Trend Lines Breakout System

Breakout systems like this are always in great demand. It is quick, easy and with a proper use has a true winning rate of over 90%.

Currency pair: GBP/USD, EUR/USD - tested. Other pairs may also be used. Time frame: 1 hour. Indicators: none.

Trading setup:
For this Forex system to work properly a trader needs to know the basics of identifying swings high and low, rules of drawing trend lines, plus be able to use Pivot Points. These are very simple things we believe every trader should know.

Our working range includes 5 candles: from midnight to 4:00 am EST (including the 4:00 am candle). Optional: draw a midnight vertical line for visual aid.
Within those 5 candles look for a valid swing high and a swing low of the price. Draw an Downtrend trendline connecting a found swing High to the most recent swing High of the previous days. (Make sure the last one is valid High to draw an Downtrend trendline through it). Do the same for the swing

Low: connect it to the most recent swing low of the previous days, make sure you are pulling the right trend line using the rules of drawing Uptrend trendlines this time.
If a trader sees, for example, no Swings High in the 5-candle range, that means there will be no downtrend trendlines this morning.

The Entry is on the break of either one of the trendlines and is immediate without waiting for a current candle to close. A protective stop is placed just above/bellow the candle that broke through the trend line.






Profit target:
Usually the whole action is unfolded within the next three candles (count in the candle that had violated the trendline but only if it closed on the other side of the trendline). So, after the actual breakout we have 3 hours or 3 candles to trade, after that we will exit with whatever profits are made.
Main rule: Using Pivot points + timing
Profit target is going to be the nearest level of support or resistance according to Pivot point levels. If, however, after only one candle this target is reached, it suggests a very strong market, thus we would stay in trade and set the goal for the next support/resistance level. We would also choose the second Pivot point level of support/resistance as our profit goal if the first Pivot level appears to be too close to our entry point. We have three candles to trade after the breakout, that's why we can trade calm and allow our goal to shift to the next Pivot Point level.

It is an absolute traders' discretion of whether to set the target at the nearest Pivot point support/resistance level and leave the trade once the target is hit or using a timing factor exit after the two / maximum three consecutive candles.

Tip: running two orders can save lots of nerves. First target - the nearest Pivot point support/resistance level. Second - on the close of the third candle.

Another simplified option would be with fixed targets and timing
For example, EUR/USD target = 20 pips - spread, GBP/USD = 40 pips minus spread. These are only suggestions, and for other currency pairs = testing will tell... Hold position open for the next three candles. If the target is not reached within those three candle, close all trading positions anyway.
That's it. Simple and very effective.

Happy Forex trading!
Edward Revy, http://forex-strategies-revealed.com/

Trend line tunnel

Creating a support/resistance tunnel on the price congestion and trading on the break of this tunnel is a milestone of Forex trading discoveries.

This trading system/approach needs no indicators and can be applied to any currency and traded in any time frame where coiling in a tight range is spotted.

Entry rules: Find consolidation on the chart and draw two horizontal trend lines – support and resistance. Once the price breaks trough one of the trend lines and a current price bar closes outside the tunnel – buy/sell in the direction of the breakout. (If price pierces the trend line, but did not close outside the tunnel, cancel the previous trend line and draw another one according to the new conditions).

Note: also very often happens that once the price makes it through support or resistance it rocks down/up very quickly and so, more aggressive entry can also be adopted – without waiting for the current price bar to close.

Exit rules: not set, however, it is believed, that the price after breaking the tunnel will travel the distance equal to the width of that tunnel. Advantages: very simple and extremely effective. It can provide 100% profitable entries if short profits are taken - usually with the close of the first candle right after the entry. Disadvantages: very accurate and well thought entry point should be picked. Orders placed very close to the tunnel can be triggered by sudden whipsaw early before real breakthrough occur.
http://forex-strategies-revealed.com/