Trend Following Breakout System

Trend Following Breakout System

Even when incorporating trend following on higher timeframes

Similarly, breakouts are preferable

This is because it operates as a flag pattern on shorter timeframes

On shorter timeframes, the trend is reversing

And a trend is being formed to some extent

At this time, short-term traders are switching positions

When the long-term timeframe resumes the trend

The short-term timeframe ends up as a flag pattern

Naturally, the short-term traders at this time will be holding positions without switching

The essence of the market is influenced by the number of trader positions

Gradually, the balance of trader positions changes and the weight becomes biased

Considering this, this Trend Following Breakout

Can skillfully ride the imbalance of buying and selling

However, one thing I can say is

Please place more emphasis on “only following an inclined trend”

For example, in markets with horizontal support/resistance like in the image, don’t trade

Why is it important that it is inclined?

It depends on where traders are buying and selling

In the case of horizontal support/resistance, the location of support/resistance is simply obvious, isn’t it?

Being obvious means it’s easy to cut losses

Therefore, breakouts are “less likely to succeed”

In a situation where it’s easy to fail and the trend hasn’t appeared yet, follow-breakouts tend to fail

With an angled support/resistance

Where support/resistance is, it becomes support/resistance via a trend line

At this time, will it be easy to cut losses?

For the trader, “it’s not easy to cut losses,” right?

Then what happens when it turns into a trend reversal?

Some people may rush to cut losses since losses are delayed

After estimating a certain number of transitional traders

A flag is formed indicating the resumption of the trend

What is entering at that time is

Trend Following Breakout

So when it breaks on an angled support/resistance trend, the subsequent move moves in the direction of the trend

Now, as a trading indicator,

We base on the 34 MA

Along with the 34 MA, we display roughly 0.1% of the 34 envelope. This means showing the 34’s h***

It does not mean the envelope is always effective

Why do we display the 34 h***?

Because it is easy to understand for angled support/resistance analysis

By just looking at the MA h***, you can understand whether the trend is slanted

Basically, movement around the highs and lows of the h*** guides the trend estimation

If buying pressure is strong, it moves above the highs

If selling pressure is strong, it moves below the lows

We display the CCI. CCI is 20. The level values are set at 100 and -100

CCI is used as a supplementary tool when actually entering a breakout

As a trend follower

First, to estimate the trend,

We estimate buying and selling pressure trends with the 34 MA h***

If you understand it as a trend market

Then after touching the 34 MA, break the trend direction’s h*** and break the CCI trend direction’s ±100

This is where you enter

If you want to trade with confidence, break the trend direction’s high** after

Wait about five bars before trading

If during that time the trend market hasn’t stabilized, refrain from trading to prevent losses

As for stop-loss position

Use the 34 MA or the high** opposite to the trend as the stop-loss position

The target (limit) can be considered equal to or two to three times the stop-loss

When the trend market is stable, it is also recommended not to set a take-profit and instead let profits run

Since the trend market is guided by angled support/resistance, simply the top of the trendline can be an appropriate take-profit level

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