Trend Break Example

Trend Break (Swing Trading) Strategy

This strategy can be used for swing or intraday trading, but I am quicker to take profits on intraday trading.

Indicators

Trend lines
8 Moving Average
RSI

Time Frame

Primarily based on Daily; though I will play the same MA cross on Weekly and Monthly

Strategy

Break above a trend line and close above trend line
Close > 8 Moving Average
RSI >50 for longs
Prefer
- Large green candle closing over a red candle
- Higher volume over previous candle volume
Above 200MA offers a stronger position; especially if it is trending upward

Exits

We hit our price target, 3:1 ratio
- Learn to take profits at your targets or percentage
- Sell off at least 80% of your position at your target and allow your winners to run until other stops are triggered
Sell 80% on first red candle that closes below a green candle on higher volume
Sell remaining on candle closes below the 8MA and/or RSI <50

Analysis:

We enter on candle breaking above
Note the larger volume on large green candle
First red candle does not scare us and we do not close since the volume was less than the previous candle
Next day we continue trend
Third red candle closes below green on higher volume we close 80%
On the fourth red candle we close out our position with a red candle closing below the 8 MA

Think About It

You may use as little or as many strategies as you prefer
For your first strategy, you should be using the Daily or Higher time frame
What are your entry requirements?
What are your exit requirements or take profit zones?

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