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TRADING WITH THE TREND

Here is a powerful concept we all know
Thats trading with the trend

This works with all time frames

So we're finding the longer term trend
And then using the shorter term trend to enter the trade

Moving to the lower time frame
Can greatly reduce the initial risk on the trade

You could use this for moving from the weekly chart to daily chart
From the hourly to the 1/2 hourly

Basically whateever time frames you wanted to try
It will work !!!!

We will look at moving from a daily time frame to an hourly

DAILY CHART

This daily chart of Cotton with the 10-8 bands shows a strong downtrend
So if we were looking to get short with the trend

What could we do to try and hop aboard
We could move down a time frame and look for an entry point on the hourly

All trends no matter how strong will have rallies against the main trend

This chart of Cotton was in such a strong downtrend
The rallies were minor rallies - not showing much of a rally on the daily chart

HOURLY CHART

Here is an hourly chart that goes back 40 days
There would have been a number of 10-8 band 2 bar buys and sell on this chart

Since we knew the daily chart was in a strong downtrend
We would skip all the buy signals if trading only with the larger trend
And only take sell signals on the chart

What would that do to our winning percentage
It should make the number of winners higher

Because we are filtering out some losing trades
By going with the trend - that is a higher time frame

Here is a look at the last 16 days of trading on the houlry chart
You can see there would have been a number of 10-8 bands 2 bar sell signal

Here is the last eight trading days on the hourly chart
Cotton rallied and then put in a clear 2 bar sell signal just before the 23rd

We would have went short around 47
With a stop if wrong around 49

The market has moved to 44 since that sell signal
if you stick with the trend this should work time and again

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