ABC Trend trading strategy is a great trading tool!
I enter the position after turn C is finished!
I put Stop lose under point C when trading up trend.
I put Stop lose order above point C when trading down trend.
For target I use money managment 1:2,1:3.
If target is not touched and turn B is over, must flat the position.
1-2-3 trading strategy is breakthrough strategy. But ABC TREND trading strategy is to find entry into position near support or resistance line by using small time-frame to find bounce. Wave from C to B is the larger and we expect next B to be higher high if it's UP trend.Or lower low if it's down trend. Target could be money managment 1:2 or 1:3, or up-trend resistance line. But if we see that turn B is over and it didn't touch neither MM, or up-trend resistance line then we must close the position no mater what!
It is all visual, there is nothing to calculate!
Compare B1 and B2 in UP TREND (B1 is high but B2 is higher high then B1)
Compare C1 and C2 in UP TREND (C1 is low but C2 is higher low then C1)
*when we have UP trend there is a rule:
*when there is DOWN trend rule is :
If you compare price of B1 related to B2 you will find equation that B1 price is greater ,higher or larger price number then B2 price when we have down trend and it is reverse equation for an UP-trend.
If rule is broken then trend is over! (see larger time frame to get clue what is going on, zoom out)
You can see that trend is all about action and reaction.
Action is larger move then reaction when we have trend!
To find out more about predicting action and reaction you can read topic:" PREDICT REACTION "
To find a spot where action can start you can use Fibonacci retracements!
When you draw a line always start to draw a line from A and recline to C1 .
That would be slow trend line!
Then draw a line from C1 and recline to C2. That would be faster trend line.
Next draw a line from C2 and recline to C3. That would be even faster trend line, etc.
If it is UP trend then those lines would be called trend support lines and if it is DOWN trend then
those lines would be called trend resistance lines.
Every trend has four phases so I recommend to read topic "TREND BEHAVIOR"
Turn C is called MOF!
MOF Definition is Money On the Floor.
The lowest risk is on C2 turn!
You can use indicators for confirmation only!
You can use stochastic for crossover in area 20 and 80 just to confirm reversal, but first you must wait
for price to come into sector of rotation. Further you can use MACD for divergence as early sign of trend ending. Then you can use exponential moving average to see average price in the market trend, and Bollinger Bands for volatility.
I think that this would be enough because it ain't good if you complicate to much.
Sector of rotation is place where price on the market will turn in the other direction (change the course)!
ABC trading analysis EXAMPLE! on .
