About this Video

• Video Title: How To Trade TRENDLINES In UNDER 17 Minutes
• Channel: Tori Trades
• Speakers: Tori Trades
• Duration: 00:15:50

Introduction

This video provides a masterclass on using trendlines in trading. Tori Trades, a trader with over a decade of experience, explains how to draw accurate trendlines, using real-time market data and examples, and integrates them into trading strategies (bounce and breakout). The video covers both upward and downward trendlines and risk mitigation techniques.

Key Takeaways

1. Trendline Basics: Trendlines connect higher lows (upward) or lower highs (downward), indicating the direction and speed of price movement. They help identify trends and potential reversals.
2. Drawing Accurate Trendlines: The instructor uses a top-down analysis, starting with the highest timeframe (e.g., monthly) and working down to the chosen trading timeframe. She uses the "ray" tool in TradingView to draw lines extending indefinitely. Multiple trendlines are drawn, creating a "fan" effect.
3. Trading Strategies: Two strategies are presented: the "bounce" strategy (anticipating price bouncing off a trendline) and the "breakout" strategy (anticipating a trend reversal when price breaks through a trendline).
4. Risk Management: The video emphasizes risk management, suggesting a 1-2% risk per trade based on account size. Stop-loss orders are placed on the opposite side of the relevant trendline. Trailing stops are used to lock in profits as the price moves favorably.
5. Real-World Example: A real-world trade using the breakout strategy with crude oil is presented, demonstrating profit and risk management.

1. What specific tools and platform does Tori Trades use to draw trendlines, and why does she prefer the "ray" tool over the standard trendline tool?

Tori Trades uses the TradingView platform and its "ray" tool to draw trendlines. She prefers the "ray" tool because it allows her to draw a line extending indefinitely in one direction from two points (point A and point B), unlike the standard trendline tool which stops at a defined point B and doesn't allow for easy extension.

1. What are the key differences between the "bounce" and "breakout" strategies when trading trendlines?

The "bounce" strategy anticipates the price bouncing off a trendline, suggesting a continuation of the existing trend. The "breakout" strategy, Tori's favorite, anticipates a trend reversal when the price breaks through a trendline. Entries are timed differently; the bounce strategy enters at the trendline, while the breakout strategy enters after the price breaks the trendline.

1. How does Tori Trades determine the appropriate stop-loss level for a trade based on trendlines?

Tori Trades sets her stop-loss order on the opposite side of the relevant trendline. If the price doesn't bounce (bounce strategy) or break (breakout strategy) as anticipated, the stop-loss triggers, limiting potential losses. The exact stop-loss level is determined by the specific chart and risk tolerance (she suggests 1-2% of trading capital). In the example, the stop loss was a short distance from the trendline.

1. In the real-world crude oil example, what were the entry point, stop-loss, and take-profit levels, and what was the resulting profit?

In the real-world crude oil example, the entry point was based on the price breaking an upward trendline. The stop-loss was placed on the other side of the subsequent downward trendline. The take-profit was an area of support at 7226. The resulting profit was 27,600 with a 3.11 R. The exact prices at entry, stop-loss and take profit are not explicitly given numerically in the transcript.