FXstreet.com Live Sessions Archives: Top Five Tricks of Trend Trading

Expert: Rob Booker, Currency Analyst at Piptopia

Topics to be covered during the session:

- How to capture biggest moves
- Five special techniques

Who is Rob Booker?
Rob is a foreign currency trader. He also trains traders around the world to be more disciplined and profitable. He has worked with traders on every continent that sustains life in any meaningful way.

Rob 'practiced' law, printed t-shirts, sold magazines, taught Italian, recruited CPAs, started an advertising firm, ran an e-commerce company and roofed houses before he realized that he was better at getting jobs than he was at staying with them.

Okay, since we're all talking in the third person, I'll let you also know that Rob was fired from every job he ever got.

Consumed with the question of why he was working at jobs that he didn't like -- and how to move past those jobs into a career that brought him true happiness -- and the ability to play video games, watch movies, and chat with people around the world while attempting to build an empire of wealth beyond any mortal's ability to imagine, Rob talked to people across the country and around the world. When he met a group of successful foreign exchange traders, he learned everything he could, until he started a full-time career trading currency.

Rob now maintains a foreign currency advisory practice close to home. He has been called the "Motley Fool of Foreign Exchange" and the "Prime Minister of Pips". His columns are read by over 3,000 people each day.

Session Material:

Guiding Principles of this eBook

1. I can teach you, in one hour of chatting together here, to identify trends.
2. You can find ways, when you identify trends, to earn consistent trading profits.

Definition of a Trend

A trend is the general, dominant direction of a market or an asset. If we say that the trend on the EUR/USD is up on the daily chart, then we are saying that the EUR/USD has been moving upward and is more likely than not to continue to do so.

Additional Resources

The eBook you are reading right now is, hopefully, just the beginning of our discussion on this topic. To encourage you to explore the subject more deeply, I’ve provided some additional resources.

Investopedia has a good definition and section on trend trading here:
http://www.investopedia.com/terms/t/trendtrading.asp

A discussion about this eBook can be found at Forex Factory:
http://www.forexfactory.com/

An audio podcast, and a video-cast of this eBook, including my views about the USD trend right now, can be found at:
http://www.piptopia.com/2006/10/30/5_secrets_of_trend_trading.php#more

Richard Dennis’ rules for trend trading can be found here:
http://www.robbooker.com/woodchuck/training/turtles/turtlerules.pdf

My basic trend following system can be found here:
http://www.robbooker.com/books/5_13_62.pdf

Trend Trading has a Long History

Richard Dennis, the guy I mentioned above, is not the inventor of trend-trading, but he certainly made it famous. A famous trader named John Henry became so rich he was able to buy his favorite baseball team, the Boston Red Sox. I traded the 5/13/62 rules for 18 months very profitably.

Do the all these trend rules work? Sure they do. People have made hundreds of millions of dollars following the rules. But are there other ways to trade with the trend besides the turtles, or my EMA crossover system? Of course!

Or you can do a search for “Trend Trading” on Forex Factory (www.forexfactory.com), which will have a zillion discussions going on about the identification and proper trading of trends. The point is that finding a set of rules for trading with a trend is easy. That’s the easy part! The turtle rules, or my moving average strategy above, are both free. No charge. That should be your favorite price.

But once you get your greedy little mittens on the rules, what’s next? If the rules are so easy to find, then what makes the difference between a profitable trend trader and a losing one?

The Tricks Aren’t Secret at All

Everything you’ll read in this eBook is probably available elsewhere. For free. But I’m going to try to incorporate the most important elements of a profitable trend trading system. I am not going to talk about entry and exit rules – you can find those in the links above, and share more ideas with each other in the forex factory forum that has been created.

But what I do share – the information below – is truly what has made the difference for me and hundreds of other traders around the world.

Trick #1: Verify First, Then Trade
Most people totally ignore me when I talk about testing. When I train people to trade, I focus most of the training on helping them do their testing. I have developed spreadsheets, methodologies, statistical models – all designed to help traders realize that they must verify that a system works before they commit to trading the system with real money.
Don’t ever trade anything you’ve not tested first.

What does it mean to test? It means that you propose some simple rules for trading. Then you go back in time, manually or mechanically, and you find out how those proposed rules would operate over the course of hundreds of trades. That’s right: hundreds of trades.
Think about it for a moment: if you are not confident about your trading, it’s most likely because you have doubts about the outcome of the trades you are taking. And if you are doubtful about the outcome, then you need to do more testing until you have a better sense for what’s going to happen when you open a trade.

Trick #2: Become Obsessed with One Area of Focus.
Discipline yourself to focus. Diversification is good for your portfolio. It is not good for your career.
Let’s look at some examples. Think of the very best attorney or doctor that you know. Does that person specialize in one area, or does she practice law or medicine across a huge subject area? My guess is that she is known for one type of legal specialty, or as a doctor, she is a cardiologist (hearts), radiologist (treating cancer), or something else.

The highest paid professionals are specialists. Why should that be any different for you?
You are wise to diversify the investments that you can’t watch closely. You don’t want to commit your entire life savings to forex. You might have money saved in the equity in your home, some in a retirement account, some money in a bank savings account, and then some in a forex trading account.
But if you are going to be a forex trader for a living, then it makes sense – with respect to your currency trading, to focus on a currency pair, a system for trading that pair, and a time frame for watching that pair. If you focus on one currency pair to start, you can become as much of an expert as possible in that one area.

How does this relate to trend trading? It is the heart of the issue, it is the foundation for you to become successful as a trend trader.

Let’s say that you read my 5/13/62 eBook and you decide that you’re going to focus on that system. Becoming obsessed with one area of focus means that you set aside time every day to test 50 historical trades. And that you only watch one currency pair to start. And that you only watch one time frame. And you become an expert in that system, on that one currency pair, in that one time frame. If you look at 1,000 trades with those parameters, you are going to become an expert.
If you become an expert, you are going to trade profitably.

Trick #3: Different Trends on Different Time Frames
The EUR/USD can be trending upwards on the daily chart, but on the 5 minute, it can be trending downward.

Really? Is that possible? Absolutely!
Think about it for a moment – if you have a long term, daily, dominant move upwards on the EUR/USD, it’s possible that in the shorter term we could see a movement in the opposite direction. So remember, if you want to be a trend trader, you can choose to follow the trend on a variety of different time frames.
If you have a full time job, you might look at trends on the daily and weekly charts. These trends take much longer to start and finish – but they are worth a lot of pips – even more than 1,000 pips.
If you are able to trade during the day, you might look at the very short term charts. I have been testing a new trend following system that works even on the 1 minute charts. I don’t trade from the 1 minute charts (at least right now) but I would be willing to follow a trend on just about any time frame. The point is that each time frame can have its own trend.

Trick #4: Trend Trading Requires Courage & Money Smarts
If you want to become a trend-trader, you are going for the big moves. You are NOT going to be trying to get 10 pips on each trade (I talk about that here: http://www.robbooker.com/books/Strategy10.pdf). You’re going to want to get 50 to 500, and maybe even many more pips, when you are trend trading.
To do this you are going to have to commit yourself to a patient process of waiting for a trend to develop, and then to stay in your trades. Most currency traders are focused on the short term – and there are lots of jumps up and down in the short term. Have you ever noticed that after a major economic release, a currency pair will initially move in the direction you expect it to go, but then all of the sudden it will move the opposite way?

Take, for instance, a Non Farm Payroll report where the number is low, or in other words, “bad” for the US Dollar. And then, all of the sudden, the US Dollar grows stronger anyway! This infuriates traders. I get at least 50 emails every time a major economic report comes out, with questions just like this. It’s a great question. And the answer is often that the trend was more dominant than the news.
Let’s take the example of a recent downtrend in the GBP/USD on the 1 hour chart.

Figure 4.1. The GBP/USD, on the 1 hour chart, temporarily spiked upwards after a Non Farm Payroll report. But soon after, the major trend continued.

As you can see in the chart, a small spike upward really didn’t mean anything. It was a temporary moment of market chaos after the U.S. Non Farm Payroll report was released. Do you see how short term news does not necessarily have a major impact on the trend? I say “necessarily” because I want you to know that it’s possible that the Non Farm Payroll could have started a reversal of the trend. But it did not. Once we saw that the previous trend was going to continue, then we could confidently trade in the direction of the dominant trend.

In the case of the chart above, the smart money stayed with the trend.
The other element, besides courage, is what I like to call “money smarts.” This means that as a trend trader, you’re going to keep your trade size small. To ride out a trend, as in the example in Figure 4.1, you have to be able to take a big temporary loss in the GBP/USD before it starts trending in the downward direction again.

Does that make sense? As a trend trader, you’re going to have to watch a currency pair move against you, and you are going to not only require the courage to stay in the trade, but an account balance that can withstand the loss.

Have you ever made a great trade, but you couldn’t stay in it long enough because you took a big loss? Meaning, you made the right call on the direction, but you got stopped out before the big move? The answer to this is that you traded too large. Scale back your position size if you’re going to ride the trend.

Trick #5: TV People are Wrong
Watch out for the news. Be wary of commentators on CNBC or Bloomberg that say things like “the trend on the USD is certainly up,” or “traders would be wise to scale back their long dollar positions because the trend is going to be down.” These people don’t trade your account. They have no idea what chart time frame you are watching or what trading system you follow.

In the past 4 years, I have worked with approximately 1,060 traders from around the world (as of October 31, 2006). Most of them, at one time or another, were scared out of a really good trade because they heard something on television, received an email, or were influenced by a friend.

If you watch TV and you see some windbag get fanatical about one trade or another, then run away from your television as fast as you can. It is better to smash your television than it is to base your trade ideas on what you learn there. Keep in mind that I didn’t say that you should NOT watch business news. I just said that we need to be careful about what we allow ourselves to listen to.

Conclusion

You can get rules for entering and exiting trend trades from all over the Web. They’re easy to find. What makes the difference in trend trading is doing the little things right – the stuff that most traders overlook. For me, it’s all about discipline in your testing, in your trading, in your money management.

I try to give a lot of material away for free. I hope you’ll stop by the Web site, and I hope that you’ll stay in touch. Remember, the free audio and video versions of this ebook are available on my blog, at this address:

http://www.piptopia.com/2006/10/30/5_secrets_of_trend_trading.php#more

Keep in touch!

Session Speach:

FXstreet Moderator (Oct 31, 2006 9:36:12 AM)
Welcome to FXstreet.com Q&A Forex Session. Today’s session will start in 10 minutes.

FXstreet Moderator (Oct 31, 2006 9:36:19 AM)
Meanwhile we recommend you to read the speech material that you can find on your left window.

FXstreet Moderator (Oct 31, 2006 9:36:32 AM)
This Q&A Sessions allows users to start asking live questions from the very first moment of the chat.

FXstreet Moderator (Oct 31, 2006 9:46:45 AM)
Welcome to the Session. Today I am delighted to welcome our guest speaker Rob Booker, Currency Analyst at Piptopia.

Rob Booker (Oct 31, 2006 9:48:57 AM)
Good day to everyone! I appreciate that you have taken the time to discuss trend trading with me today.

Rob Booker (Oct 31, 2006 9:49:30 AM)
I am excited to answer your questions -- so please send them at any time and we can cover them during the chat today; if we do not have time today, please send me an email at rob@robbooker.com and I can answer your question personally as well.

ddd333 (Oct 31, 2006 9:49:57 AM)
question: rob at the moment we are in a uptrend on the GBP but its hitting major Resistance, doesnt think mean the trend stop and reverse back to 1.8500. or is it safer to assume it will go to 9200+ ?

Rob Booker (Oct 31, 2006 9:50:56 AM)
That is an excellent question. The answer is that just because it is hitting resistance does not mean that it must reverse -- hitting resistance simply means that for now, it could stall and not move as much, or move sideways. Then it can move upward or downward.

Rob Booker (Oct 31, 2006 9:51:13 AM)
Now, as far as the GBP/USD is concerned...

Rob Booker (Oct 31, 2006 9:51:51 AM)
It is just now trying to break above yesterday's high number, and that is a good sign that we could see the trend continue. Remember that trends always last longer and go farther than people believe.

Guest_leonardogmi (Oct 31, 2006 9:52:05 AM)
hi, according to your comments, wich tools are especially useful to capture big moves?

Rob Booker (Oct 31, 2006 9:53:20 AM)
Leo, thanks for asking. For me, there are two main indicators that I like to use for trend-trading. The first is the 62 Exponential Moving Average, which I have been using now for over 5 years. In a trend, a currency pair tends to drop back to the 62 EMA and continue, and it acts as a very nice barrier -- especially on the GBPUSD.

Rob Booker (Oct 31, 2006 9:53:47 AM)
The second indicator that I have used with success is the Parabolic SAR. It does a fairly good job of keeping you in a trend.

materialgirl (Oct 31, 2006 9:54:20 AM)
Hi, Rob. Nice to meet you first time, been reading some of your trading lessons before on your web site. So what's the best indicator/method/system that you can suggest to identify the beginning and end of the trend?

Rob Booker (Oct 31, 2006 9:55:21 AM)
Well, it is a material world, and I am a material girl. Thanks for the question. I still believe after 5 years that the 62 EMA is the very best trend indicator that I have used. In today's eBook, I have provided a link to my free ebook on the 62 EMA, and that has been a system that has worked well for me for a long time now.

znich (Oct 31, 2006 9:57:15 AM)
Rob you mentioned that if focus on one currency pair to start you can become an expert, are you using multiple trading model approach by diversifying your trend following idea in the number of currency pairs and different timeframes?

Rob Booker (Oct 31, 2006 9:58:36 AM)
After I backtest 1,000 trades for one currency pair and one time frame, I am willing to move on and test another. After I backtest 1,000 trades, I am willing to trade live with that system, that currency pair, and that time frame. Right now, almost all of my trades are the GBP/USD. But I also trade the USDJPY, the GBPJPY, the EURJPY, the CADJPY, and the EURCAD.

Rob Booker (Oct 31, 2006 9:59:58 AM)
I do believe that it is perfectly acceptable to trade more than one currency pair -- I have had as many as 5 different currency pair trades open at a time. But in reality, it does take more focus and attention to manage multiple trades. And I prefer to keep it simple.

libra02 (Oct 31, 2006 10:02:04 AM)
basically you use technical indicators only?

Rob Booker (Oct 31, 2006 10:02:57 AM)
That is correct. I am primarily a technical trader. I believe that it is important to follow the fundamentals of a currency pair, but those fundamentals back up my analysis -- they do not completely dictate the analysis.

Rob Booker (Oct 31, 2006 10:03:56 AM)
I have found that news, or economic fundamentals, can disrupt a trend in the short term, but generally a trend is a trend is a trend -- and it's going to continue regardless of the news that comes out.

nich (Oct 31, 2006 10:04:16 AM)
WHICH TIME FRAME DO YOU USE THE PARABOLIC SAR

Rob Booker (Oct 31, 2006 10:05:25 AM)
I have used the PSAR on the 1hr and the 4hr charts, but never on any other time frames. If you are going to do some testing with this indicator, I strongly recommend you read all of the materials on the Investopedia Web site about that indicator, and that you also think about changing the settings on the standard indicator -- meaning, change the settings and see if you can capture longer trends and so forth. Testing is the big key to success.

texxas (Oct 31, 2006 10:06:06 AM)
any timeframes which you wouldn't use the 62 as a guide Rob?...or is sufficient to guage price across most of the mid-long term frames?

Rob Booker (Oct 31, 2006 10:06:55 AM)
I have used the 62 on the: 1 minute, 5 minute, 15 minute, 30 minute, 60 minute, 4 Hour, daily, and weekly. I think it works on all of them.

ddd333 (Oct 31, 2006 10:08:28 AM)
would you take NY session buy now on the GBP its already moved so much is there still room, if we are in a uptrend i see no reason NOT to take it even though the stop has to be outside the box now

Rob Booker (Oct 31, 2006 10:09:49 AM)
I do not advocate getting in late -- I strongly recommend that you take the position at the correct entry price. Now, if it is trading at the entry price right now, then for me it is okay to still enter the trade. But it is important to get an entry within a pip or two of the actual entry price that the system tells you to take.

fxmosaad (Oct 31, 2006 10:10:21 AM)
rob, all these indicators are lagging, how can I use them perfectly to identify a trend in its early beginnings?

Rob Booker (Oct 31, 2006 10:12:18 AM)
That is a really, really good question. I mean no disrespect in my answer. And here is my answer: it does not matter if you get in perfectly at the early beginnings. What matters is that you catch a good portion of the trend -- and even if you get in a bit late on the trend, these "lagging" indicators can do a great job of catching a huge part of the trend move.

Guest_davedownunder (Oct 31, 2006 10:13:36 AM)
Hi Rob, what timefrme do you use to identify the major trend

Rob Booker (Oct 31, 2006 10:14:34 AM)
I trade primarily from the 60 minute charts. In the past I have used all of the chart time frames that I mentioned above -- and I truly believe that you can build and test a system using any of those time frames.

wookashc (Oct 31, 2006 10:16:15 AM)
Hi Rob, this may be a silly question, but which method of calculating EMA is best - close, open, high, low, median (HL/2), typical

Rob Booker (Oct 31, 2006 10:16:47 AM)
That is awesome that you asked that. I have only used the "close" version for years now, but it is very, very worth the time to test some of the other options.

nich (Oct 31, 2006 10:17:56 AM)
Which timeframe you prefere for the parabolic SAR?

Rob Booker (Oct 31, 2006 10:18:32 AM)
The 1hr or the 4hr.

materialgirl (Oct 31, 2006 10:19:04 AM)
OK thanks Rob! But how to filter out of those ranging market days? Most of the time there

Rob Booker (Oct 31, 2006 10:20:19 AM)
That is a bit more complex, and I appreciate the question. The 5/13/62 eBook can answer some of those questions about the ranging market, and I also want to point out that if you simply look at the widening of the 13 and the 62 -- when they are separated at an angle, you can be more sure that there is a trend developing.

Rob Booker (Oct 31, 2006 10:20:34 AM)
But watch out for times when the 13 and the 62 are just on top of each other and going sideways.

capsmart (Oct 31, 2006 10:21:06 AM)
Hello Rob. I would like to have some clarification concerning your system. 1. For SAR do you use the default settings? and to buy EURUSD price must cross the 62 EMA AND SAR be under the price?

Rob Booker (Oct 31, 2006 10:22:24 AM)
I am sorry for the misunderstanding -- I apologize in advance for what I am going to say. I did not state any RULES for using those indicators. Today I've just mentioned that I have used those indicators in the past. I strongly encourage you to read the free 5/13/62 ebook for more information about how I have used those moving averages.

Rob Booker (Oct 31, 2006 10:24:29 AM)
And for the PSAR, you could develop a system that would combine the PSAR with the moving averages. I recommend that if you do that, that you CHANGE the standard settings on the PSAR to something different -- play with some of the different settings and test how those work. The PSAR can be awesome, but I WOULD NOT use the standard settings in my testing.

materialgirl (Oct 31, 2006 10:26:19 AM)
How to filter out from the ranging markets, when using a trend following system?

Rob Booker (Oct 31, 2006 10:27:58 AM)
I think I answered this above ... about reading the 5/13/62 ebook, watching out for the EMAs on top of each other...

znich (Oct 31, 2006 10:28:26 AM)
Thank you for your unswer Rob... another question,have you tried to automated your idea withing different pairs and timeframes in order to ease the data management?

Rob Booker (Oct 31, 2006 10:29:06 AM)
No. I do not like automated trading very much. I prefer to have human control on the trades. It is possible to program every system that I use for trading, but I have liked trading them on my own.

texxas (Oct 31, 2006 10:30:22 AM)
Rob...do you compound into trend runs much?.....I realize a lot of methods advise scaling out/booking partial profits....do you reccommend adding back those banked stakes when continuation signals dictate?

Rob Booker (Oct 31, 2006 10:30:59 AM)
I actually do not advocate scaling out of a trend, but rather adding to the position as it goes in your favor. I believe that when a trend develops, you should pounce on it and just load up as the pair goes further in your favor.

Guest_Andrew (Oct 31, 2006 10:31:23 AM)
Rob, i have a question about the GBP/JPY it has shown sign of weekness but it doesnt look like it gonna correct it self down is it?

Rob Booker (Oct 31, 2006 10:31:59 AM)
I will look at that chart right now.

Rob Booker (Oct 31, 2006 10:32:52 AM)
A break lower than 222.50 means, in my opinion, that the pair would go down to 222.00, and a break lower than 222.00 would take the pair to at least 220.00. But until then, It is hard to trade against the massive trend on this pair. It is a super trending currency pair.

Rob Booker (Oct 31, 2006 10:33:38 AM)
I think right now it is correcting quite a bit, as the GBPUSD rises this pair is falling.

Guest_leonardogmi (Oct 31, 2006 10:33:50 AM)
Rob, 5/13/62: in the moment the candle touch the 62 EMA do you pay attention to the cross of the 5 EMA and the candle? I ask because i observed this pattern and i founded related with the probabilities of success of the system

Rob Booker (Oct 31, 2006 10:34:09 AM)
That is not a bad filter at all. That's perfectly acceptable to add as a filter.

milan (Oct 31, 2006 10:34:47 AM)
With regard to the 5/13/62 what would be the most conservative time frame you would apply? Some people will also use Vegas as a filter. Would you support it?

Rob Booker (Oct 31, 2006 10:35:36 AM)
I think the Vegas stuff would be just fine as a filter, as long as you test it. Remember that it all comes back to testing -- if you can test that it works, then it works! The shortest time frame I would use is the 30 min chart on that system. The longest time frame is the daily.

cliffhanger (Oct 31, 2006 10:35:48 AM)
Rob on a smaller time frame is it advisable to trade against the trend? Or should one wait for the inevitable correction and stay with the trend?

Rob Booker (Oct 31, 2006 10:36:46 AM)
It is okay to trade against the trend as long as you have a system tested to prove that it can work. For instance, I teach an against-the-trend system in my training, and it works quite well -- but we have tested thousands of trades to prove that it works. So, the answer is again that it's totally okay to do it as long as you test it.

Guest_leonardogmi (Oct 31, 2006 10:38:44 AM)
i agree your comment about the fundamentals and its relation with analisys, but, if there is an open position do you prefer get out of there before the new is public? or do you stay on the move?

Rob Booker (Oct 31, 2006 10:40:48 AM)
If I am in a trend trade, I will not exit before the news. In my backtesting, I did not worry about the news -- and I did very well. So in my actual trading, I don't worry about the news. Remember, the news, in a trend, is likely to help your trade go further in the direction of the trend.

Guest_gabrvila (Oct 31, 2006 10:42:09 AM)
Hi Rob. If I am a trend trader, what is the maximum percentage by trade that I could accept without affect my account?

Rob Booker (Oct 31, 2006 10:43:11 AM)
I think that you simply need to make sure that the original stop loss you have set, if it is hit, does not cause you to lose more than a few percentage points of your account. You never want to lose more than 3% or so on any one trade.

Guest_leonardogmi (Oct 31, 2006 10:43:35 AM)
Rob: 5/13/62: can we reenforce the 62 EMA with 100 or 200 EMA´s?

Rob Booker (Oct 31, 2006 10:44:17 AM)
Yes. Defintely. Absolutely. We are building a new system for the training students that uses multiple moving averages to filter the trade. I hope you will consider doing the same -- coming up with your own filters.

rumiguru (Oct 31, 2006 10:44:36 AM)
The fundamentals suggested a stronger dollar today??What happen?? Thanks Rumiguru

Rob Booker (Oct 31, 2006 10:45:30 AM)
Oh....never, ever, ever, ever, trust the "fundamentals". I say this in the ebook. The trend is dominant. It is more dominant than the news. Do not ever say that because a report was positive or negative for the dollar, that the dollar MUST rise or fall.

Rob Booker (Oct 31, 2006 10:46:20 AM)
This is so important that I cannot emphasize it enough. There are fraudulent news trading systems for sale on the Web that encourage you to make immediate decisions about the direction of the USD based on the news, but those systems can get blown up into a million pieces when the trend is dominant.

yleekyot (Oct 31, 2006 10:46:39 AM)
if you backtest a pair when the candle has stopped, do you do the same live, wait for the candle to stop??

Rob Booker (Oct 31, 2006 10:47:16 AM)
Yes. Very yes. Excellent question.

Guest_nqfinancial (Oct 31, 2006 10:47:33 AM)
Rob, I just applied the Parabolic SAR to a chart. Howver, I am not entirely sure how to read it. Any specific/good sources you would suggest to learn how to use it?

Rob Booker (Oct 31, 2006 10:49:36 AM)
I am not here to sell you anything -- but first of all I will say that I can teach you a super profitable trading system for the PSAR as part of the training that I do. I will include Max Fox, my trading partner, in doing that. Now, also, you can read about the pSAR in Investopedia, John Murphy's book, Martin Pring's book ... there are lots of good sources.

texxas (Oct 31, 2006 10:50:00 AM)
do you ever "job" trend run positions? ie: execute pullback triggers on the smaller frames (5&15m) to protect your longer term swing/trend positions?...to maybe larger frame Fib or prev swing high/low levels?

Rob Booker (Oct 31, 2006 10:52:03 AM)
Texxas, I am really happy to get your question. It's fantastic! I do not test shorter time frame filters for my trades -- I find that becomes very complex and sometimes gives me too much information. But it is NOT a bad idea -- in fact, that can be a very powerful strategy -- for example, follow the trend on the daily chart but time an exit on the 1hr or even the 15min chart.

FXstreet Moderator (Oct 31, 2006 10:53:07 AM)
LAST QUESTION

cliffhanger (Oct 31, 2006 10:53:24 AM)
With regards to trading against the short term trend, is it advisable to sell on dips against the 1 hr trend. For instance the USD/CAD just dropped 50 pips against the 1 hr trend was going to enter short at 57 for 20 but didnt. Now it;s resting on the 62 and looking to bounce back towards the up trend

Rob Booker (Oct 31, 2006 10:54:16 AM)
At a time like that, it becomes a possible opportunity to trade WITH the trend -- as long as you have tested the system -- when it hits the 62. If I am in a buy trade on the GBPUSD, for example, I am not going to trade against that trend by taking a short term trade. So, for me, it's one or the other.

Rob Booker (Oct 31, 2006 10:54:47 AM)
I do want to mention that on my blog, http://www.piptopia.com, there is a podcast of this presentation, as well as a video-cast discussion with my trading partners and I about trend trading.

Rob Booker (Oct 31, 2006 10:55:13 AM)
Also, FXStreet.com has a new forum for discussing this presentation today.

Rob Booker (Oct 31, 2006 10:55:32 AM)
And if your question was not answered, I am happy to receive emails from you...send emails to rob@robbooker.com.

FXstreet Moderator (Oct 31, 2006 10:55:51 AM)
Thank you very much for that Rob.

FXstreet Moderator (Oct 31, 2006 10:56:01 AM)
and Thank you all for your participation.

FXstreet Moderator (Oct 31, 2006 10:56:10 AM)
To finish I would like to take the chance to introduce you the last new service on FXStreet.com: the Forex forum. If you want, take a look of what is on there please click in the link below: http://www.fxstreet.com/forum/index.php