Important aspects of using this strategy
A really important step of this strategy is to consider the number of data points you make your trendline from.
In this educational scenario, I’ve used thicker lines for the with more data points and dashed lines for that almost can’t be considered as a useful trend. As you can see, we have a very solid trendline, which makes it likely that some significant price-action will happen – eventually to the upside.
Another crucial aspect of the strategy (and every other strategy other than “hold and pray”) is to have a take-profit- and invalidation-area.
We always want to know why we’re in the position and why we’re out of the position. In this particular scenario, I’ve decided that a convincing break of the strong, trendline would be an invalidation for the trade. If the trendline breaks it doesn’t make sense for me to be in the position anymore, since the trade is solely based on the trendline.
Furthermore, the take-profit areas of the trade are based on historic resistance areas. The highest take-profit area is based on a very weak trendline, which is why I wouldn’t leave more than 10% of my initial position size to reach that.
This is an easy strategy for trading any asset, that anybody can use no matter how experienced.
Experienced traders also use this strategy. In my own opinion, simple strategies are the best; you’d be surprised how few indicators experienced traders use.
Feel free to ask any questions or share your thoughts about this strategy! 📝