This post will show you how to trade using trendline breakout method and Fibonacci level as the target or take profit area. On this example I am going to show you how this system works for you. No indicator needed. We only watch for the significant swing highs and swing lows.
In many cases, for example if we use M15 as our base for breakout trading, we can only get few pips and then the price already reverse against us. To avoid this, we can use lower time frame to catch the breakout earlier. See example below
M15 time frame trade setup
Hi, see you again in this blog. Here I want to share how to get 10 pips per trade with trendline breakout. Its a simple strategy without any indicator. You only need to learn how to draw trendline connecting supports or resistant. This strategy applies to any pairs and any time frame but I recommend to use M15 because we only want to get 10 pips .
SELL condition
Believe or not, any indicators are based on price. So, they will be always late and formed after the price. Personally, I don't like fancy indicators. MT4 application already equipped with many powerful indicators such as Bollinger Bands, CCI and Stochastic. I think with those indi, you can be successfully in trading. The key is risk management.
Here I want to show you how to trade without many confusing indicators. We will try to trade based on price action only with trendline. As long as I learn Forex, trendline breakout give me better result than any other strategy. Indicators such as Stochastic, CCI and MACD are helpful when there is divergence.
This method has been popular on some websites and there are also many people trade using this strategy. The idea of this trendline breakout with fibonacci is when price break a trend line, we wait until it break 100 Fibonacci level and the target is the next Fibo level.
Its a good trading strategy but the main problem is the stop loss. The stop loss is quite large. But its very accurate if we do it in correct manner. See the example below.
Trend line breakout is a simple and powerful trading strategy that works on any time frame and pairs. Here I want to show you a nice bullish breakout trading EURJPY on 31 July 2013. With a proper stop loss we can gain many green pips without having to lose your account.
On the chart above, I draw a trendline connecting highs. When price move up and break this trend line, I open buy with stop loss below the previous low. I only take 10-20 pips per trade and that's enough for me. Now I am waiting for the price to retrace down and maybe give a good sell signal.
Its now time for scalper. What do you think if we can get 5 pips per trade. Is it enough for you? For some people, 5 pips is garbage and not worthy but think again. For example we can open position 10 times per day, we can get 5x10 equal 50 pips per day. This method that I will show you give a pretty good probability. See my transactions today below
Click the image for larger view.
So, which technique that I used to get the above result? The answer is trend line breakout. I tried many indicators and EA but its too complicated to follow. Metatrader already equipped with many powerful tool we can use to trade with simple. See how I trade trend line breakout with only 8 pips target (minus 3 for spread). The only indicator that I am using is the EMA 60 as the trend indicator. I trade along with the trend. If the price moving above the EMA, I only take Long and if the price moving below the EMA 60 I only take short.
MACD Histogram is a good tool to help a scalper like me to enter the market any time whenever there is a trend line breakout. This indicator helps me to confirm the trend line breakout and get some pips (10-20 pips) on M15 time frame.
On an up trend, draw supports line by connecting the significant lows of the uptrend. We prepared ourselves to catch the retracement or reversal possibilities. When the price break our trend line, check if the MACD Histogram bar already in RED color. Usually, the bar already turned red before the breakout.
I love hidden divergence which has given me more profits each days. This post will show you a nice hidden divergence setup on USDJPY 17 June 2013. I use M15 time frame to enter my position. I saw USDJPY has made a nice up trend. The idea is to follow this uptrend. How to trade along with the current trend? The key is to spot hidden divergence. Hidden divergence by theory will continue the trend. As usual, I use a trendline breakout to confirm the hidden divergence.
Indicator:
Trendline breakout probably is the easiest trading technique. It can be profitable but if we don't careful, it also can kill our account quickly. There are many false breakout out there. The idea here is to find out the confirmation by adding some other indicators. Here I want to share a simple technique based on Trendline breakout with CCI cross zero line confirmation. This method can be used for both follow the trend or counter the trend. If you use this method for counter trend, you must be careful and make sure divergences already exist. Forget the breakout if there is no divergence.
Indicators:
Stochastic is a good indicator which can help us to trade forex. Personally, I use stochastic to detect any divergence occurrences in M15 (my favorite time frame). On this post, I want to show you how to trade Stochastic divergence with trendline breakout and TDI confirmation. To trade Stochastic divergence, the following rules must be met:
Divergence is actually divergence when it break the trendline. If the price still moving and no breakout or reversal candlestick pattern exist, we cannot call it as divergence. This technique is good for scalping since we only take few pips (10-20 pips each position) Higher timeframe will produce more pips. Here is the SELL example with hidden divergence:
I do love trendline breakout system which combined with several confirmation. For example, divergence with trendline breakout, trendline breakout with NonLag MA confirmation etc. Since NonLag MA is a fast indicator which gives you buy or sell signal faster than most indicator, you will need another technique to confirm it. And when NonLag MA is combined with trendline breakout, it will be a good way to trade Forex. See my example below
Assalamualaikum
The best and safe way to open the trade position is along with the trend. But many traders including me prefer to trade against the trend and hope for a trend reversal or retracement. I don't know why I am doing this. But actually if we stick to a system with tight stop and discipline, I am sure we will success on trading. The keyword is tight stop.
Divergence or hidden divergence must be confirmed with other conditions such as trendline break or candlestick patter. If both are exist then a good trade opportunity is on the way. On this example I will show a trade setup on M5 EURJPY pair. It based on hidden divergence and trendline breakout.
Hi, on my previous trendline breakout trading I already show you how to trade the trendline breakout on a trend reversal. So actually this method will give the best result if the price is really make a trend reversal on the selected time frame. Here, I want to show you how to trade by following the trend using Trendline breakout confirmation and MACD Histogram is used to determine the trend.
A good divergence which followed by trendline breakout trading is a good entry point to get some nice green pips. Here is my trading setup on EURJPY on May 15th 2013. I use M15 timeframe to catch 20 pips target.
On the chart, price creates two significant higher high which are outside the upper Bollinger Bands. Then, compare those two higher high with CCI indicator and it shows a clear divergence here. Actually we can go short confidently because the price failed to break the resistant line (red dot line). But a trendline breakout also gives a good entry confirmation.
When price opened below the trendline, I go short and the lower BB bands is my target. As you can see, the trade above gave me +24 pips to my basket.
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