Trendline Trading Strategy by Myronn vs Tom Demark Trendline

DavidKl

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Hi everyone, I hope you are all doing well.

The reason for this thread is pretty simple, I am following the below strategy called Trendline Trading Strategy, the guy who posted on the below link had a really good results from it.

http://forex-strategies-revealed.com/advanced/trend-line-trading-strategy

However, when it comes to myself I am having a dilemma on how to properly draw trend lines. I have read numerous books on how to draw them, but I think too much information is not good as I am confusing the rules here.

Of course every single person says to draw the trendline from the obvious peaks and troughs which is pretty simple right? But I still got few questions about adjusting the trendlines and and choosing the new peaks and troughs.

Some people are saying that you need to adjust the trendline from the anchor point where the trend started to the latest peak or trough without cutting through any candles on the way up or down. Again very simple concept but is it correct? The reason why I am asking about it is because few days ago I read about the way of drawing trendlines by Tom Demark which advises to actually use the most recent peaks and troughs as the demand line is changing, basically he is reading the charts form right to left. Which way do you guys draw the trendlines? I posted the below chart as an example, which one is correct or both of them are correct?

Which trendline is more significant Trendline 1 or 2?
 

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If possible, I would like to get your opinion on the above as it would help me a lot to put the concrete rules and sticking to one way for drawing trendlines.
 
I don't trade off trend-lines so feel free to regard me as a theorist.

But I don't believe it really matters whether you use a trend-line derived from recent highs and lows or distant - as long as - your highs and lows are consistently identified and each trade is initiated and respects one or the other trend-line only.

So, distant trend-lines mean fewer entry/exit signals, fewer trades, less commission costs, but wider stops, more lumpy financial return, less screen time, less trading experience per year. Recent trend-lines mean the reverse.
 
Hi tomorton, everyone has a different strategy so I am not gonna call you anything :) So basically you are saying that both trendlines are good? however the 2nd one is of more significance?

I will be posting trades starting today together with a screenshots, so if anyone wish to jump in on the thread and share their experience, please do so.
 
Hi tomorton, everyone has a different strategy so I am not gonna call you anything :) So basically you are saying that both trendlines are good? however the 2nd one is of more significance?

I will be posting trades starting today together with a screenshots, so if anyone wish to jump in on the thread and share their experience, please do so.


The recent trend-line is more significant if you've identified a shorter term trade based on a short-term trend. In your EUR/NZD example, it happens that both trends are bearish and ths is complicating your thinking, but don't forget that often a short-term trend will be bearish while the longer term trend is bullish: you decide which you want to trade. Each is good but only within its own parameters.
 
The recent trend-line is more significant if you've identified a shorter term trade based on a short-term trend. In your EUR/NZD example, it happens that both trends are bearish and ths is complicating your thinking, but don't forget that often a short-term trend will be bearish while the longer term trend is bullish: you decide which you want to trade. Each is good but only within its own parameters.

I think you got the point. Later on I will post further examples of the trade that I will be taking today.
 
Hi Tomorton, now the below example is probably an overkill when it comes to trendline on this 1 hour chart of EUR/GBP. What is your opinion on it? Again, do we look at the most recent pullbacks? This is a perfect example of me overthinking and I just want to get it right and have a defined rules on which ones to use. What would you do in your opinion?
 

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Price is already moving up and is well above the two oldest trend-lines, Nos 1 and 2, so entry long using these would be probably late. Price has bounced nicely off 3 and 4, the recent lows touching which also appear to be earlier resistance becoming support, and has moved north enough to confirm momentum, hopefully not too much to reach exhaustion. The shortest-term trend line cuts above the recent lows so isn't strictly valid.

After that, its a question of how long do you feel comfortable being in the trade, and how deep is the stop-loss level for such a trade on such a time-frame. These are individual questions only you can answer.
 
Hi everyone, I hope you are all doing well.

The reason for this thread is pretty simple, I am following the below strategy called Trendline Trading Strategy, the guy who posted on the below link had a really good results from it.

http://forex-strategies-revealed.com/advanced/trend-line-trading-strategy

However, when it comes to myself I am having a dilemma on how to properly draw trend lines. I have read numerous books on how to draw them, but I think too much information is not good as I am confusing the rules here.

Of course every single person says to draw the trendline from the obvious peaks and troughs which is pretty simple right? But I still got few questions about adjusting the trendlines and and choosing the new peaks and troughs.

Some people are saying that you need to adjust the trendline from the anchor point where the trend started to the latest peak or trough without cutting through any candles on the way up or down. Again very simple concept but is it correct? The reason why I am asking about it is because few days ago I read about the way of drawing trendlines by Tom Demark which advises to actually use the most recent peaks and troughs as the demand line is changing, basically he is reading the charts form right to left. Which way do you guys draw the trendlines? I posted the below chart as an example, which one is correct or both of them are correct?

Which trendline is more significant Trendline 1 or 2?

Neither. The purpose of a trendline is, as one would expect, to track the trend. If it isn't doing that, it becomes just another random line drawn for no particular reason and has no particular use. The key to using trendlines profitably is to pay attention to the relationship between price and the line rather than focus on the line itself. In your chart example, for instance, you will note that not only does price make a lower high in June but departs from your trendline. Both these phenomena are worth registering. If you then track price movement, you'll see that the angle of decline becomes more acute, that is that supply is outweighing demand. Why is not particularly important. But you will also learn or have learned from experience that this sort of thing can't continue, that at some point buyers will find what they believe to be value and will belly up to the bar to buy. The most obvious example of this is what I've circled. Given the angle of descent, this also suggests a reversal, or at least a temporary rangeing, after which price will either rally or continue its decline. Properly-drawn trendlines will help you track those movements as well.
 

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Neither. The purpose of a trendline is, as one would expect, to track the trend. If it isn't doing that, it becomes just another random line drawn for no particular reason and has no particular use. The key to using trendlines profitably is to pay attention to the relationship between price and the line rather than focus on the line itself. In your chart example, for instance, you will note that not only does price make a lower high in June but departs from your trendline. Both these phenomena are worth registering. If you then track price movement, you'll see that the angle of decline becomes more acute, that is that supply is outweighing demand. Why is not particularly important. But you will also learn or have learned from experience that this sort of thing can't continue, that at some point buyers will find what they believe to be value and will belly up to the bar to buy. The most obvious example of this is what I've circled. Given the angle of descent, this also suggests a reversal, or at least a temporary rangeing, after which price will either rally or continue its decline. Properly-drawn trendlines will help you track those movements as well.

Thank you for your input. I am at work now so I will get back to you lter on today as I have couple of questions regarding your point of view.
 
Hi. As promised, I am posting any trades that I took today, based on the trendline trading strategy that I am testing. I took all the points from dbphoenix and tomorton said and I am coming back to the old way of drawing trendlines which is basically me taking the most recent peaks and troughs to draw a trendline and use them for trading. I am going to forget about any other trendlines for now, in other words I am going to keep it very simple (like before).

Below is the screenshot of EUR/NZD 1 hour chart. I took the trade on the 3rd trendline bounce, SL is 5 pips above the top of the candle and my TP is in the region of the last swing low. So far so good, If it will reach the target I will move the SL to break even to ride out the trend. I will update you guys in the morning.

By the way if anyone else is using a similar strategy, please share your view or trade ideas. It might be a start of a nice thread.
 

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Actually, I just looked at the 1-hour chart and the trade looked really good in there too....
 

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Ok so the above trade locked in 63 pips. I will be uploading more trade ideas later on today.
 
Ok so there might be another trade on the cards today below is the 1 hour chart of GBP/JPY we have a clear downtrend in place and the price is on its way to test the trendline. I might even take the trade based on the 50% fib retracement and the overbought stochastic if I am going to get a bearish reversal formation.
 

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ok. so I will be preparing to enter the trade on the above GBP/JPY 1 hour chart. The price is now testing the 4 hour trendline. So I am switching to 1 hour chart to look for entry signal. Let's see how this is going to work out.
 

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Last night I got into 2 trades one of them was GBP/JPY on the hourly chart the GBP/CAD on the hourly as well. So far so good. I think clear chart and simple trendline strategy is working. It's a weird thing but it got so much easier for me to identify the right swing lows and high when you talk to yourself out loud :) :) :) anyway 2 trades I posted them below. GBP/JPY has a nice ration to it 3.56:1 the 2nd one is a little bit less 1.56 : 1, but I will move the stop loss later on to break even of if it will create a new lower high I will move my stop loss 5 pips above it and ride out the move. I will update you later on how I got on.
 

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Just checked some charts and I missed out on the below trade GBP/USD. I shouldn't go to bed early last night :) but hey it happens.
 

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Hi everyone. Just an update on the last trade GBP/CAD TP hit just now. Closed the trade as it's getting close to a hourly support so I'd rather walk away with the profit.

The GBP/JPY trade is doing fine so far. I will update it later on.
 

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