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Author Topic: TrendLine Trading with or without the Magic Wand  (Read 15189 times)

Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #45 on: December 06, 2018, 04:08:08 AM »
A Sloping SL Line is like a TS

One of the reasons I like trading with the Magic Wand using sloping trendlines is that they give you a TS as shown below. And of course if you have a sloping TP line based on say a channel, you can also benefit from having a "Leading" Profit. ie the take profit exit increases/decreases with the slope meaning that you can be exited at a better price.

Please see Reply #43 for important info re "named" trendlines when using the Magic Wand EA.
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #46 on: December 11, 2018, 01:27:37 AM »
Using Channel for TP and SL

Having entered a Sell on the break of a trendline, I now have the SL and TP trendlines in place as a channel - ie, effectively a TS and a leading TP.

I had the TP line too low last night so just failed to get a close; have now moved that up a bit to be less greedy and hopefully to get a close.

Progress so far with my Magic Wand trading is shown in image - trading 0.01 lot per trade whilst I practice.

Magic Wand http://exceptionalfx.com/magic-wand/ $40

(What is so good about manual trading with the Magic Wand?
Simply put, it means that you can place dynamic entry and exit points based on your own trendline analysis of the charts, and have the Magic Wand EA enter and manage the trade for you while you sleep or are otherwise occupied. You can also do all the analysis and place all the setups over the weekend if that is the only time you can devote to trading.)
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #47 on: December 13, 2018, 06:00:18 AM »
Finding Trendlines

If you are new to forex and having difficulty identifying trendlines, here is a free indicator that will draw trendlines for you. You can change things like period and timeframe.

A bit busy for my liking but could be useful as a start especially if you see trendlines converging - what they call a confluence;  an area which could provide a reasonable level of S or R.

And/or if you want some nice thick lines to indicate overall direction, here is a another freebie.
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  • DonbonsPrivateGroup
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Re: TrendLine Trading with or without the Magic Wand
« Reply #48 on: December 13, 2018, 02:05:21 PM »
This free 'heatmap' indicator can be useful too, for finding support and resistance levels:

https://www.mql5.com/en/market/product/5550

Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #49 on: December 14, 2018, 11:10:44 AM »
That's it for the week

It's Friday night in Australia and time to call it quits for the week.

Am happy so far with my Magic Wand trading. A few hiccups but still nicely in profit despite trying for some unusual setups. Manual trading does require some discipline. which I don't always have :)
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #50 on: December 20, 2018, 06:05:49 AM »
Trendline primers

Came across another useful article for trendline trading.

This one is the H&S pattern pointing out that the most favourable setup for this pattern is the one with the upward sloping neckline. Making it ideal for trading with the Magic Wand.   https://www.tradingsetupsreview.com/head-shoulders-pattern-trading-guide-depth/

In case you missed them, here are some previous info/suggestions:

1. Reply 27 - understanding Supply and Demand zones
2. Reply 32 - Double Trendline principle using two TFs
3. Reply 35 - Double trendline on the same TF

Have switched to trading with 0.02 lots in my testing so I can close 50% at a designated TP level in pips. Took a bit of a hit on the AUDUSD today (thank you FOMC) but CADJPY looks like making up for that loss. So should still finish this fourth week in profit. Will move to trading on live with the Magic Wand in 2019.
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #51 on: December 21, 2018, 06:07:56 AM »
Still doing well

I  am spending maybe 10 minutes each day checking for setups on the H1 timeframe. There seem to be plenty of opportunities without too much searching. Not looking for large moves and judicious use of sloping SL and TP trendlines.

Not all wins but the trend continues to go up.
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  • DonbonsPrivateGroup
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Re: TrendLine Trading with or without the Magic Wand
« Reply #52 on: December 21, 2018, 08:51:07 AM »
Looking good! Though everyone's results will be different with this one, of course. Would appreciate if you can post more examples of your trades to help me get into the right mindset for using this profitably.

Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #53 on: December 21, 2018, 09:38:11 AM »
Looking good! Though everyone's results will be different with this one, of course. Would appreciate if you can post more examples of your trades to help me get into the right mindset for using this profitably.

Sure. Will do. Here is one that looked good but failed today. So price had dropped more steeply than longer term trendline. On the shorter term TL we had a bullish divergence with MACD. So was hoping for a pullback to the longer term TL. But the market thought otherwise!

Note that my win rate is only 54% but pf is around 1.3 because of favourable reward to risk.

(To save me explaining each time - I use grey TLs to mark up the Daily or H4 charts to give me perspective. I then use dark orange for entry lines and make them non-ray - so time limited. I then use red lines for SL and green for TP and make them Ray lines so that they extend into the future to cover any trade that is triggered.)

PS Version 04.00 will be issued soon - v01.00 seemed to miss entries from time to time, probably due to intermittent broker connection, so now entry is looped.
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #54 on: December 22, 2018, 06:01:52 AM »
Looking good! Though everyone's results will be different with this one, of course. Would appreciate if you can post more examples of your trades to help me get into the right mindset for using this profitably.

So here is a possible setup for Monday on the AUDNZD.

1. The analysis starts with the Daily - nice downward channel, with two long pin bars rejecting the R line; so initial prognosis is for downward continuation.
2. On the H4 a double top is evident and no indication of any divergence, and so hopefully not a bear trap.
3. On the H1, price is just above the neckline of the double top and again no divergence is showing and no evidence of the channel morphing into a terminating wedge.
So set:
    a. sell stop TL just below the neckline;
    b. slope the SL trendline so that it starts with at least a 1:1 reward:risk ratio and slopes down parallel to the long term R line of the  channel (ie effectively a TS);
    c. TP trendline just above the next major S/R line from the Daily

Then add the Magic Wand EA to the chart, make sure there are only the three named trendlines (SL, TP and sell stop), decide on whether to enter on close of bar or whenever price touches sell stop line, (same for exit), enter lot size and decide whether or not to do any partial closures, set BE, add scale-ins etc (suggest to keep it simple). This is only a 30 pip trade unless we aim for the next R line or do a sloping TP line within the channel.

Hopefully that gives some idea as to the process you might follow. You can adjust SL and TP trendlines as the trade progresses, but just make sure you don't accidentally cross price with the trendline when you do that.
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  • DonbonsPrivateGroup
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Re: TrendLine Trading with or without the Magic Wand
« Reply #55 on: December 22, 2018, 10:12:03 AM »
Looks like a good one! I think I would put the TP a bit more north to be on the safe side. Do you ever use a TS instead of, or in addition to the TP?

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Re: TrendLine Trading with or without the Magic Wand
« Reply #56 on: December 22, 2018, 11:22:20 AM »
Looks like a good one! I think I would put the TP a bit more north to be on the safe side. Do you ever use a TS instead of, or in addition to the TP?

Should be, but the experts suggest that a reversal setup, ie a bullish divergence on the MACD in this case, would provide a safer bet, and would mean going long. We'll see.

A sloping SL line is in fact a TS because the stop gets tighter as price moves forward to the right (the steeper the slope the tighter the TS) - price moves at angles mostly, not straight up and down. But with the Magic Wand you can also trail  by pips or ATR if you wanted to. I like to have my TP and SL lines converging at some point in a pincer type movement.

One further option. Price has moved down fast and is sitting on a S/R zone. So could bounce a bit before heading south. So we could additionally place a sell limit order trendline some 10 to 15 pips higher. And see which gets hit first. Would be a very tight SL for the limit order, and hence only very a small risk.
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Online diyforexskills

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Re: TrendLine Trading with or without the Magic Wand
« Reply #57 on: December 23, 2018, 06:56:05 AM »
Here is another possible setup, for GBPAUD H1

Looking for a reversal - pretty steep recent climb, approaching the 1.8 big round number which is also a Daily S/R zone, and bearish divergence with MACD on the H1 (less clear on the H4, so ??)

A possible 90 or so pips trade. I may tighten SL by increasing downward slop of SL TL and/or moving it closer to price action once trade is under way. But Monday could be a very quiet day with little movement given Christmas on Tuesday.
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Re: TrendLine Trading with or without the Magic Wand
« Reply #58 on: December 23, 2018, 11:13:05 PM »
OK, I have set up a trade similar to your AUDNZD one. Let's see how it goes.

By the way, I assume the percentage of risk function does not work with a trendline SL...? Would it be possible to program it as such?

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Re: TrendLine Trading with or without the Magic Wand
« Reply #59 on: December 24, 2018, 03:01:43 AM »
OK, I have set up a trade similar to your AUDNZD one. Let's see how it goes.

By the way, I assume the percentage of risk function does not work with a trendline SL...? Would it be possible to program it as such?

The weekend gap killed my entry line, so no trade taken. But I have got in now after the rebound.

As to % Risk. I did not think it would, but I gave it a go. And to my surprise it works! Given the lot size that was entered, it must have used the SL value from the SL trendline at the entry point. That would make things interesting. The closer the entry occurs to the SL line, the larger the lot size will for the same % Risk. As per image.

I would want to test that out on demo before I apply it to live. But thanks for asking. Would not have occurred to me.
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