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Attachments: Trend Breakout/Breakdown Method
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Trend Breakout/Breakdown Method

  • #1
  • First Post: Edited Aug 17, 2011 11:07am Jan 2, 2011 5:32am | Edited Aug 17, 2011 11:07am
Guys, i had read many strategies on this thread about the different methods of entering and exiting a position. Personally, me myself had used many strategies before and the one i found the most accurate where the risk is low and the reward is high is the trendline breakout/breakdown strategy. Look at the attached chart, my entry is on the circled blue oval.

The breakout is where i will long and the breakdown is where i will sell short. The cut loss depends. It can be the low/high of the breakout/breakdown OR it can be 1 bar below/above the first breakout/breakdown of the trendline. Of course, there will be times of false breakout/breakdown as shown on attached, therefore you can always apply the same cut loss strategy. As for where to take profits? This will be the first breakout/breakdown when it breaks the down/up trendline.

Personally, for my own trading style, i use the breakout/breakdown strategy together with market psychology to put the winning % on my side. What do you guys think? Also you guys can check out my blog at http://stockmarketmindgames.blogspot.com
  • #2
  • Jan 2, 2011 6:35am Jan 2, 2011 6:35am
I like trading breakout/down on trend lines. However, there are too many variations in drawing a trend line. Finally, i stick to TD Lines.
福 子 Victor V
  • #3
  • Jan 2, 2011 7:16am Jan 2, 2011 7:16am
Quoting ronaldksmmg
Guys, i had read many strategies on this thread about the different methods of entering and exiting a position. Personally, me myself had used many strategies before and the one i found the most accurate where the risk is low and the reward is high is the trendline breakout/breakdown strategy. Look at the attached chart, my entry is on the circled blue oval.

The breakout is where i will long and the breakdown is where i will sell short. The cut loss depends. It can be the low/high of the breakout/breakdown OR it can be 1 bar below/above the first...
great brother,,
i hope u still update your thread,,,

if I more often use the pull back rather than a breakout
only an analysis, and I'm always wrong, don't follow me,
  • #4
  • Jan 2, 2011 7:21am Jan 2, 2011 7:21am
Quoting camvcvoo
I like trading breakout/down on trend lines. However, there are too many variations in drawing a trend line. Finally, i stick to TD Lines.
I agree with you on the variations of trendlines, therefore one must put a lot of practice and effort into drawing trendlines to master it. Initially, i was also drawing trendlines that i don't think it is correct, however after many practices and a better knowledge of the market, i managed to fine tune the way i draw trendlines and got it right almost 95% of the time.

Hey camvcvoo, what are TD lines?
  • #5
  • Jan 2, 2011 7:28am Jan 2, 2011 7:28am
Quoting andelumut
great brother,,
i hope u still update your thread,,,

if I more often use the pull back rather than a breakout
Update what thread?

Pull back strategy is good because you can buy at support, however the risk is higher since you will need to identify whether its accumulation for higher prices or distribution for lower prices. That's where market psychology comes in..
  • #6
  • Jan 2, 2011 7:32am Jan 2, 2011 7:32am
Hi

Can you explain with a chart or 2 how you "i managed to fine tune the way i draw trendlines and got it right almost 95% of the time."

tHANKS

Monk
  • #7
  • Jan 2, 2011 7:42am Jan 2, 2011 7:42am
Quoting TheMonk
Hi

Can you explain with a chart or 2 how you "i managed to fine tune the way i draw trendlines and got it right almost 95% of the time."

tHANKS

Monk
To put it simple, the trendlines need to touch as many high/low points as possible to create a trend channel. First draw the trend of the bigger timeframe first, meaning the long term trend of the market, then draw smaller timeframe trend channels within that bigger timeframe to time your entry and exits.
  • #8
  • Jan 2, 2011 10:09am Jan 2, 2011 10:09am
Quoting ronaldksmmg
Guys, i had read many strategies on this thread about the different methods of entering and exiting a position. Personally, me myself had used many strategies before and the one i found the most accurate where the risk is low and the reward is high is the trendline breakout/breakdown strategy. Look at the attached chart, my entry is on the circled blue oval.

The breakout is where i will long and the breakdown is where i will sell short. The cut loss depends. It can be the low/high of the breakout/breakdown OR it can be 1 bar below/above the first...

aint got a clue whats going on inside that chart mate . no idea what you are trying to get at....
  • #9
  • Jan 2, 2011 5:58pm Jan 2, 2011 5:58pm
Quoting whatfx
aint got a clue whats going on inside that chart mate . no idea what you are trying to get at....
Hey mate, its a simple yet effective strategy. The bigger timeframe controls the smaller timeframe. So look at any charts, be it stocks, forex, commodities, etc. Draw the big trend first. Saw my chart? The big trend is an uptrend. Inside the big trend, draw the short trend to time your entry and exit. The entry is always when it breakout/breakdown of the short term trend channel. The theory is when it breakout/breakdown of the trend channel, the paradigm is geared towards a new uptrend/downtrend. Alternatively, visit my blog at http://stockmarketmindgames.blogspot.com there are many other examples besides trend trading.
  • #10
  • Jan 3, 2011 6:34am Jan 3, 2011 6:34am
To further elaborate how i draw trendlines, see those blue circled ovals, to draw a strong firm trendline, the trend channels must touch as many points as possible. From this picture, i guessed most of you can see where is the entry and exit point. With much practice, it is not difficult to draw trendlines.
Attached Image (click to enlarge)
Click to Enlarge Name: trendline.jpg Size: 113 KB
  • #11
  • Jan 3, 2011 6:56am Jan 3, 2011 6:56am
Looks like the start of a Nice Thread on a very good topic ronaldksmmg . Also compliments on a very nice blog. Look forward to hearing more and participating as we kick off a new year.

Subscribed

Take Care
Always Learning
  • #12
  • Jan 3, 2011 7:31am Jan 3, 2011 7:31am
Quoting JayTrader
Looks like the start of a Nice Thread on a very good topic ronaldksmmg . Also compliments on a very nice blog. Look forward to hearing more and participating as we kick off a new year.

Subscribed

Take Care
Thanks for your compliment Jay!
  • #13
  • Jan 3, 2011 7:52pm Jan 3, 2011 7:52pm
Quoting ronaldksmmg
I agree with you on the variations of trendlines, therefore one must put a lot of practice and effort into drawing trendlines to master it. Initially, i was also drawing trendlines that i don't think it is correct, however after many practices and a better knowledge of the market, i managed to fine tune the way i draw trendlines and got it right almost 95% of the time.

Hey camvcvoo, what are TD lines?
Please refer to attached for more details. Personally, i find this kind of trading trend lines breakouts/downs more specific and mechanical.

Cheers!

Attached File(s)
File Type: pdf TD LINES.pdf   388 KB | 49,676 downloads
福 子 Victor V
  • #14
  • Jan 3, 2011 8:17pm Jan 3, 2011 8:17pm
Quoting camvcvoo
Please refer to attached for more details. Personally, i find this kind of trading trend lines breakouts/downs more specific and mechanical.

Cheers!

Interesting. Looking at the attached, it is identical to what i am drawing maybe a little difference here and there. I had huge success using the trend trading method i posted as i almost always caught the low and high. If you see my attachment, if you buy on the trend breakouts and sell short on the trend breakdown, that's almost the low and high of the prices.
  • #15
  • Jan 4, 2011 6:51pm Jan 4, 2011 6:51pm
Anyone here trade the US dollar index? I was late on this instrument, however it revealed signs of strong strong buying.
  • #16
  • Jan 5, 2011 4:14pm Jan 5, 2011 4:14pm
My broker has no trading facility on USD Index. However, i have yet to find one MT4 broker to offer trading on USD Index. Also, do you know if anyone out there provides a good charting of USD Index for free?
福 子 Victor V
  • #17
  • Jan 6, 2011 9:44am Jan 6, 2011 9:44am
try netdania. Its web based and free!
  • #18
  • Jan 9, 2011 7:35pm Jan 9, 2011 7:35pm
Anyone here so far had success with the trend breakout/breakdown method?
  • #19
  • Jan 10, 2011 5:34am Jan 10, 2011 5:34am
Quoting ronaldksmmg
Anyone here so far had success with the trend breakout/breakdown method?
Looks like drawing trendlines is a rocket science thing
福 子 Victor V
  • #20
  • Jan 10, 2011 5:26pm Jan 10, 2011 5:26pm
Quoting camvcvoo
Looks like drawing trendlines is a rocket science thing
LOL!! Drawing trendlines is an art. Seems like not many people trust the power of trendlines. Trendlines take away the complex and complicated indicators which is often messy and difficult to understand. That's why the 95% loses $$ and the 5% make it.
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