Multi-Time Frame Trend Trading

Graviton, below is a chart attached on a “so called” trend line break fake out i had.

Clearly we have 2 trendlines here, is the first one on the left valid? Or should we actually draw the trendline from the earlier point, meaning the trendline on the right?

I took the trendline break on the left one, but i got stopped out. I see it happening quite often, but then again that was during the news.

So my qns would be, is my first trendline drawn on the left valid?
Upon breaking it went upwards again forming a new low. Thus a 2nd trendline could now be drawn.

So how do i go about such situations?

And also, you mention upon a close of candle below the retracement line you will find an entry in the 15mins.

When you look down into the 15mins TF, it most prob would be in a sausage or bubble, so you enter per break out rules? Or do you wait for a slight retracement and get an entry?

These are some of the problems i faced now. Sometimes the trendline gets broken, however i wait for a retracement move, sometimes it never comes and i missed almost the entire move.

And i recalled ytd you took long AJ on the 1 hr cbl. May i know the reason for it? I couldn’t think of any, besides that the long wick provides a very good support level since way back. :confused:

Below is the chart of GJ that nb mentioned, clear retracement we’re having right now. So upon a 4hr candle close we would find an entry.

So grav, the time when you enter those retracement trendlines break would be when there is no news coming out, thus ensuring the break is more valid. Rather than a simple fake out that forms really long wicks. (Hate to see those!)

Clear examples would be the 4HR UJ charts now.

Okay some observations i had, the steeper the trendline, like the 1 oclock, higher chance it will break and not fall but rather range for a while. Before finally breaking or bounce back.

I think you or I one mistyped. I only had one aj trade and that was entered with Nathan on a 1H CBL.

No I don’t want to enter right before a news announcment. Yes, many say steep trendlines have short lifespans. It may be true, though it doesn’t enter into my trading.

Ok thanks for sharing grav! I think with more practise i’ll get the hang of it. Seriously, it looks easy but when you actually try it, there’s so many tiny details to take into consideration!

No wonder advertising EA and bots are so easy, cus everything looks easy!

And also, as we can see the retracement bouncing off the trendline on the 4hr beautifully, i realised looking down into lower TF, like 30mins we could actually get good cbl entries to go long.

Do you?

The retracement trendline on uj and ej seems to break and not break again!

Hello Graviton,

Please let me make several points and ask a question.

1> Thank you so much for all you are doing.

2> I just caught up with Tymens thread but wanted to finish it before joining yours, quite absorbing that was! This already appears to me to be the same. I mean as for absorbing! I seems you are more Macro and he more Micro; the perfect compliment.

3> I’ll not much disturb the current discussion and will catch up soon.

4> I will learn how to keep a proper journal; I currently have date, win/loss & balance on a spreadsheet.

Q> Your post details a lot of work to learn that lie. Now you know the truth. Why ‘toss it’? Surely the journal would retain that truth.

I suppose in my mind I have answered that Q, at least for my journal. But, I will learn more about journals.

At least I got to say Hi and let you know I am here.

Needy

I would say on the contrary :smiley:

Welcome Needypips, sign up on our chat… Graviton spends a lot of time there teaching and live trading with us!

bolldna.com (can’t post links…)

Thanks Grav. I just spent 2 hours looking at a few sites gleaming fundamental info for next week. I thought I would have a break & catch up with reading your & Tymen’s threads. Now I can add this site to the others & check out where things will go next week.:wink: It is also interesting to see differing opinions on the same information.:eek:

I also checked the trades you mentioned above. With hindsight & your clear explanation of what to look for I can’t believe I could miss something so obvious!! I am printing those 2 posts with accompanying charts and putting them beside my computer so I can study them & look for similar layouts in the current charts.

Your an inspiration to many would-be traders. THANKS! :smiley:

execellent advise as always graviton. i have been told to look at aussie/usd this monday even though i will not be around because it is bank holiday monday. looking forward to trading on tuesday!!!

Thanks Aserat!

Hmmm, on the contrary? Not sure I understand that, but I have much yet to learn.

Yes, I signed up early last week and Thu/Fri spent some decent time in there, just watching and learning. Look forward to much more :slight_smile:

Yes, I use CBL’s as direct price action confirmation of my entry. That could be an entry that bounces off a well established trendline, or one that penetrated the trendline. When price approaches a well established trendline on the higher TF, like the 4H, we don’t have to guess if it will bounce off or penetrate. We just wait until price action tells us which way It wants to go. If it penetrates the trendline or breaks through the trendline, you’ll often get a confirming CBL on the higher timeframe that produces a very good entry with the confluence of events of a valid cbl and trendline break. If price bounces off the trendline and continues the trend, you will often get a confirming cbl in the direction of the main trend on a lower TF like the 1H or 30M. I don’t take entries off lower than the 30M as they are unreliable for me. I just use those lower TF’s to help time entries to get in at the right time with momentum traveling in my direction.

There is a perfect example on UJ right now. A up trendline is well established from the Aug 24th low of 83.57 through the low of today on Aug 30. This trend line drawn through the extremes of the wicks and has at least three touches and price is falling and touching it again right now. If it’s penetrated, we will have a very good down entry with a tight stop just above it. Take a look at it on the H4. This is the way we see these things BEFORE they happen instead of in hindsight. All we have to do is wait now and let price tell us what it wants to do. If price bounces off the trendline and resumes it’s upward move, you have about 100 pips up to the next main resistance, a down trendline that goes back to June 2007. If price penetrates the up trendline, we have another leg down in the UJ and can get in with a cheap stop. So, we wait and watch. Plot these trendlines up if you can see them and post it here and we can discuss more.

Note that I am not using these trendlines to capture very small 30 pip moves. Those moves can easily be reversed by minor news. I’m looking for 100+ moves where a small 20 or 30 pip news event won’t hurt my profit potential significantly. But it’s always good trading to avoid the risk of a 30 pip move against you and all that takes is patience. For instance, today, Monday Aug 30, there is no US news scheduled after 8:30 AM EST and the Asian session is closed, so news risk in that UJ pair is minimal. If you are already in a trade though and news comes out against you, if you are actively trading at that point, you can often quickly take your profit and wait for the retracement against the news event spike and get another really good entry at a better price back into your same trade, if the basis of that trade is still valid and you would still want to re-enter.

If you are actively trading, this is a form of trading news that actually decreases your risk, rather than increases it. If you are in a good profitable trade and news moves price further in your favor, you say, “Thanks for the gift!”, and stay with your good trade, even though you know there will probably be a retracement against the news spike coming later. You just ride that retracement out if your trade basis is still sound. You DON’T let that news spike and the following retracement whipsaw you out of a good trade.

But if the news spike moves price against you, you exit immediately taking your profit out of risk and harm’s way. Then as soon as the the retracement against the news spike comes, as it usually will, if and only if your trade basis is still sound, you re-enter your trade at a better price than where you sold, using the retracement against the news spike as an entry point back into the trade you wanted to stay with. Of course, if the news is really major, the retracement may take a while to come, or it could rarely reverse the major long term trend. But that is rare, since there are many many news spikes in any major long term trend and only one time will the major long term trend actually reverse over the longer term.

Once again, the idea is to trade news to reduce risk to your capital and profits, not increase it. This is a different way of trading news from what most newbie traders would think of. They make the mistake of trying to jump in on the spike and get stopped out with the retracement as smarter traders like you and me sell to them to protect our profits as the spike against us occurs and then use the retracement against the news spike as a buying opportunity to re-enter our good trade at a better price. Essentially they are buying from us as we are taking our profit from a longer term trade, and they are selling to us as the spike retraces and gives us a good entry at a better price than we sold at. Think it over and see if it makes sense to you. If it does, you will rarely make the mistake again of buying into a news spike and getting whipsawed out of it at a loss, or trying to ride out a news spike against your good trade and watching your profits whither away as the spike grows.

Welcome aboard! I was trying to make a point, that you must abandon a possible future that the price doesn’t support. Hanging onto a belief that the price action doesn’t support is a sure way to losses. Yes, I have it written in my journal, but I’ll come back latter and make notes as to which possibility turned out to be the correct picture. That is a very valuable learning experience over time. You’ll see this happen over and over. There will be a very good reason that prices should go up and a very good reason they should go down. People on both sides make markets. But only one is right and price action tells you which is right and which is wrong. The market is always 100% right. We only understand why a little over 50% of the time at best. But, with more study and practice, we slowly get better at our understanding, and that can make a nice profit most of the time. We will never approach that 100% figure, but we don’t have to as long as we cut our losses short and let our profits ride until it’s smart to take them. Being right anything over 50% of the time can make you a very nice living if you employ very good money management techniques. You need to be an expert in money management to survive and excel in this business long term. I believe that’s something every successful trader will agree on no matter their entry and exit methods.

So welcome again and Happy Trading!

Thanks for the kind words and welcome aboard. I always thought it was impossible to write all this stuff down. I thought it was just stuff you have to learn the hard way over decades. But Tymen inspired me to at least try. It’s been difficult, as often the very principals I trade by are in a careful balance or even in outright conflict.

For instance, a core principal is cut your losses short, but another is have the courage of your convictions. Those seem to be in direct conflict, but really must be balanced out for good trading. Even always considering that, when you are convinced that buying is a great idea, there is someone on the other side of the trade that is selling to you and he is just as convinced that selling is a great idea.

So keep an open mind and consider the opposite case, what is he thinking? Unless you are correct 100% of the time, there are many situations where he will be right and you will be wrong. Search out the reasons he is on the opposite side of the trade. Investigate and research them from the other side of the trade as he has. Sometimes, often really, he’ll convince you of his case and you’ll correctly reverse your position. Sometimes it will just confuse you. That’s OK, confusion and indecision usually precede a well thought out trade. That’s the reason for the research. Your certainty that you are right and the other guy selling to you must be a fool, without even understanding his point of view, can be a great danger to your trading. Usually, the guy on the other side of your trades is a professional trader with more than 10 years experience. He may be wrong some percent of the time, but he’s no fool. That small percent of the time he is wrong, are the best trades for you.

Whew! See how hard it is to write down just one simple little concept? It’s not really impossible as I once thought, it’s just very difficult and takes lots of typing and explaining and re-explaining. I do believe we are making progress though. Like trading, it just takes lots of patience and perseverance. Happy trading!

Graviton, I am also trying to get the hang of the MTTF trendline bounce/breaks. I have been experimenting since last week drawing a TL on the Daily, then dropping down to the 4H and adjusting the same line, then doing the same thing on the hourly.

I think EJ is already doing a trendline break as of today and was looking to get in on a retracement. Here are my charts, what do you think?

I’m thinking EJ looks to test the recent daily low support at 105.4. All three examples below are the same chart in different TF views to show where I ‘sharpened’ the lines.

The heavy dotted line is the recent daily high/low, the smaller dotted lines are 4H SR lines I plotted. The label “Short off TL break” is just a note I make to myself on these higher TFs charts as to what I ought be looking for.

I was actually looking to catch a retracement later today or tomorrow to get a piece of this move, which would be about 180 pips from this point to the support.

Thoughts?

Hi Graviton, I am also attaching H4 chart of USD/JPY .
I have drew two trend lines( blue and red). Which one line is correct? Which one are we waiting to be broken? I am enter short when blue trend line was broken, thus I’ve got cheaper SL
Yellow horizontal line is my entry level. Didnt you tell that we enter short if PA penetrates and all candle body is clear. If really I am confused now what is right way to enter?? And what would be the level to take profit for short entry?
thanks… :slight_smile:

Hello Graviton,

Have not posted in a while so thought I would check in. I have printed your PDF and have it in a notebook and take it with me while I’m traveling. It is my night reading material. Every weekend thats possible I go through and do pair analysis. Sometimes I get 5-6 pairs but usually I just have time for 2-3.

Typically I have leaned on FXDD’S commentary to guide me through but this weekend I thought I’d go it alone. Below is a summary of probably 3 hours of work. I swear I feel like a newspaper editior. These conclusions were 5 paragraphs long at one time:eek:(I know, I know, it’ll get easier). As you have said many times one wants to have some sort of a bias for the week and that is what I am aiming for.

So I was pleased to see today I hit all 3 on the button. What’s interesting is a lot of my bias was formed not just from S/R & MA’s but from seeing a pattern of 3 up or down days in a row and thinking (from reading trading books) that there would be a good chance of a pullback on the 4th day. Do you thinks this is a valid? What I did on each pair was go back several months and see how price acted after such setups and it is pretty conisitant as long as it was not on a BB walk. As longs as it was between the BB’s on the daily it seemed like a pretty good chance of a retracement day.

Anyhoo, I made 100 pips today just from putting in buy/stop orders with tight stops as I was not able to be at the computer at all today. If I could have traded the 5 lots I’d have had a really fun day:)

Again, I thank you for your mentoring and detailed expalanations of your trading techniques. It enabled me to bypass all the bots, EA’s , strategies etc and fast forward to real trading.

USD/CAD 8-27-10
Conclusion: Monthly bounced off 23 FIB for the 3rd time at 1.066. More room down than up in the monthly channel. Weekly close with a bearish evening star? candle. Traded out of resistance level trend line most of the week but has fallen back almost below it. 3 up candles in a row points to a down week. Daily is well past a valid short CBL but there have been 3 downs in a row so a pullback is possible on Monday. PA closed below the 23 fib level so need to watch the S/R interaction with it. All indications are short on this pair for the week except possibly on Monday where there could be a pull back. Pay attention to the fib levels on the Daily and 4H charts. Remember oil up Loonie down. US news bad Loonie down.

AUD/USD 8-27-10
Conclusion: Long bias on the monthly. Back in an uptrend channel on the weekly. Daily has had 3 bull candles in a row and 4H is at exteme BB so I would look for a Monday pullback but forward momentum after that.

8-27-10 EUR/USD
Conclusion: Got a bullish hanging man close on the weekly which signals an up week. PA right on the mid BB. Daily has 3 candles up in a row. Tough to have 4. Watch for break of uptrend channel. Got 3 sets of fibos with ranges between 1.2600 and 1.2776. Tough call on this one but I would lean on a lower Monday and and uptrend the rest of the week.

Here is my 1H U/J chart. Wished I’d been around to see the break of that trendline:(

I thought long trends were drawn from the bottom and short trends drawn from the top?

Yes Hordane, This actually was the top of a channel and I had removed the bottom portion. So what I should have said is “wished I’d been there when it dropped back into the channel”.

Hey grav, thanks for sharing once again. Deeply appreciated by us all indefintely.

I manage to catch the short on UJ and with your multi lot strat, im up around 200 now.

I have couple qns though, first you mentioned that news usually occurs which will spike the pairs depending how heavy the news is. So just to re-iterate what you said earlier, the news is usually unlikely to cause a major change in the long term trend.

It USUALLY do 2 things only,

  1. either push the price further into the long term trend favour
  2. retrace a little and eventually go back into the long trend favour

3rd case would be, a new trend is born. Am i right?

And also, having usuing multi lots, am i right to say that for example i put on 1% on the inital lot, my subsequent lots will be small than my 1% say maybe 0.5%? So if it does retrace to my stops, the most i get out at BE.

So i can expect that to happen quite a number of times, and there will come a time when i get one really big win to cover up all my BEs and small losses?

Lastly, do you apply the same concept to weekly performance. For example i use 1% mm, if im up 2% for the week i will never let it become a loss?

The most i will either BE for the week or have a small gain. So im only playing with casino’s money the moment im positive for the week? This way, i have little losing weeks.

Thanks once again! :smiley: