STT - 简单趋势线交易 (STT - Simple TrendLine Trading)

Hi,

For those who come from my other thread, I hope you will find this upgrade to the system pleasing, to the new comers, Feel free to ask and I will try to describe things in more detail.

Let me first state that all of what you read here are my thoughts and they are not trading advices in any mean. You are always responsible for your own trades. Do a demo and make sure you are successful before going down to the real live business.

The System:

Its simply based on trendlines, no any other indicator will be needed, as the price tells you everything even without reading news. I will show you a few examples. On how I interpret the chart.

First of all all trend lines are drawn on wicks, and between two touch points, not a single wick or candle can cross the trend line when drawn. This can come to a point at the early stage of a trend that the trendline can be drawn on two candles as well. Why? As you see, there is always a lower time frame, so if the trend line fits on two candles, on an H1 chart it can be a proper swing on the M1 chart. I try to post examples.

Also I believe in an advancing trend, hence until a trend is concluded, it can be redrawn, I will show you examples what I mean on concluded.

Last and but not least the Stops and TP levels are finally clearly declared as in the previous thread, these were not well defined as it was hard to set. But this is the big improvement, that technically we can now trade kinda everything at anytime.

So, how to make your first drawing, firts its always the best to scroll back the chart to a point where it is 100% that you had an up or a down trend that eventually ended. This will help you to analize the chart until today and then you will see what can be the next step.

Example of this is here:



So the white lines are showing how the trend evolved. As the trend goes lower it kinda weakens, but the very first uptrend line was drawn up on those few candles, it got crossed, with that big red wick then made a new high. Hence I have redrawn the trendline, and used that wick as the new touch point for it once the new high was reached. Why? because the trend was not concluded. It would have been if the first RED trend line gets crossed. Which is the original touch point of the trend.

So as we advanced in time, we had a second crossing which is the highest RED line, and that crossing was not concluding the fresly drawn trend, but eventually we got a newer high, hence I have redrawn the trend once more. Leaving me with the final solid white trend line.

How this can be traded? Well every trend is based on a fact, if its an uptrend it makes higher highs, if its a down trend it makes lower lows. So, technically if we catch the right time around these crossings we can go for a trend continuation and gain fixed money knowing that the price must get to a newer high or newer low based on the trend.

This is the general idea, that we will always know what is our TP in a trend continuation, and the other fact is, that the trend line will always have to be crossed and concluded, which means the red lines will have to be reached eventually.

Now this was the original Idea, which had two flaws, I had no real Stop Losses here, as I used the current main trend line as a stoploss for buys in this example, and after making a new high, my TP would have been the trend line as well or the current RED line in case the trend might have turned.

However, I run into a problem, The price can get to a new high, which meant a good entry point for a short back to the trend line, but as the price might rally off, I can get so far away, that eventually my trend line might get above of my original trade, and giving me a fixed loss. Stop losss wise, its the same, if I traded againts the trend, my Stop was always the last all time high, which could have been crossed many many times. And my best entries were always around the trend line it self.

You can see a better discusison on this in my other thread, but I don't want to mix things up here with giving bad examples.

Now the upgrade to the system is this:



Conditions, Whenever you see a forming down trend, two new lows and a lower high, I start to draw my trend line (orange), if that line's last touchpoint, gets crossed, it means that trend is concluded, so no more down move to be expectedm hence I can get my trade going with the trend, first stop is the new high, but we can let it run by moving our stops to the new higher lows.

What is important are the pink lines, those are my so called "subs" And I use them for the first stop on the trade, actually that subs's last touch point. That is the key Upgrade, as that touchpoint helps me move my Stop higher and make it tighter, and that is the signal for a trend reversal. I will show you in another example.

Traditional stop loss setup: ratio 2.83



Using the Sub's touchpoint ratio 4.3

This is quite a change.

And finally the reversal:



As you see the last trade upwards was a loss trade, but the stop gave quite a close stop, and once that stop ended, we turn around immedeatly, and aim for our original trend line's conclude point the red dotted line.

And along the way as we were getting there these were all the other opportunities to catch this move:



So we were kinda never too late to do this trade

I will post more of this but have to go for the morning. Please check your charts and post if you see this forming.