A guide to trend trading in its simplest form. - futures io
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A guide to trend trading in its simplest form.


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A guide to trend trading in its simplest form.

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  #1 (permalink)
 jinhar 
mumbai maharashtra/india
 
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hello all,

The purpose of this thread is to help traders navigate through different forms of trading .. There is trend trading, range trading, counter trend trading and so on .. for a trader having difficulty making daily bread and butter i would suggest they start with trend trading and this thread will help you with it.. trend trading is simple as it comes in trading if you dont make it complicated it will help you to be profitable most of the time with that i dont mean each trade but i mean over a period of time say for scalpers weekly for day trader on monthly basis and so on... This thread will cover from different trend setups which i use to all other details which i think will help you out overall in the trading process .. again i am no expert this is just some of my exp in trading for last 3 years ... if it helps you excellent if not i will thank you for giving it a read.

Requirements for trend trading...

Well you will need to choose the time frames you want to trade on .. you will require to select 2 time frames one will be smaller time frame for your entries another will be you higher time frame for analyzing the flow of the markets and trend.

Then you will need to select a moving average it can be anything you like 21,34,55,60,89,100 etc it should be same on both the charts.

This is the basic stuff you require then u can add other indicators if it helps you for this thread i will just use this.

Price action plays a great part in trend trading that you will soon discover as this thread continues.

Instruments you can trade...

Well you can trade any instruments you like but you should know that instrument well by that i mean you should know when its move more when its gonna stay dead like lunch hours and when are news related to it scheduled to come out.

Daily goals:

For new traders i would suggest keep your goals simple [10-20 ticks per day with as few trades as possible is nice place to start] trading is not something you want to rush things in . in trading i would suggest you find your base 1st then start expanding it. By finding base i mean take it slow when you are new or struggling and once you know what you are looking for are confident then you can build up from there on...

Daily loss limit.

i have talked with many traders some say its most imp to keep a daily loss limit some disagree with it .. I do agree in keeping a daily loss limit and for starting out i think best is to keep it at 1:1 so if your daily goal is 20-30 ticks keep your loss limit of the day to 20-30 ticks. as i said earlier trading is not something you can rush in so there is no harm calling it quits when you are not in sync with the market just call it a day and come back later on next day .. no point in trading more and more when markets are not in sync with you and giving away $$$ from your account.

I will post some examples and charts later on and cover different setups with trend trading .. Hope it helps .. again this is just one of the ways to trade i aint a expert but i get my daily targets most of the day and purpose of this thread is help traders do same..

Best Regards
Jinhar

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  #3 (permalink)
 jinhar 
mumbai maharashtra/india
 
Experience: Beginner
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Trading: Crue/Tf
 
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The primary setups for trend trading are 2 1st one is the trend reversal on your higher time frame for the purpose of simplifying all setups name we will call it 'B' setup..

A 'B' setup occurs when u get a new trend on your higher time frame by that i mean if market is trending down you will get a close above the ma and if the market is trending up you will get a close below the ma. Once this happens the price action on your smaller time frame will be in sync with the new trend. lets simplify this with few screen shots..

For the purpose of examples i am using Euro usd with 5r and 15r. 5r will be your entry time frame and 15r will be your higher time frame for analyzing and trend direction. i am using a 55 ema for the examples.

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  #4 (permalink)
 jinhar 
mumbai maharashtra/india
 
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The positives of the 'B' setup is that as its a trend reversal it will get you in as soon as the trend shifts and if its a strong trend reversal it will give you a great entry at the start of the trend.

But it has its negative points they are that as its a a break out trade on your 5r your stops will be a lil higher and also if trend is weak then there will be a retracement coming and another thing is that there will be false trend reversal.

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  #5 (permalink)
 jinhar 
mumbai maharashtra/india
 
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Well the solution when you get a false b is simple you will get another trend reversal and a another b setup again remember for a b setup to work you need the pa on your smaller time frame to be in sync so to get 2 false b trades is very rare if the market is moving normally by normally i mean London open or pre us or us open.

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  #6 (permalink)
Slack
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Keep them coming my friend.

Looking forward to (hopefully) learning about stop placement, trade mgmt and the elusive exit plan.

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  #7 (permalink)
 jinhar 
mumbai maharashtra/india
 
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Slack View Post
Keep them coming my friend.

Looking forward to (hopefully) learning about stop placement, trade mgmt and the elusive exit plan.

Will cover everything this is just one setup there are another 3 setups which i need to cover once i do that then will cover all other stuff will do all slow and steady ..

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 jinhar 
mumbai maharashtra/india
 
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Now lets move forward to another setup which will be the trade u need to look at very very closely as this is the most efficient setup in trend trading the pullback setup or the 'A' Setup..

An 'A' Setup will form only after confirmation of the B setup so after you get a confirmed b setup you can look for pullback to the smaller time frame ma for an A setup. Again for an 'A' setup to work its must to have the pa on ur smaller time frame to be in sync with the trend.

Positives of this setup.

Unlike B setup this only happens after confirmation of the trend. Entries are at the pullbacks so stops are small compared to the B setup.

Negatives of A setup

You will miss the initial run most of the time. Pa always needs to be in sync with the trend.

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 jinhar 
mumbai maharashtra/india
 
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On a strong trend day when you get a pullback on your higher time frame there will be periods when the price action on the smaller time frame will shift if thats the case the only way to get in a trade as an A setup is to wait for the price action to again shift and get in sync with the trend . Once that happens then only you can enter a trade as an A setup.

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 trs3042 
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jinhar View Post
Will cover everything this is just one setup there are another 3 setups which i need to cover once i do that then will cover all other stuff will do all slow and steady ..

I like the step by step layout of this thread. Very useful. Hoping this format will continue.

Keep up the great work Jinhar,

Rick

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