Trend Trading

[spxpro]

Hi all , i have not posted much on this forum, i find myself getting bored while waiting for setups so i thought i would start this thread about trend trading , the charts i will be posting will not contain the indicators i use .

I hope that the info will give some knowldege to those who may be struggling to understand how the markets work.

As the title suggests the method is trend following , i will be using 3 timeframes and i will give an explanation of how to use each one as we go along.


spxpro

 

[spxpro]

Primary Trend

PRIMARY TREND


Our first chart will look at the primary trend , i will be looking for new low , a new high and then a break of the prior new high with a close above the prior high


But first a little about primary trends, all timeframes contain a primary trend , when you look at a chart you will notice the price moves either up down or sideways , all these movements form to create the primary swings, the indicators i use are able to define each of these primary swings with very good accuracy.


So the PRIMARY TREND IS THE MOST IMPORTANT ON ALL TIMEFRAMES and the first timeframe we will use will be the 15 minute as trends begin from the low timeframes and build up into the higher timeframe.


One important thing to remember is that A 15 MINUTE PRIMARY TREND WILL SHOW AS A 60 MINUTE MINOR , we can use that knowledge to great effect but more about this later.

 

[spxpro]

Minor Trend

Lets take a look at the minor trend ,

remember every timeframe shows a primary trend so in the example i have shown we can see the primary in RED now take a look at the WHITE and you will see the minor trend , again the minor trend here is simply the primary on a timeframe lower than the 15 min , the indicators i use show both the minor and primary on the same chart at the same time.


PLEASE NOTE : THE STRAIGHT LINES ON THE CHART ARE NOT ZIGZAG INDICATORS INFACT THEY ARE JUST LINEs I HAVE DRAWN USING THE LINE STUDIES IN METATRADER 4

 

[spxpro]

Trading Method

Just to recap ,

THE PRICE ACTION ON EVERYTIME FRAME CAN BE DEFINED BY A PRIMARY SWING OR TREND

ON EVERYTIME FRAME WE CAN SEE THE PRIMARY AND THE MINOR


THERE IS A CHANGING RELATIONSHIP BETWEEN TIMEFRAMES AND THE PRIMARY SWING OR TREND

15 MIN PRIMARY= 60 MINOR
60 MIN PRIMARY =240 MINOR

AND WE CAN ALSO REVERSE THIS RELATIONSHIP

60 MINUTE MINOR= 15 MINUTE PRIMARY
240 MINUTE MINOR= 60 MINUTE PRIMARY


THIS RELATIONSHIP IS EXTREMELY IMPORTANT AND I WILL SHOW HOW TO USE TO GOOD EFFECT


TRADING METHOD

I AM GOING TO TRADE MOSTLY FROM THE 15 MIN AND USE THE 60 MIN AND 240 TO FIND OUT THE POSITION OF THE MARKET IN RELATION TO THESE.

 

[spxpro]

The Trade Set -ups

NEW TREND BREAK OR 123

With this type of trade i would start from a new primary high , here i am looking for a new primary trend from a high then a low ,lower high and a lower low ,,, then using the minor retracement to enter the trade....


As u can see in the picture the point at which we can confirm we have a primary 15 minute trend is the close below the original low making a high ,low, lower high, lower low ,then its simply a matter of waiting for the retracement on the minor trend ,,,,

Before we enter the trade we need to take a look at the higher timeframe 60 minute chart to see if we are trading with or against it ,,,,,,, you can see from the second chart that we were previously in a primary uptrend ,,,, see how the 15 min primary turns into the 60 minute minor , so its clear here we are trading a minor retracement against the 60 min primary uptrend.....


UTP-- UNIQUE TRADING POINT


Being able to identify primary and minor swings on the same timeframe is a serious advantage in trading


Please note the exact entry point technique will not be posted here at this point ...

 

[spxpro]

More Set Ups

Later ,,, i will show you how to trade TREND REVERSALS AND TREND CONTINUATIONS AND THE LAST TYPE OF TRADE IS A TREND REVERSAL/ NEW TREND BREAK HAPPENING SIMULTANEOUSLY

 

[spxpro]

New Trend Break 123

Here is another example of a new trend break ,,

as you can see the primary trend was confirmed on the break and close below of the first low ,making a high ,low ,lower high and a lower low ,then using the minor retracement we are able to enter short into the primary trend.

 

[spxpro]

Trend Reversal Point

At this point i think it would be a good idea to discuss the difference between a trend reversal and a new trend break....


A new trend break is simply as the words "a new trend" imply ,,,, a new trend and it does not mean that the prior trend has been reversed ,,,, simply because a new trend on one timeframe can be a correction on the higher timeframe and even corrections have a trend withing their internal structure or subdivisions...


So what is the difference..??


To confirm a trend reversal we must see a new primary trend,,,,,,,,, trend past the prior primary higher low for short reversal and past the prior primary lower high to confirm a long reversal ....

 

[spxpro]

Trend Reversals

Lets take a look at trend reversals.


PRIMARY UPTREND REVERSAL TO PRIMARY DOWNTREND

A primary uptrend is reversed when a new primary downtrend forms and this new primary downtrend breaks the last higher low from the prior primary uptrend and closes below... see chart 1

PRIMARY DOWNTREND REVERSAL TO PRIMARY UPTREND

A primary downtrend is reversed when a new primary uptrend forms and this new primary uptrend breaks and closes above the last lower high from the previous primary downtrend...see chart 2

 

[spxpro]

Coming next

Coming Next

How To Take A Safe Entry Into The Reversal

 

[spxpro]

Usdchf New Trend Break Today

Here is a great trade from today ,,, see the chart

New primary trend break down using the minor trend to enter and clear support .


PLEASE REMEMBER THE LINES ON THE CHART ARE NOT ZIGZAG SO DO NOT ATTEMPT THE SAME USING ZIGZAG,, I USE A UNIQUE METHOD HERE WHICH DEFINES THE PRIMARY AND MINOR SWINGS .

 

[Trader Rich]

Thanks for the informative post. One of my day trading rules is trading with the trend. It takes lot of patience though. Keep up the good work.