Best Trend Line Trading Strategy (Surprising)

you've heard of trend lines but you probably haven't heard of the surprising ways that professional Traders at worldclass trading firms use them in this video you'll learn the number one little-known strategy that combines three trendline techniques for maximum trading results I'm Mike Bella Fury and we're one of the top proprietary trading firms located in New York City and proud to develop numer 7 and even e figure per year Traders watch take notes and learn so you can grow trading account we're really excited to dive in today because these are opportunities that work they work in

a couple different ways and they work for a couple of very specific reasons which we're about to cover we really had a ton of fun putting this video together because we worked with the trader on the desk who has this really great reputation for trading trend lines but he didn't really always have that reputation in fact kind of early on in his trading career this Trader was was working to establish his consistency you know the first goal on our desk is always consistency right the first goal on our desk is always consistency so this Trader

was particularly notorious for adding lines adding trend lines to his charts so often times when we' be talking about an idea you'd look over at his chart and and it would look something like this he joked that his philosophy was if you draw enough lines eventually some of them will work but kind of this interesting thing happen happened he started to study and analyze every single line he put on his charts and he learned which ones made the most sense to him and which ones responded the right way so one day he put up the

biggest day of his career a couple days later he put up an even bigger day when we kind of asked him to share what he was doing that worked so well he jokingly kind of laughed and he goes yeah I'm trading trend lines in reality he'd been studying and getting better and and seeing what worked and what didn't figuring out why that work and and all the everything started to pay off and he was able to explain exactly what he meant by that trend line break and he was willing to share with us which led

us to have this presentation Share three of his best trendline trading strategies we can't get into the strategies without properly identifying an important trend line and what he's shared and what we're using here is a three-step process to stack the edges for Str iies that we'll go into next so not all lines are created equal so let's start by qualifying a really good trend line to start there needs to be a distinct point where the trend line starts where the trend line where it makes sense for the trend line to start from so we can't

just look at a chart and draw trend lines on it there has to be a starting point where it would make sense that the stock stock or the product that we're trading starts to trend from on our desk this usually is a fundamental change in a catalyst but it can also be a shift in the setup like this distinct shift in the price action that's what we call that shift in the setup it's anytime that the way the traders that are participating in the stock or the Futures product anytime that that there's a distinct change

once we have that distinct in point where a trend line could start from we take a step back we zoom out and we make sure we're looking at at least 60 bars on any time frame so 60 candles 60 bars whatever you want to call it if you're using one minute bars that's about an hour of time two minute bars you're looking at two hours of time five minute bars you're looking at five hours 15 minute bars you're looking at 15 hours or about three trading days uh 60-minute bars you're looking at 60 hours so

about 10 days you can expand this out as needed as your time frames expand but these are actually really common ways you'll see charts set up on the desk anyway so that's why we need to see that 60 bar minimum on any time frame that you're trading and these are actually pretty interchangeable on the time frame so if you just take 60 bars you can kind of get a good sense of the trend lines so these tend to be the same across any product traded also so so that 60 bars can cover just about any

product then it gets way easier for us to draw the trend lines third we connect the first two major points so the first two major points tend to be the first two distinct higher lows for a long an UPS sloping trend line like we have or distinct lower highs for a Downs sloping trend line you'll notice we were talking about counter Trend points initially as we're identifying a new trend most of the time so when we're thinking about a trend line we're thinking about that counter Trend initially so that higher high and then but more

importantly those higher lows now this is the part that gets most people hung up and and some people even really heed the thing we're about to talk about there are lots of arguments about Wicks versus bodies here's a general guide we use on the desk if the first candle that initial candle that started this whole thing off it if if it had a wick we will connect the Wicks we will use the Wicks if it didn't we'll use the bodies of the candle so the wick versus the body is this discussion that centers around what

our expectations are and we ground our expectations with which data with with whatever data is actually there when we look at that initial candle that all this is starting from was it a wick or was it a body this is just telling us information about how the stock is trading so now we can press into the three strategies that that we can use but I kind of want to go back because people do get so hung up they draw trend lines that look great but then the price action doesn't respond to the trend lines in

the way they expect so the trend line just doesn't work and they say trendline trading doesn't work so let's take a step and let's set the stage on how to address this trendline trading is not about what is happening it's not magical that a trend line is happening and oh it's going to test that trend line and and that's really going to work every time that's not what's happening why it's happening and who is making it happen is going to identify what a trend line is and if the trend line will work what a trend

line is is it's a line that measures a trend the trend is created by why something is happening and who is creating that so an identifiable series of higher highs and again that most important higher lows that's created by Traders why is it created who's creating it those are the stories of trend lines not what is happening the two things that we notied that can create the most consistent trend lines are passive buy programs for for Longs or passive sell programs for a short and it's really driven by participants that are being a little bit

moderately price sensitive we have an office and and down the street from our office there a ton of stores right the Shoppers that shop in the stores on Fifth Avenue are not the people that are price sensitive the price sensitive Traders are the Trad ERS shopping at like Macy's or Dillards or or Nordstrom you know somebody that wants good prices and really decent quality they're not Bargain Bin shopping but they're not paying up too much either so this concept can really quickly describe the trend lines we're actually looking for when the price comes in the

buyers are going to act appropriately there will be a little bit of extra demand when prices go up they're going to have some extra Supply they're not willing to pay up and Chase for it but when it comes in they're willing to buy they're not going to buy Super aggressively and run it higher either the trend is going to remain as long as the same participants are acting in the same manner why we had to set the stage was because this little insight was really the Breakthrough moment that led that Trader to have that breakout

day and then have that follow-up breakout day later it's also the Insight that is going to lead to the next three trendline trades we're about to talk about so the first one is just very straightforward it's Trend trading off a trend line this is probably the most common use of a trade is when there's a clear Trend established and we'll start by talking about a failed breakout right something tried to breakout and then tried again and failed and that's where the new trend was established we identified that range it broke out it came back in

and then confirmed the failed breakout once it confirmed the failed breakout that is where that new trend potentially started from then we get to come in and we get a distinct second point that second lower high we all of a sudden have that trend line that we can connect to and then the key is just to go with it because nothing has changed something change giving us this setup to begin with that failed breakout but then that trend line just keeps walking down and down and down so our expectations for that trade is essentially that

Traders are going to short every time it comes up to that trend line they're going to continue to short continue to short continue to short that provides us with the trading opportunities we're looking for what's really driving this the why behind it is because algorithms aren't people somebody puts on a sell program that's going to passively sell up into moves with a very distinct end to that program that sell programs actually an elgo that is going to lose on the last one it's going to put on that trade every time that opportunity gets presented take

it off when when it when it's moves favorably but every time that happens it's going to put that trade on until it stops working it's going to lose on the last one but that's fine it won on all the other ones so it's really going to think at the end of the day about all of those trades as one whole trade it's not going to care about that last one because it's just going to lump it in with all the other p&l the second trading strategy that we're going to have here is range trading off

a trend line so we're going to find an intraday range move with the trend like you know a lot of times this is a pattern that will happen in low Floats or something that's pull back intraday but it's actually very very strong it's a pattern we call the post and flag there's this unique twist to it um that we're going to cover and it was one of those kind of supplemental scalps that was added by our Trader who made a living by drawing trend lines on the chart so he observed that one of his best

trend line trades was not actually the line he had drawn but the line that generally followed the price action so what happened was he stopped predicting he saw that initial flag and then he would allow the price action to occur and he didn't actually have to predict what was going to happen the price action was predicting what was going to happen for him so he traded based on that so he' be in from really good prices but then he notice he can just basically flag trade that so he'd buy in and sell up Buy in

sell up Buy in sell up it gave him the room to really just trade the range stocks are in range most of the time even when they're trending so if they're trending to the upside a lot of times they're trending in a Range we can't trade everything this way but when we can identify it and really when the stock identifies it for us which a lot of times occurs from a very specific setup where there's a distinct change and then that first higher low gets put in afterwards we have those two connecting spots and then

we can just look for the price action to follow that along and it'll trade up and down and give us enough volatility that we can range trade a trend line what we don't want to get into and what we have to avoid is when we're trading a range that's actually a consolidation that's one little hiccup on this because if it goes up and stops range trading and goes into a consolidation remember the difference between a range and a consolidation is a range can last as long as it wants to a consolidation is simply a range

with a pending resolution present so a lot of times that's a distinct change in the price action that's trading within a range that's what we call a consolidation that distinct change suggests that there is a pending resolution so we don't R we don't cons take a consolidation trade off of trend lines we take range trades off of trend lines lines our third and final one is one that is a little bit different but it's so effective and the trader that kind of brought us these strategies that that kind of worked with us on these strategies

I actually asked him to if we could cut it and he said absolutely not this is one that is so important to share you really want to make sure that you're covering it anchored vwap as a trend line so let's think about what we think of with most trend lines they use price they really focus just on price the price action and the price action defines the trend line anchored vwap is a trend line incorporating price from that defined moment that we talked about earlier but then it also layers on volume so when we were

talking about this when we were brainstorming this meeting the entire idea here is that anchored vwap can be this really effective trend line when used appropriately and what's a what's a way to use it appropriately a day two with resistance becoming support on a first move lower into a two-day vop this is really just a classic day two setup and the concept remains exactly the same as if we draw the line on the chart we are not drawing the trend line the vwap from that key point which is that day one so the day one

has to have a big Catalyst it has to have a big move it has to have big volume the price action from that first day vwap can guide us when we look at the anchored vwap from that first day it's actually a super effective strategy because all you're doing is buying into that trend line very distinct stop below once the price action moves away and you're moving your stop up as the price action works with you all right so we've talked about those three but there's actually a fourth and it's my favorite and there was

a really good example of it the other day and it was so clear clear to all of us when we were talking about it we felt like we really needed to share it so the number four strategy that you can use for trendline trading that you'll see Traders on the desk use all the time is trend line break and retest so this is when you have a trend line it breaks and it retests this truly is a counter Trend trade but it's a big moment that trendline break is always a big moment but it's so

frustrating sometimes to trade a distinct trend line break because what can happen so often is that it'll retest the back side of the trend line and if you're trending the trading the trend line break and your stop is the trend line sometimes you'll even get stopped out so you're going to let the trend line break happen then let it test the backside of the trend line and then you can take that easy scalp because it was kind of the last attempt of those traders that were trading with the trend once that trend line is broken

and then it test and it can't get back up with the trend line they kind of know the trade's over that gives us a really good scalp you know that backside of the trend line trade it isn't for anyone but it's a scalp I really like waiting for and when we were brainstorming this traders in the desk really liked that concept so let's cover a couple key takeaways when you start scalping or trading off of trend lines you kind of might start trying to take trend line trades on their own right we just talked about

those breaks of trend lines and you might think about trend line trades in isolation but there are just so many variables associated with those that it kind of becomes super important to understand what trade you're actually making and then use the trend line break as an add-on to that trade like as an extra kicker for taking that trade so we're not saying replace your trading with trend lines what we're saying is use the trend lines as a check in your favor for for a trade because this Stacks the odds in your favor even more we

like to adapt our trading a little bit to different market conditions and for some reason trend lines just tend to work better when there are more participants so you want to make sure that the stocks in play to start or the product that you're playing is in in play to start and then the little adjustments that you're going to make are really going to matter more on things that are in play otherwise you're going to have more false trend line breaks the more people that are in that are trading something in play the more in

play a stock is or our product is when you get that trend line to set up more eyes are on that it's going to work better simply because there are more people thinking and acting in the same way that you are so when you can find really good Inplay products in really good Inplay stocks they tend to respect trend lines a little bit better another thing we can't can't move on without covering is how do you exit on trend lines well a general principle here is to scalp half initially and then draw a new trend

line we call this strategy just a very simple half and Trail so what you're going to do is You're Going to exit the first half on a really distinct move and then you're going to Trail based on that new trend line when a trend line breaks all it's typically doing is establishing a new trend so just Trail along with the new trend again when you're defining your trend lines think about the actual trade that's setting up within that trend line trade that you're seeing if you're looking to learn more about the types of Trades to

make and some of the time frames you can use to guide your own expectations for how fast the trade will work and then more importantly what that trade might lead to you can check out this video and and make sure you're going through all five steps steps they really may seem fundamental but again when we lay a really good foundation we have something great to build on so you're an active Trader not doing as well as you want not doing as well as you deserve and you just can't figure out why you can't become profitable

no matter how hard to try well let me show you why this is your competition the trader in this room this room right here is full of elite Traders some of whom are making seven and even eight figures a year in fact our top guys have made nearly 20 million each in net trading profits in a single year let's head to my office so I can share more so you're probably used to seeing videos of lavish Trader Lifestyles trading gurus trading off of a laptop for an hour a day heck maybe even 15 minutes a

day and then them relaxing on some secluded beach for the rest of the day well all I can tell you is that our Traders train like pro athletes they live and breathe the markets and are continually working on their trading skills because at our firm that's what we found it really takes to make it in this game I'm Mike Bella Fury co-founder and managing partner of S&B Capital One of the world's top proprietary trading firms located in Midtown Manhattan and we're always looking for trading talent to hire and develop and not just to trade in-house

on our desk but also to trade from their own home entirely using our firm's capital and we have numerous Traders doing just that allowing them to make upwards of seven figures trading the firm's Capital without risking their own money but to even get a shot at something like that you need to have the right training that's why we're doing a new free online presentation in which we share how you can get an interview with SMB to become an in-house a remote Trader trading firm Capital without risking yours and getting access to all of our firm's

coaching and resource sources and the best part you don't have to be a profitable Trader yet in fact we prefer to mold profitable Traders with our methods and our techniques that's why we have just three simple criteria that can earn anyone in interview we're looking for highly ambitious and determined traders who fit our culture first and foremost so if you believe that could be you sign up for the free 1hour online presentation by clicking the link that's in your top right corner of your screen now