Trendline Breakthrough Trading System
This simple system of Forex trading is based on the concept of “trend”, i.e. movement in one direction. On different timeframes the movement can be multidirectional. But any movement changes its direction. Trendline Break identifies these changes and is applicable to all time periods and trading instruments
In the figure, the daily chart of EURUSD, the breakthrough of the trend line on May 9, 2014 at the level of 1.38. After that, the pair breakthrough fell by 3400 points. On other timeframes the movements are not so large, but for each of them it is possible to define the purpose. Trendline Break uses only trend lines and Heiken Ashi candlesticks. In contrast to traditional Japanese candlesticks, Heiken Ashi helps the trader to see the trend change at a glance
Example of medium-term trading on an hourly chart. Trend lines are drawn at the two lower points when moving upwards, and at the two upper points when moving downwards. The position for sale opens when the trend line is broken and the color of Heiken Ashi’s candlestick changes. Then we draw a trend line at two local maximums and wait for its break-down to close the position
Intraday trading on chart M15. When a trend line is broken up, a Sell position is opened. After formation of the local minimum, we wait for the breakdown of the trend line downwards. In this case, the position could also be closed when Heiken Ashey’s red candle appeared
Same situation on the hourly schedule. To make a decision on opening and closing positions, it is necessary to analyze the charts of different timeframes. The Trendline Break trading system can be used independently or in combination with other indicators. For example, it is useful to use indicators of support and resistance levels to identify targets.
Download Heiken Ashi