Trading trendlines, am i just not doing it right?

I didnt know if this was the right place to post but if not please move

I have been trading trendlines for quite a while now yet i still cant seem to get consistent profit out of doing so. I have read all the tricks in the book yet i still seem to fail when i use them.

I have tried trading with the trend using moving averages on the higher time frames and i have always tried trading the bounce using over sold and over bought signals on stochastic but still no luck. Im not so much a breakout trader but rather a bounce trader, i prefer to trade the bounce but i just cant get into it at all.

How can you make trendline trading profitable?

Try more analysis, multi time frame analysis and remove the indicators. Also, when trading the bias from a trendline you dont necessarily have to wait for the market to bounce off the line. Try trading in the buy and sell zones of the particular trendline rather than waiting on bounces.

I am a trend line trader and doing it without any loss. This month, it is more favorable to me. My method of trading trend lines profitably is already published in baby pips forum with live charts. You may see the thread http://forums.babypips.com/trade-journals/47465-bijoys-trading-set-ups.html which may be helpful to you.

Post a chart with your lines on it.

It’s hard to know what you might be doing wrong, if we don’t know what your doing at all.

Hi, Cadarkitek,

Just a clarification. When you said “you don’t necessarily have to wait for the market to bounce off the line,” does that mean it’s ok to enter a trade without a candlestick trigger? Or it’s better to always wait for a candlestick trigger?

Thank you in advance.

Yes you dont have to wait for a reversal candle to enter. You can use fibs, chart patterns, S&R levels etc. once youve established a bias.

Would like to see a chart and the trend lines you are drawing. Post one if you can. You may be placing the trend lines incorrectly. Remember trading trend lines is heard mentality, if your lines are the same as the heard you should be profitable most of the time.

You didn’t deliver much in the way of specifics so it is hard to say exactly what you may be doing wrong, but I will hazard a guess or two anyway.

First, most trendlines are drawn completely subjectively. You may not be drawing them the same way every time which means you are making trading decisions based on very different criteria each time you trade. You may think you are, but are you really? How do you know? The only objective way I know of is to use Demark Trendlines. They essentially use the two most recent fractals as the connection points. No room for error; the trendlines will be drawn the same way each and every time. Tom Demark, the originator of the method also has a rather comprehensive method for trading trendlines, including what he calls qualifiers, as part of a more comprehensive trading strategy. Most of his descriptions regarding the drawing and trading of trendlines are available on YouTube and various places on the web (Google is your friend!). I have no idea if his trendline trading strategy works or not but his method of drawing trendlines is 100% consistent.

You prefer to trade the bounce? Sorry to say it, but that is complete nonsense. The market doesn’t care what you prefer or do not prefer. You must adapt to the market conditions you are trading, not the other way around. If the market appears as though it will bounce off of your trendline and your analysis says it is a good trade, then trade the bounce. If price breaks through your trendline, why do you care? Be prepared to trade the break should it occur and your initial analysis agrees. Price will break tendlines much more often than it respects them.

You mention you use moving averages. Moving averages are, as the name implies, an average of past prices and that is it. Moving averages allow you to easily see where current price is in relation to the past. They may certainly give you a market sentiment, bull or bear but beyond that, they really don’t tell you much. A reliance on moving averages, especially on multiple timeframes, is mixing apples and oranges. If you are trading a 5 or 15 minute timeframe, for instance, why do you care where price is in relation to the daily?

You also mentioned you are using stochastics for the infamous overbought and oversold levels. Good luck with that. If there were any consistent predictive powers in overbought stochastic levels everyone would know exactly when to sell and vice versa for the oversold levels, everyone would know exactly when to buy. As you have discovered, it doesn’t work out very well in the long run.

Unfortunately, you have chosen the easy path to ruin, letting indicators and conventional wisdom dictate your decisions, instead of the much more difficult path to success, learning the laws of supply and demand. Trendlines can be a great aid in making good trading decisions. They can be a huge hindrance if you are expecting the market to behave a certain way just because you have drawn a couple of lines on your chart.

To use trendlines more effectively, use them only as a guide as to where you might expect to see a certain reaction in price. If you see that particular reaction, go forth and conquer. If not, your initial assumptions were incorrect. Knowing when not to trade is just as important as knowing when to trade.