Trend Trades Definitions

Definition of Trend

We defined UP trend as a series of rising troughs and rising peaks in higher time frames. To identify,  UP trend, we first identify troughs, but to say it is UP trend, we need to see 'rising troughs and rising peaks'.

We defined DOWN trend as a series of falling peaks and falling troughs in higher time frames. To identify downtrend, we first look at peaks but to say it is downtrend, we need to see 'falling peaks & falling troughs'.

NOTE:

Definition of FLIP.

In uptrend resistance can change role as support & vice versa. This is what we call FLIP. After breaks, price will make a new high in uptrend (rising peaks) or a new low in down trend (falling troughs'. Once price start to retrace, we will wait for price action within +50 to -50 from FLIP Line. We want to see First Swing Point. 

In higher time frames - we identify trend using trend definition. Next question, where the FLIP? In uptrend - the flip means at higher low & in DOWN trend the flip mean at lower high. And the Flip zone is within +50 & -50 from FLIP Line.

In higher time frames, we look at TREND & FLIP LINE

Definition Types Of pullback

During pullback, if the price bounces & formed the swing point at FLIP Line. We call this normal pullback & first swing point is the 'filter' for timing in entry. We identify pullback & first swing point in 'Trading Time Frames'.

During pullback if the price cross the Flip Line, bounce and formed the first swing point. We call this as Inside Pullback. We identify inside pullback and first swing point in 'Trading Time Frames'.

During the pullback, if the price bounce and formed swing point before reached the Flip Line, we call this as Outside Pullback. We identify outside pullback and first swing point in 'Trading Time Frames'.

So FLIP trades SETUP involved two part:

1. Trend & Flip Line in Higher Time Frames

2. Pullback & First Swing Point 'near' Flip Line in Trading Time Frames

Optimization: I defined near Flip Line as +50P to -50P from Flip Line.

Second Stage Is Timing or Pull the Trigger Definition:

ICON ONE  'Normal Pullback Long Trade Icon' only in Trading Time Frames.

ICON TWO 'Inside Pullback Long Trade Icon' in Trading Time Frames.

ICON THREE 'Outside Pullback Long Trade Icon' in Trading Time Frames.

Definition of Stop

Based on calculated risk reward ratio. First exit risk reward ratio  must be at least 1:2 or above.

First exit is always below existing 'new rising peaks' or above existing 'falling troughs' trading time frames or higher time frames. If existing 'new rising peaks' is 100P from entry; then SL must 50P or less. We identify 'good' trade based on risk reward ratio. If we have a setup can give '500P' by risk 50P - so this is consider as good setup.

Definition of Exit

First exit is based on calculated risk reward ratio 1:2.

Second exit is 'lets the profits' run until higher time frames trend reversed by definition.

Trade Pullback With Trend

What is trend trade?

A trend trade is a trade that takes a clear trend definition and trade the dips (pullback) on the UP trend and trades the rallys (pull-up) on a DOWN trend. Simple, Smart & Basic.

What we need to master for a trend trade is all this:-

1. To Open Position

a. Trend definition  & strategy for optimization (continue research)

b. Pullback (dips) & pull-up (rallys) definition & strategy for optimization (continue research)

c. Timing entry definition & strategy for optimization (continue research)

2. To Close Position

a. Stop definition & strategy for optimization (continue research)

b. Exit definition. & strategy for optimization (continue research)

So there are five structure all traders should master or at least get the 'right' definition and have a strategy for optimization then later to success in trend trades. Trend definition and pullbacks definition patterns will create a SETUP. Timing entry definition is a sign to PULL THE TRIGGER.Stop definition and exit definition is EXIT STRATEGY.

Three phase in trading are:-

1. Identify Setup - SETUPING

2. Pull the trigger - TIMING

3. Exit strategy - EXITING