If the price breaks the uptrend line, it means you have a chance to sell down and vice versa, if the price breaks the trendline, you have a chance to buy up. Just as simple as that.

Now let us go through a few notes when using the strategy before going into the trading rules section first.

You note the following points:
  • Timeframe: Any
  • Currency pair: Any
  • Technical indicators: not in use
How to draw the trendline

When the market is in a downtrend, you use at least 2 peaks to draw a downward trendline, and be careful not to draw a trendline that crosses the price action (ie, not across the tail and body).

Similar to an uptrend, you use the bottom to draw an uptrend line, you use at least 2 troughs to draw an uptrend line.

When you see a price breakout of a trendline, it is usually an early signal that the trend is changing. Now you are waiting for the right moment to enter a breakout trade.
Or see the chart and trading principles below for more information:


Principles of buy orders:
  • The market is in a downtrend and you need to find 2 peaks to draw a downtrend line.
  • Wait for the price to cross the trend line and make sure that the candlestick intersects the trend line which closes above the downtrend line.
  • After the candle closes you can open a long position by placing a buy stop order about 1 pip above the highest price of the trend line intersection candlestick.
  • Your stop loss is about 3-5 pips from the lowest price of that crossover.
  • Profit target you can set at the previous high or you can exit your order when an uptrend line appears and the price breaks out of this uptrend line.
Principles of sell orders:
  • The market is in an uptrend and you need to find two bottoms to draw an uptrend line.
  • Wait for the price to cross the trend line and make sure that the candle that crosses the trend line is the candle that closes below the uptrend line.
  • After the candle closes you can open a short position by placing a sell stop below the low price of the trendline candlestick about 1 pip.
  • Your stop loss is about 3-5 pips from the highest price of that crossover.
  • Profit target you can set at the previous bottom or you can exit your order when a downtrend line appears and the price breaks out of this downtrend line.
Trading management

A few techniques you can use to manage your trading:
  • If your trade is on track, use a trailing stop or a stop loss to lock in your profits in the event of a market reversal.
  • You can set the stop-loss point to follow the created top (for sell orders) and the created ones (for buy orders).
  • If the price moves at the same level as you are at risk consider switching your stop loss to breakeven.
  • If the price moves twice as much as the risk, consider halving your profit.
Disadvantages of the strategy

There will still be cases where the price reverses into the trendline, but you just need to focus on the trading principles of the strategy.

Sometimes candles break the trendline very long, making your stop-loss big. If you decide to trade in this case you should reduce the volume to limit the risk you accept.

Advantages of the strategy

The strategy is very simple, if the trend is right, the profit you get will be very significant and usable for all currency pairs and all time frames.