(ALMOST) Perfect Swing Trading using Trendlines

Trading Systems Free Forex Trading Systems
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I know the GPB\NZD isn’t talked about much, mostly because of the high spread, and the fact not every broker has this pair to trade, but after looking at both daily and 4 hour charts, I can’t help but notice how ripe this pair is for swing trading using trendline breakouts. Look at the daily and notice how while recently it has been ranging, before that, it had great swings, with almost too perfect angles, with over 1000, sometimes 2000 pips per swing…very exploitable using trendlinebreaks.
And for the more recent ranging, if you go to a 4 hour chart, you see it still has trends that go great pip distances, 200-400 pips, and almost never breach their trendline, until it’s time for true reversal.
Indeed, when a trend starts, as long as the chart is viewed 4 hour or higher TF, it goes at the same angle everytime, no variance, like all the other pairs…just pull a chart for yourself and see.


I think Demark Trendline indicators would be useful, as long as the settings put the trendline where it should be, otherwise you’ll have to hand draw your own…not too hard…anybody can do and trade this…very newbie friendly.

Pull a 4 hour chart, and draw a trendline over the last downtrend, or under the last uptrend swing…when the price closes past the other side of the trendline, it’s time to open a trade in that breakout direction, and only close it when after it has trended back enough to allow you to draw another trend line, and it breaks that, or if it hits an SL, which I would recommend something like 50-100 pips for this pair, depending on the TF your using. If you practice drawing trendlines on a 4 hour chart of GPB\NZD, you’ll see what appropriate SL to put…just pretend you’re trading the trendlines you drew and then when the price breaks the trendline to reverse, see how far from there the price went negative, if you had opened a position, then use an SL a little more than the greatest distance you find that went, over a reasonable period of trendlines…
If you need help visualizing trendline breakouts, visit Blizzard’s thread, Simple and almost Naked breakout system.

You can get 1:3 to 1:5 risk reward ratios on this strategy rather easily.

This can be automated using SMA crossover of 8, and 17 simple moving averages, on the close on a 4 hour chart…This may result in some losses when this ranges, but ranges are rare

Let’s get our heads together and discuss the viability of this idea…:smiley:

1 Like
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Nice Trend System - see image attached

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Wow, just had a brief look and what a great pair!

Going to backtest over the weekend.

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that looks nice, but I dare you to take a naked 4 hour chart and start drawing trendlines, then go back a few and pretend you traded them, and then compare the results to as if you traded your chart you posted above…:smiley:

How about buying at 1.9100, now that the latest trendline is broken?..putting the SL at 100 pips south.

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Now the buy at 1.9100 is just below 1.9300, 200 pips up in a little more than 1 day…SL to BE, now…trend is going more steeply up.

Using a 1 hour chart, zoomed a good ways out, can be used, but one must be very careful drawing the trendlines…they can be modified as time goes on. Remember, this is a slower method of trading, so let the price move a bit before opening\closing trades to confirm reversals…also pay attention to the fact that the base currency your account in may have a different value per pip than the majors, like eur\usd for instance. It will be whatever the GBP is trading at, instead of the US dollar, so about 1.61 per pip instead of $1 per pip.

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I managed to get where I could upload this older pic to give you a visual on the basic idea…the dotted red trendlines are shown drawn along a given trend, and when broken, the trade is entered and only closed when the trend it creates is broken, so according to the pic, we should have closed our buy, and just entered our sell…any questions?

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I have never understood why so many people say that traders - and in particular new traders - should stick to the Majors only, or even to just one Pair. The cross pairs can trend beautifully, and can be less sensitive to news, so if anything are a more stable, reliable option than, say, Cable (which I find far spikier, although I do trade it).

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The buy at 1.9100 is at 1.9430, after reaching a peak of 1.9495…trendline is still being respected. That was 395 pips!
The neat thing about trendlines is you can tell when the price is going to break or respect it when the candle is about to close just because of the passage of time.

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This could be time to close the buy, and open a sell order.

A downward trendline using the tops of the daily chart has been touched, and the price action is now breaking the lower trendline which angles upwards. I have a stop at 1.9470, which if hit, closes the trade for 370 cool pips, and stop order to enter the sell, as this will mean the trendline will have been broken. The new trade, if opened will have 80 pip SL at 1.9520, above the trendline. If the original order, still open, stays above the trendline, then I expect resistance at 1.9600.
This pair loves to bounce off round numbers, 100 pip numbers, that is…:smiley:

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Price was continuing to rise until early this morning, blasting through resistance, peaking at 1.97390, 639 pips up!
I personally closed the trade at 1.9700 level for 600 pip profit for the week because it was well above the trendline, the holidays are here, and I want to stay out of the market until the new year starts.

For traders who are psychologically adept, when the price goes far above the trendline like this, you can take your profit and wait for the price to meet the trendline again for a re-entry, which allows some extra profit in the pocket, as long as the price moves back down to the trendline, instead of waiting for it to rise to meet it.

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I am not trading until the beginning of the new year, since the holidays and fiscal cliff have pairs in a range, which has affected our pair here, GBPNZD.
Look at this chart, how, despite the recent ranging, how well the andrews pitchfork works as trendline indicator.


When the bottom trendline of the pitchfork is broken, then it’s time to open a trade south (sell).

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Lower trendline is now broken, so I would be selling now…:smiley:

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Great thread thanks

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Spread is the big problem

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You think less than 10 pips is a problem with 700+ pip moves?

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I have had a lot of luck with this and I wanted to thank you for posting the information!

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Just found this thread. Drew some trend lines this morning. I barely got done (0430 Mountain) when the PA crossed over the line I had just drawn. Mentally made a trade and am watching it follow the pattern you described; PHENOMENOL! Still trying to digest where to put Entry/SL/TP, so I didn’t trade. Will now keep this on my radar for the reversal, be ready for position parameters, and then pull the trigger.

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Thanks pipcompounder!

My first live trade this pair. Already 120+ pips now, my 10%, should close at 1.91000 :57:

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Very good. I am personally waiting until this downtrendline breaks to the upside to enter. That ranging at the top was part of the holidays and US fiscal cliff uncertainty, and now the pair seems to be trending as usual. Just slow and easy makes the pips.

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Thanks pip,

Actually I closed previous trade at 110+.
I’ve just re-entered after price break 1.91000 and support level right below.
+20 pips now.
I think next target is 1.90000

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