Trend Line Strategy

The great Jim Rogers (for many the best commodity trader in the world) commented in an interview; “The best trading strategies are the simplest of all, it’s the traders who are complicated.” I completely agree with him and present a simple but effective strategy. If you are a trend hunter then look to draw one on 1-day charts (the most recommended) that is clearly consolidated, this means that the candles (let’s analyze the CAD/JPY) rest on the trend line. At least 2 or 3 white candlesticks of a respectable size formed the trend section and the correct entry to the market is to wait for the forced correction (Pull Back). Note that the Congestion Zone in yellow (approx 82.70) had been a good resistance zone that was breached around March 8, 2012 and then the price after hitting its top at approx 84.80 began to correct and fall. The fine detail here (what you have to practice and exercise a lot on) lies in finding the right wing to make the entry. A candle that respects the trend line and shows signs of price exhaustion. In this case, the candle enclosed in red was not only a Spinning Top, it was also in the congestion zone. Alternatively, there are techniques to be able to make the entry in daytime contexts, relying on 4h graphs.

For this real application we enter the market in buy risking no more than 50 to 70 pips (the length of the wick) and looking to earn at least the same, double or triple. We published this trading opportunity before it happened and we have already exited (attached our real account) and so far the pair has already risen more than 140 points. As Jim Rogers would say, this strategy is simple and only the trader can complicate it. Do not operate to operate, trading is a subject of great discipline and criteria. Only then will they understand how financial markets work.