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DanUK's Advanced Trend Trading Strategy

  • #1,021
  • Edited 3:59am Jan 28, 2011 3:44am | Edited 3:59am
Quoting DanUK
Hi Paul,

I finally exited my EUR/CAD short with less than I had wanted but a profit nonetheless.

I had two positions that remained open (indicated on my chart by the red arrows).

Once price came up and pierced the 1.3250 S/R level (on the 14th Jan) I moved my stop to the high of that bar. Price then dropped the following day and I figured the tend would resume... but I was wrong!

[color=black][font=Verdana]On...
Hi Dan
Have you ever considered buying options( or selling them to create a credit type spread) to offset your position when it retraces. We cant hedge in the US, so this is a way to offset pullbacks and such till the market figures out its direction. In the above example you would have bought a Eur$ Call or a Cad$ Put depending which was offering the best price ( I think i have the direction right on the Options, early for me) option on the commodity market to offset the decrease in pips on your current position . Something to consider.

Take Care
Always Learning
  • #1,022
  • Jan 29, 2011 4:02am Jan 29, 2011 4:02am
Hey Dan,

if this is already not discussed before, let me ask again. When do you set to BE in a trade? Or do you not set to BE, and let it either hit your SL or TP.

Thanks.

By the way, looking to short EA gchf and egbp now. Great potential trades!
Whether you can or you can't, you are both right.
  • #1,023
  • Jan 30, 2011 12:39am Jan 30, 2011 12:39am
Hi, below is chart of 2 pairs which i will be watching closely in the coming week. as usual, any comments are welcomed.

First pair is EU. Price has reached major resistance region and price has just broken a recent upwards trend line. there's also a broken trend line that is acting as a resistance now. Even though the last candle is engulfing pattern( am i right?), i would be waiting for the retracement before entering upon a signal.

Next pair is the AUDNZD. I understand DanUK has a short position in this pair and i missed the entry. it's okay and now, price has broken down the outer trend line and seems to be retesting it. I will be watching and waiting for signal for me to short. I would be cautious of the 1.27 region too.
Attached Images
  • #1,024
  • Edited 3:18am Jan 30, 2011 2:57am | Edited 3:18am
Quoting JayTrader
Hi Dan


Hi Jay,

I certainly see what you are saying. I do in fact hedge trades if the situation is right and I get a solid signal to do so. In the recent case of the EUR/CAD the situation would have been right to place a hedge trade (in so much as the retracement was always going to be severe if it continued into a new trend) but I didn't get a good signal to place a hedge trade (I base entries on the same criteria... i.e. using support/resistance and candlestick formations).

Actually, you will see that the up-move started it's ascent on the 12th January which formed a nice bullish outside bar - if it had closed above 1.3000 I just might have taken it.

I haven’t really discussed hedging trades on the thread yet as it starts down the route to countertrend trading which is something I would rather avoid. However, it is a useful tool to consider once you have become more acquainted with the trend-based method.

Regards,

Dan
  • #1,025
  • Jan 30, 2011 3:17am Jan 30, 2011 3:17am
Quoting fartist
if this is already not discussed before, let me ask again. When do you set to BE in a trade? Or do you not set to BE, and let it either hit your SL or TP.

Thanks.

By the way, looking to short EA gchf and egbp now. Great potential trades!
Hi,

I had to do a bit of searching but I knew I had posted something on this (I think I will make some kind of PDF linking all the important aspects of the method together at some stage):

For your info:

Stop Loss: http://www.forexfactory.com/showthre...07#post4026107

And this may also be relevant:

Exiting a Trade: http://www.forexfactory.com/showthre...90#post4027990

A quick note with regards to Friday’s EUR/AUD candle – it closed as a very nice looking bearish outside bar but the location is not quite right. The problem for me is that if you were to sell below this you don’t have any room for it to run until this trade hits potential trouble. Personally I would have preferred a close below the level shown in my first chart or for this to form at the higher level, as shown in my second chart.

Regards,

Dan
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eur_aud.png Size: 46 KB
Click to Enlarge Name: eur_aud_2.png Size: 46 KB
  • #1,026
  • Jan 30, 2011 3:39am Jan 30, 2011 3:39am
Quoting happypi
Hi, below is chart of 2 pairs which i will be watching closely in the coming week. as usual, any comments are welcomed.

First pair is EU. Price has reached major resistance region and price has just broken a recent upwards trend line. there's also a broken trend line that is acting as a resistance now. Even though the last candle is engulfing pattern( am i right?), i would be waiting for the retracement before entering upon a signal.

Next pair is the AUDNZD. I understand DanUK has a short position in this pair and i missed the entry. it's...
Hi happypi,

With regards to the E/U - it all depends on how you interpret the chart. If you read the most recent upswing as a retracement in the downtrend then you would take a sell signal at the level rather than waiting for a further move down and subsequent retracement (although I should note that that bar is not really an engulfing bar; a bearish engulfing bar would have opened higher than the close of the previous day, which it didn't on my feed, as well as closing lower than the previous day, which it did - engulfing bars are actually quite rare in forex).

However, if it is just a retracement then we are talking about a 900 pip retracement which is not very normal. In fact, a retracement on this pair greater than about 500 pips would be strange. Nothing is guaranteed in this game though.

If we take a look at the Euro from a weekly chart we can see that last week's bar formed a very pin-ish looking bar off of a key support/resistance level (as shown in my first chart). This could well be interpreted as a sign of a further move down, however a closer look will show that we haven't got much space if we were to short this bar before hitting the next important level of support/resistance (as shown in my second chart).

I am therefore interpreting this move down as a retracement in a developing uptrend and would anticipate a signal to go long at the lower s/r level (around 1.3500).

However, from a fundamental aspect I just can't see this up-move as being sustainable given the inherent problems in the Eurozone at the moment. So I am going to be cautious and open minded to the possibility of movement in either direction and will accordingly also look to sell if price makes it back below 1.3500.

Hope that helps and doesn't serve to confuse matters even more!

Regards,

Dan
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: eur_usd_daily.png Size: 46 KB
  • #1,027
  • Jan 30, 2011 5:19am Jan 30, 2011 5:19am
Hi Dan, thanks for ur explantion and to be frank, i'm a little confused. lol. It's okay, I will read and re-read your comments till I understand it.
  • #1,028
  • Jan 30, 2011 9:00am Jan 30, 2011 9:00am
trade bias should be long or short?
daily is on a clear down trend and is now at 61.8% retracement but seeing the last few weeks of price action, we observe a new uptrend could be forming. price is now on a resistance zone and with price signal, i will be looking for a buy trade. Wat will u do in this suitation?
Attached Image
  • #1,029
  • Jan 30, 2011 7:22pm Jan 30, 2011 7:22pm
Just wanted to thank all who post on this thread and especially DanUK of course for the tremendous effort put in to helping those of us who are aspiring to become successful traders, and are attempting to graduate from the shorter T/Fs up to the longer term T/Fs.
While I have always known that the more professional traders tend to focus more on the Daily/Weekly TFs, I myself, until I read through this thread could not find a way of looking at this longer term trading with anything more than fear, but hopefully now, I will be able to benefit from the generosity of the other traders here.
I hope I will be able to usefully post in the future with a view to repaying some of the kindness shown here.

Regards

Ken
  • #1,030
  • Jan 31, 2011 2:27am Jan 31, 2011 2:27am
Quoting happypi
trade bias should be long or short?
daily is on a clear down trend and is now at 61.8% retracement but seeing the last few weeks of price action, we observe a new uptrend could be forming. price is now on a resistance zone and with price signal, i will be looking for a buy trade. Wat will u do in this suitation?
It is pretty large for a retrace, and it is coming off a double bottom too. Problem is I dont have a lot of faith in EU against anything at the moment.
  • #1,031
  • Jan 31, 2011 6:32am Jan 31, 2011 6:32am
Quoting ken911
It is pretty large for a retrace, and it is coming off a double bottom too. Problem is I dont have a lot of faith in EU against anything at the moment.
Thanks ken for ur reply, after looking at the chart of EUDAUD again, my bias will be short for now instead. Reason being, it is with the Trend. I have overlook this fact. Price is actually at 38.2% retracement and at the 1.37 level. I would love to see a bearish signal for me to enter. I will be cautious of the broken trend line which may act as support now.

Regarding EU, I am unsure of where it is going currently. let's hope price will show us the way soon.

Thanks.
  • #1,032
  • Jan 31, 2011 3:55pm Jan 31, 2011 3:55pm
Hello again.

I am still looking for signs that this large retrace could be a trend change, but until then will also look for a short if it breaks the 1.37 and maybe even the trendline again. Maybe this is being too cautious and I will miss out quite a lot.
We also have quite a lot of AUD news today which might help one way or the other.
Appreciate your input.

Regards

Ken
  • #1,033
  • Feb 1, 2011 6:26am Feb 1, 2011 6:26am
could EURCAD be going down now? I have put a stop order at 1.3680 just below the pin-ish bar that appear on H4.
Attached Image
  • #1,034
  • Feb 1, 2011 1:04pm Feb 1, 2011 1:04pm
Quoting happypi
could EURCAD be going down now? I have put a stop order at 1.3680 just below the pin-ish bar that appear on H4.
Hi happypi,

I think there is a question mark over the trend on many of the Euro pairs at the moment. There seems to be a lot of strength in the Euro at the moment and I am personally more inclined to look for long positions on the EUR/USD and EUR/CAD.

However, that being said we have to read the signals as they come!

On to your trade though... my first question is: are you successful trading this method on the daily time frame? If not, you should not be looking to enter a trade off of the H4 charts - especially when the trend is not absolutely clear.

Secondly, if a "pin bar" or other such formations are not triggered within the next one or two bars (particularly on the H4 time frame) I would be even more wary of the setup. Ideally I would have wanted that pin bar to break immediately with a good downward push.

I hope you don't take this the wrong way but I think you might be getting ahead of yourself a little.

Regards,

Dan
  • #1,035
  • Feb 1, 2011 1:07pm Feb 1, 2011 1:07pm
Quoting ken911
Just wanted to thank all who post on this thread and especially DanUK of course for the tremendous effort put in to helping those of us who are aspiring to become successful traders, and are attempting to graduate from the shorter T/Fs up to the longer term T/Fs.
While I have always known that the more professional traders tend to focus more on the Daily/Weekly TFs, I myself, until I read through this thread could not find a way of looking at this longer term trading with anything more than fear, but hopefully now, I will be able to benefit from...
Hi Ken,

Thanks for your kind words! I know there is a lot of argument about timeframes around this forum but honestly I believe the longer timeframes are easier to read and more relaxed to trade. I also find they give me the freedom to not even worry about looking at a chart until near the end of the day. Working just an hour a day... that for me is the freedom I am looking for!

Regards,

Dan
  • #1,036
  • Edited 4:36pm Feb 1, 2011 4:17pm | Edited 4:36pm
Quoting happypi
could EURCAD be going down now? I have put a stop order at 1.3680 just below the pin-ish bar that appear on H4.
Hello again.

Due to my inexperience probably, I just can not determine the trend on EURCAD. I get different conclusion depending how far I zoom in/out.
As Dan says the EUR seems to be strong, but...I dont know why that should be!
I do actually have a Sell Stop on EURAUD @1.3570 on the basis that it has room to run, and would hopefully be clear of S/R. and it is with the trend.

Other than that I am Long AUDUSD @ 1.008 again with trend and with clear space for a while.

Just been taken in short on AUDNZD after clearing R/S and after near bounce from down trendline. (Not convinced about this one)
Edit: This short was a mistake, due to my not looking at all the factors. Will watch it closely to close with as small a loss as possible.

Regards

Ken
  • #1,037
  • Feb 1, 2011 4:28pm Feb 1, 2011 4:28pm
Quoting DanUK
Hi Ken,

Thanks for your kind words! I know there is a lot of argument about timeframes around this forum but honestly I believe the longer timeframes are easier to read and more relaxed to trade. I also find they give me the freedom to not even worry about looking at a chart until near the end of the day. Working just an hour a day... that for me is the freedom I am looking for!

Regards,

Dan
Hello Dan.

I am very new to longer TFs but so far, they do make a lot of sense, and "seem" to be easier to read.
Having said that, there are crosses at the moment, when I can not see the trend no matter what TF I look at or how much I zoom out. I am taking this as a sign to stay clear until a prominent trend shows itself. Probably just my inexperience though.

If I may, I would appreciate some guidance on one thing if you have time.

On some crosses, I am finding that my S/R "zones" are quite wide, and when I look at the chart I am finding that there is not a great deal of room between the low of one zone and the high of the next.
Either I am making the zones too wide, or I am putting too many of them in. Could you roughly give me an idea of how far apart your zones would be on say USDJPY and how wide on average the zone itself is.

I know you cant generalise but a rough idea would be a great help.

Many Thanks.

Regards

ken
  • #1,038
  • Feb 2, 2011 7:11am Feb 2, 2011 7:11am
hey dan! Thanks for sharing those charts! Esp the eur aud one.

I read through one of the link you posted, the one on eu. Where you netted 1000+ pips on that, i was wondering did you have a specific target before you enter the trade? Because it seems like you let the trade run as long as it kept making lower highs and lows.
So my qns is do you usually let your trade run or would you also have a fix target to take profit? Exampple a strong s&r level?

I like your last post in mentioning an hr a day for the freedom you need.

I totally am looking forward to reach that goal, trading the 4hr and daily as they are less stressful.

Thanks for all your effort you have put in, appreciate it
Whether you can or you can't, you are both right.
  • #1,039
  • Feb 2, 2011 7:17am Feb 2, 2011 7:17am
Quoting DanUK
Hi happypi,

I think there is a question mark over the trend on many of the Euro pairs at the moment. There seems to be a lot of strength in the Euro at the moment and I am personally more inclined to look for long positions on the EUR/USD and EUR/CAD.

However, that being said we have to read the signals as they come!

On to your trade though... my first question is: are you successful trading this method on the daily time frame? If not, you should not be looking to enter a trade off of the H4 charts...
Thanks Dan,

u're right, i think i'm trying to go too fast. alright, i shall only trade the dailies till i am profitable. till then, i still need lots of help from u and fellow traders in this thread. thanks in advance.
  • #1,040
  • Feb 3, 2011 1:13am Feb 3, 2011 1:13am
Ken911,

Just my humble opinion but i would say the current trend is up, i have attached a chart to explain why.
When the trend line was broken and price failed to make lower lows and started to make higher highs that’s the time to look at a possible trend change. If you had entered around the 1.33500 then i would be watching the current price level with interest to see if it will break above the resistance at 1.37000. Or if you are looking for entries now i would be waiting for price to prove it has past the S/R area of 1.37000 before making a long trade.
This is just my humble opinion though.

Bez

Quoting ken911
Hello again.

Due to my inexperience probably, I just can not determine the trend on EURCAD. I get different conclusion depending how far I zoom in/out.
As Dan says the EUR seems to be strong, but...I dont know why that should be!
I do actually have a Sell Stop on EURAUD @1.3570 on the basis that it has room to run, and would hopefully be clear of S/R. and it is with the trend.

Other than that I am Long AUDUSD @ 1.008 again with trend and with clear space for a while.

Just been taken in short on AUDNZD after clearing R/S and after near bounce...
Attached Image (click to enlarge)
Click to Enlarge Name: eurcad.jpg Size: 243 KB
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