understand what you mean with the above statement (I am a newbie

).
Do you take the inside bar setup only after a retracement and you do not take it when there is a continuation of the trend (after a period of consolidation)?
Can you please explain it? Thank you!

#847
Dec 24, 2010 4:47am Dec 24, 2010 4:47am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting TGpop

Disliked

i've only just shorted eurusd off an H4 pin bar at 1.34, i have never pyramided to a winning position so in order to break into 'riding it all' i'm going to scale out at the lows and back in when another signal forms.
what i will do is look for good entries of s/r , once those hit their targets i will scale out most of them, say 2/3 and then when another trade comes along i will add the 2/3 back in but further away, kind of an out of volatility trailing stop on the trend.

i am only trading eurusd dan, do you think only one pair is enough?
i will...

Ignored

Hi TGpop,

Sorry for the slow reply... I've been in bed most of the week with flu!

I'm not sure about scaling in and out... seems a bit over complicated for my liking! But as far as trading one currency pair goes - I would say that in theory trading one pair would be fine. The gains I have made from the EUR/USD this past year have been fantastic - and I don't mean that to sound big headed; I just mean that there have been plenty of great opportunities trading the Euro on it's own.

I think it would be fair to say though that confining yourself to just the one pair does have a potential downside. And that is, it could be argued, that you are unnecessarily restricting yourself. For instance it may be that the Euro enters a range of consolidation and it becomes unclear which direction you want to trade whilst the Pound may be in a clear trend giving great signals that you would have traded if you had been watching.

So my advice would be to concentrate on one currency pair if you feel most comfortable with that but given that we are mainly trading daily candles here it shouldn't do any harm just to keep an eye on a couple of other currency pairs as well, as part of the learning experience.

Now... on to your little sin! EMAs! I am not an anti-indicator person however I genuinely believe that you will learn to read price action much better if you do without them. I know this is easier said than done but the results are worth it if you persevere. These days I can look at almost any chart and without the need for plotting anything other than price I could tell you what the trend is. The reason I can do this is I have learned to "read" price and understand what it is telling me rather than rely on an indicator to tell me what price is already telling me.

If you (or anyone else) is struggling with the concept of reading price action to gauge the trend and feels the need to add an indicator or two to help please STOP and ASK! The whole point of this thread is to help people learn and if people need help to learn this aspect then we should talk about it here. Arguably, this is the most important skill to achieve when it comes to this method and perhaps any other trend based trading method.

Regards,

Dan

#848
Dec 24, 2010 5:30am Dec 24, 2010 5:30am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting PipRiderFX

Disliked

Hi Dan,

Could you please provide me with some figures on the expectancy of the system. I have been trying to apply this over the last few months and keep getting whipped about by the markets.

Pretty much all if the trades I have entered have shown me profit only to turn around and stop me out at break even or for a loss. Granted The losses are not to big but I do wonder whether it would be beet just to take the profits off the table.

Could you please let me know since you turned to this approach of riding the big moves what your expectancy...

Ignored

Hi PipR,

To be honest I have never before bothered to calculate expectancy or much else. When it comes to measuring performance I do it based on whether I am making a profit or not. I think too many traders obsess with calculating the best way to extract the most from the market but fail to do so because they don't put the same amount of effort into their actual trading skills.

Also, due to the way in which this trading method grows with the trend it is hard to say that expectancy will be "X" because you never know how far a trend is going to go.

That being said, based on this years' performance, a very quick and crude number crunching exercise comes out with expectancy of 760 pips profit per trade.

Now, coming back to your original problem... the fact that you are getting whipped out of your trades. First of all, let me just say that I have tried to trend trade with a smaller trailing stop and had success but all in all I would say the longer term approach is more profitable and much less stressful. And to be frank, it is easier too. I should also stress that it is the exit that makes the trader! There are many ways to enter the market but if you aren't leaving at the right time (either too late or too early) then you aren't going to make the most out of your endeavor.

Getting whipped out of the market happens but let's not automatically assume it is a fault of the method. It probably just means you need to either refine your entry technique or adjust your trade management to suit the market condition. It is, of course, easy to say this and something else altogether to actually do it. But as I mentioned in an earlier post - that's what this thread is for! If you are having problems with your entries then please post them here and we can analyse and discuss.

So, if you would like to post a couple of charts, perhaps even of these recent whipped trades we could have a look and see what's really going on!

Regards,

Dan

#849
Dec 24, 2010 5:40am Dec 24, 2010 5:40am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting NeoRio

Disliked

This NU setup looks interesting (for a long with a break above today's bullish candle...if we get one)...but I'm torn on this one as the trend looks bearish based on swing analysis. The Weekly TL and the 200 ema acting as support coupled with the 61.8% level getting a clean bounce are making me thing of testing the bullish waters out...but it's Christmas week! What to do!??

Ignored

Hi Neo,

Although I personally wouldn't be placing any trades until next year I see NU as bearish at the moment. If it had been a normal trading week I think I would have been interested in watching for a selling opportunity at 0.7500.

Regards,

Dan

#850
Dec 24, 2010 5:56am Dec 24, 2010 5:56am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting NeoRio

Disliked

unless...you drop it down to the H1...

Ignored

Lol! Now that's cheating!

Just wanted to bring something up that I felt was important with regards to this setup missing the 50% retracement level.

The most important thing to look for is for price to retrace to a key support/resistance level. If that happens, and price forms one of our setup candles then I am interested in trading. It doesn't necessarily have to have a trendline or a fib level present.

My checklist, goes something like this...

1. Are we with the trend?

2. Has price retraced to a key support/resistance level?

3. Has price retraced to a fib level?

4. Has price retraced to a trendline?

5. Has price formed a "trigger"?

If you can answer yes to 1, 2 and 5 you have got yourself a setup. If you can answer yes to 3 and 4 as well you've got even more reason to believe in your trade!

Of course, there are no guarantees - things could still go wrong even if you feel you have the perfect setup. But so long as you adhere to these rules you shouldn't go far off course, with a little practice!

Regards,

Dan

#851
Dec 24, 2010 6:05am Dec 24, 2010 6:05am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting decades

Disliked

i don't use fundamentals , but as an aside ...some states are broke...thier muni bonds maybe headed toward junk status .... this muni bond ETF is looking spooked

anyone know where i can find a good scanner ? would like to scan the universe of etf's and currency pairs for hammers , engulfing candles and inside bars.

Ignored

That's an interesting setup you've got there! I am not overly keen on inside bars but when I do trade them I use the break of the setup bar as the entry not the actual "inside" bar. The reason being that the "inside" bar signals indecision within the high and low of the previous (engulfing) bar. So, from a technical perspective if you enter on the break of the "inside" bar you aren't entering based on an "inside bar setup". You are just trading off of a "down" day.

I see you are using Pro Real Time - I believe they have a scanner built in to scan for candlestick patterns.

Regards,

Dan

#852
Dec 24, 2010 6:08am Dec 24, 2010 6:08am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting Maveri4k

Disliked

On a side note, while trendlines were drawn by connecting relevant highs/lows of candles together, I would like to seek the opinion of everyone as to how they draw Support/resistance lines; do you attempt to connect the high/lows of candles just like trendlines or the close of the candles instead, or trying to incorporate both to make it a somewhat best-fit line? Your input is highly appreciated.

Thanks and regards!

Ignored

Hi Maveri4k,

I would like to confirm what uncle gromit said. S/R levels are best drawn and aligned with round numbers. However, this method takes into account only the key levels that tend to be seen on a weekly chart and these do not usually fall as a "to the pip" line - they tend to be an area of 50 - 100 pips.

Regards,

Dan

#853
Dec 24, 2010 6:11am Dec 24, 2010 6:11am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting paulwales

Disliked

Hi Neo.

Although I'm gutted about losing this E/J trade (if you remember we got in at about the same time, but had different S/L and mine was hit at -45) I am really pleased that you kept the trade because I can see what could have happened with better MM on my part. In other words, I'm taking the positives.

Well done.
Regards
Paul

Ignored

Hi Paul,

It's often hard to deal with missed opportunities so it's good to see you stay positive! The thing to remember is that you correctly identified the setup - it was only a minor technicality that caught you out.

Regards,

Dan

#854
Dec 24, 2010 6:17am Dec 24, 2010 6:17am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting uncle gromit

Disliked

Fast forward 4 days and we find ourselves here.

Now is this:-

A) A false break from an inside bar into a double top ?
B) Profit taking before another assault on new highs ?
C) End of year book squaring ?
D) All of them.

Question No. 2

Trend up or down?

Answers on a postcard please.

Regards

Paul

Ignored

Hi Paul,

It's a little more tricky because of the time of year but if I was looking to trade this at the moment I would be thinking of buying.

I would like to see price come down to test 1.0000 and form a hammer (or another nice looking trigger) and then buy the break upwards. If, however price dropped to 1.0000 and broke below it would be time to reassess this situation.

However, even if this did happen at the moment I wouldn't trade it... trading is over for me until 2011!

Regards,

Dan

#855
Dec 24, 2010 6:22am Dec 24, 2010 6:22am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting Windpip

Disliked

Hi Neo,
I do not understand what you mean with the above statement (I am a newbie ).
Do you take the inside bar setup only after a retracement and you do not take it when there is a continuation of the trend (after a period of consolidation)?
Can you please explain it? Thank you!

Ignored

Hello Windpip,

I think you have understood correctly. This method is not about trading inside bars as "continuation" bars but only when price retraces back to an "area of interest".

Regards,

Dan

#856
Dec 24, 2010 6:27am Dec 24, 2010 6:27am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Quoting uncle gromit

Disliked

Fast forward 4 days and we find ourselves here.

Now is this:-

A) A false break from an inside bar into a double top ?
B) Profit taking before another assault on new highs ?
C) End of year book squaring ?
D) All of them.

Question No. 2

Trend up or down?

Answers on a postcard please.

Regards

Paul

Ignored

Hi Paul,

Just realised that I didn't answer Question No. 1! And to be honest I don't think I or anyone else really can. Truth is, no one knows for sure what price is doing or is going to do. All we can do is ask the right questions and see if we can make an educated guess as to what price is most likely going to do. Question No. 2 was one of the "right" questions.

The next question you should be asking yourself is "if I am going to trade this (regardless of direction) where would I be interested in trading from"? Or asked another way... where are the "areas of interest" on that chart?

Regards,

Dan

#857
Dec 24, 2010 6:31am Dec 24, 2010 6:31am

DanUK
Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts

Right chaps, I think I am up together with all Q&A now! I will continue to check back to see if there are any more questions or discussions to be had but for now I would like to wish everyone a Merry Christmas and a Happy & Prosperous New Year!

Regards,

Dan

#858
Dec 24, 2010 7:11am Dec 24, 2010 7:11am

NaughtyPip
Joined Aug 2010 | Status: Trader | 1,282 Posts

Quoting DanUK

Disliked

Right chaps, I think I am up together with all Q&A now! I will continue to check back to see if there are any more questions or discussions to be had but for now I would like to wish everyone a Merry Christmas and a Happy & Prosperous New Year!

Regards,

Dan

Ignored