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Knoxville

Breakout

Trend Trade

Examples

Advanced Version

Rob Booker

Version 2.0

December 27, 2014

http://tfl365.com/trendtrade

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INTRODUCTION

How To Use This Book

In the pages that follow I am going to show you 50

examples of breakout trend trades using Knoxville

Divergence. I want to show you how to spot an entry, how

to find a good profit target, where to place your stop.

Not every example will show you every element of the trade

– some charts will show you entries, some will show you

profit targets, some will show you stop loss placements. I

encourage you to build your own book of trade examples.

Ok, let’s get this started.

Part one of the book shows about 20 examples of the

standard Knoxville Breakout Trade. If you’re part of the $7

starter trend trade course, these examples will show you

almost every situation you will ever encounter.

Part two of this book is for those of you who are part of the

Advanced Trend Trade class. Here we cover examples of

trading pullbacks, for even tighter stops and wider profit

targets.

Enjoy the examples, and Happy Trading!

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PART ONE

How to Take the Breakout Trade

Set your Knoxville Divergence indicator for 30 candles

back, or at most 50 candles. This means that your charts will

now look for divergences that stretch over only 30 to 50

candles. (Refer to the videos in the course for more

information about this).

Then follow these two steps to take a trend trade:

1) Knoxville Divergence completes. It will show up on

your charts as a line above price or below price.

2) The breakout is the trade. We draw a line above the

highest candle in the setup (for a buy trade in a

rising market) and below the lowest candle (for a

sell trade in a falling market).

Those are the only two steps. Now let’s see some trades!

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S&P 500, 4 hour

This is the classic entry – bearish Knoxville Divergence,

which shows that the market is in a bullish trend, and then a

breakout above the highs. That breakout is the entry. Also

notice that before the breakout, the S&P had missed two

weekly pivots in a row.

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Oil (WTI), 4 hour

I like to place my stops behind a weekly pivot. I usually

choose either the most recent weekly pivot or the one before

that. I want to give my trade enough room to get going, but

not so much room that it can start to get away from me and

turn into a big loss.

Trend trading is the “easy money,” because you’re going

with the crowd. But if you hold onto a trend trade when the

market is making a big turn, you’re going to get killed. So a

tight stop is preferable. You can always get back in (at the

original entry price) if you stop out.

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GOLD, 4 hour

Look at the far left on this chart. We get bullish Knoxville

Divergence, which shows that we are falling fast and hard –

that’s a bearish trend.

*NOTE: I know it’s weird to say that we are looking at

BULLISH divergence and then taking a BEARISH view of

the market. But divergence can be used to find both market

turns and to show the best trend trades. It’s cool that way.

We sell on the first breakout, with a stop above the most

recent weekly pivot. We sell again on the next breakout

following divergence. And we place a new stop ON THE

ENTIRE POSITION above the newest weekly pivot. We

take a maximum of two trend trades. We stop out of the

whole position at a profit above the third weekly pivot.

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USD/JPY, 4 Hour

Can you see where we bought USD/JPY? You can see the

red divergence lines and the horizontal line – so by now,

you already know that we bought on the breakout.

*NOTE: You might wonder why we don’t buy on a

pullback. The answer is that we do buy on pullbacks, but

that’s another strategy – so keep that in mind. But more

important, we don’t always get a pullback in a strong trend.

(Shameless plug: get the pullback in the $27 Advanced

Course).

This trade stops out with a sweet profit when we drop and

hit the next week’s pivot.

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AMZN, 1 Hour

You have to look closely at this example. See how we buy

(the letter B on the right side) on the breakout following

divergence. We buy immediately on the breakout. We don’t

need to wait for a candle or bar to close.

Then we set our profit target at an area of previous

resistance – these are high probability profit targets. If the

financial instrument is making new all-time highs, then we

can’t use this method, of course. But we use it when we can.

The stop on a trade from the 60 minute chart goes below the

most recent daily pivot, or even the daily pivot from as

many as two or three days back.

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TWTR, 1 Hour

I like longer term charts (4 hour and higher) because we

don’t get involved in so much market chop. Here is an

example of market chop.

We sell – then we stop out. Then we place an order to sell

again at the ORIGINAL entry price, the same price as

before, and then we stop out again. Then we take a third

trade, and this time, the stop is wide enough, and the stock

is ready to take a dive.

One nice thing about using options with these trades is that

you could buy a butterfly put spread, or just buy a put, and

you would not have to worry about the stop-loss. You would

just be buying time.

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FB, 1 Hour

We want a trade quickly. If we don’t get a trade quickly,

then something has gone wrong with the trend. We should

see the divergence, and then within 20-30 candles MAX, we

should see the breakout.

*NOTE: If you’re trading options, you don’t want to take

your options trade until the breakout occurs – that way you

don’t get tricked into a trade.

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AUMN, 1 Hour

Want to trade penny stocks? No problem. This stock cranks

out some amazing wins (and so do many other penny

stocks). This is a 10% gain in a day.

The first two trade setups never open – we don’t get a

breakout within 20 candles. Then on the third divergence,

we get a breakout, and we set a profit target at the previous

high (it’s easy to find, it’s the high that was made on the

previous divergence). Of course, buying and selling penny

stocks carries a huge risk – slippage, wide spreads, etc. But

if you can handle your risk, you can find some great trades.

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TKMR, 1 Hour

Want to trade pharmaceutical stocks? Ok, crazy person, let’s

fire it up. Here we get two buy trades in quick succession,

and then we really blast off. We move from $11 to $20 in

just 6 days (or less). Then, right before earnings, we get out.

We would rather close out our trades before earnings. That’s

when we get pullbacks and all kinds of nastiness that we

simply don’t need.

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JCP, 1 Hour

Let’s say you want to trade fundamentals. And let’s say you

pick a stock that is just a dog. And you want to sell it.

Knoxville Divergence can help you with the entries. If you

have really strong conviction about a company (like JC

Penny), you can just keep selling on every divergence. You

might even break the rules and not even wait for a breakout

beyond the divergence.

*NOTE: Of course this assumes you’re doing your research

to find the best companies or worst companies, or financial

instruments. I don’t do much of this kind of research, but I

should. There are some huge wins when you the technicals

match up with the fundamentals.

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TSLA, 1 Hour

Another fundamentals trade. Here’s Tesla, a good company

with great prospects, and maybe you like it (I do). I know it

might not fit your description of a great company, but just

play along in my world for a moment.

So we buy on a breakout of divergence, and then what

happens? We stop out. FRUSTRATING!

But we can always get back in on the next move to the entry

price – don’t forget that just because a trend trade stops out,

doesn’t mean it won’t be a winner on the next trade. This

can happen a lot on tech stocks.

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TSLA, 1 Hour

What happens when you see a gap above the divergence?

This means that your preferred entry price has been missed

and you might be tempted to walk away from the trade.

Don’t. If you like the fundamentals, take the trade anyway.

Buy it at the next price you can get, and ride it to your

preferred profit target.

In these instances, you need to reduce the size of your trade

because your stop is going to be farther way. But what I find

is that these gap trades can be very profitable. Let’s take a

look at a few more of these.

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BIDU, 1 Hour

Here’s another example of a gap trade. It seems insane.

Who would buy a stock on a gap like this? I would. I would

definitely do it for two reasons:

1) Knoxville Divergence WORKS

2) Post earnings gaps usually have a little bit of juice

available to get you to the next level.

It’s a simple as that. The stop is wider, so you have to

reduce your trade size (as we mentioned in the last

example). But it’s a high probability trade.

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BIDU, 1 Hour

I like the examples where we show one or two stop-outs and

then a win. That’s how it works. I would, in fact, consider

taking EVERY first breakout with a half trade size, and then

the second with a half trade size, and then the third with a

larger full trade size. It’s sometimes the third breakout that

moves the best.

In this example, we buy, then stop out. Then we buy again,

then stop out. Then we buy again on a gap, and it runs

nicely upward. Then we get out before earnings with a win.

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YHOO, 1 Hour

What happens if you see a ton of Knoxville Divergences?

Well, first of all, it’s a sign that you are in a savage trend.

Eventually this trend will end (that’s part of the Trifecta

Course on Counter-Trend Trading). But for now, you want

to buy, and buy again, and buy again. Just keep moving

your stop, keep protecting your trade, and you will be just

fine.

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GBP/JPY, 15 Minute

The short-term charts can work really nicely. Just be ready

for lots of volatility. And be ready to sit in front of the charts

to babysit your trades. If you like action, you’re going to

love the next few pages because that’s what you’re going to

get.

In trade setup #1 above, we get NO TRADE because we

don’t see a breakout within 20-30 candles.

In trade setup #2, we get a traditional lovely Japanese Yen

currency pair trend trade. A really, really fast move lower.

You get in, you get out, Boom Shaka Laka!

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EUR/JPY, 15 Minute

Where do you put your stops if you don’t have pivots? If

you’re working with the 15 minute charts, or lower, you

don’t want to use the daily pivots for stop levels. So we

need to rely on regular support and resistance.

In this example, we simply place the stop below a near-term

recent low. That’s perfect.

If you have access to the intraday pivots on

TradingView.com (look under indicators > Marketplace

Add-Ons > Rob Booker), then you’re going to be able to

use the 1hr and the 4hr pivots for your stop placement.

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CAD/JPY, 5 Minute

By now you have noticed that I love the JPY currency pairs

for trend trades. They are for sure the best of all the

currency pairs.

In this example, I’ve got the intraday pivots on the chart.

The green lines are the 4hr pivots, and the red ones are the 8

hour pivots. (You can get these in TradingView.com charts,

in the MarketPlace Add-On section of the indicators list).

You can see that the CAD/JPY started to make us some

money, and then it turned around and went all the way to the

stop. This is a 25-pip stop out. Not bad.

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CHF/JPY, 5 Minute

We stop out twice here (that’s not uncommon on this pair –

I actually don’t ever trade this currency pair on the short-

term charts, but I wanted to show you an example of a

double loss).

The first stop-loss is under the most recent 4hr pivot (in

green). The next buy trade comes at the same level as the

first entry, but we can move the stop closer this time, to just

below the most recent 4hr pivot. Both trades stop out.

That’s gonna happen sometimes. (There was no third trade

here).

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NZD/JPY, 5 Minute

Sometimes we think that if we trade the short-term charts,

we get more action. But sometimes we watch and wait, and

then we don’t get a trade. In these two setups, we don’t get

the breakout we need in order to take a trade.

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AUD/USD, Daily

The longer term charts are the easiest to trade. But the

longer term charts will produce way fewer trades.

Some financial instruments will only produce one trade per

year on the daily charts. And that’s fine – there are plenty of

financial instruments to choose from.

In this example, the Australian Dollar prints bearish

divergence, and then we draw a line across the top of the

candle that finished the divergence line. Then we buy on a

break above that line.

*NOTE: Once again, don’t forget, we are buying on

BEARISH divergence. Watch the course lessons again if

you need to – it’s a little bit odd, but it’s what we do.

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WFC, Daily

It might seem boring to trade a bank stock like Wells Fargo.

But these can move nicely, with less volatility than tech

stocks or commodities.

In this example, we stop out on the first trade, but then trade

the stock again on the next move to our entry price. The

nice thing about trading a bank stock (or a Dow stock) is

that there are usually lots of wonderful old support and

resistance levels to pick as profit targets.

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INTERMISSION

I’ve showed you 20 or more examples of the standard trend

trade. It can be a wonderful setup and can produce hundreds

of trades per year for you. Pick your favorite financial

instrument and do some testing to see how it works. Then

start trading with a small trade size and build your

confidence.

In the next section, we’re going to talk about the pullback

trade. Let’s do that right now.

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A FEW WORDS ABOUT THE STANDARD

TREND TRADE

For those of you in the advanced class, I have a tip about

making the standard trend trade super powerful:

Look at how steep the divergence line is. If it is very sharply

angled, I call that “Class C” divergence, and it is PRIME

TREND TRADING MATERIAL. Increase your trade size

on these trades, or ride them longer.

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PART TWO

The Pullback Trades

The pullback trend trade is designed to avoid stopping out

frequently and to also have a larger profit target per trade. It

has more moving parts – although it’s still very easy to set

up.

Here are the steps:

1) Wait for a missed pivot (different time frame charts

require different types of missed pivots, and we’ll

cover that below),

2) Then after the pivot has been missed, wait for

divergence to form

3) Then trade in the direction of the missed pivot (the

trend direction)

Now, let’s cover a bunch of examples so you can see how

this works.

*NOTE: You might find it too confusing to trade BOTH the

standard trend trade and the advanced trend trade (they can

start to conflict with each other). In this case, JUST TRADE

THE ADVANCED VERSION. It’s better.

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GBP/JPY, 1 Hour

Here’s a simple example of how the pullback trade works.

1) We’re on the 1 hour chart, so we are going to watch

for a missed daily pivot,

2) We miss two daily pivots (just one would be fine,

but we miss two)

3) *If you don’t know what a missed daily pivot is,

refer to the lessons in your course online,

4) We then wait for a pullback, and bullish divergence,

and we buy as soon as we see that divergence.

That’s the trade entry. Let’s look at another example.

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Oil, 1 Hour

Okay, I admit this looks totally weird. Oil rises fast enough

to miss its daily pivot.

Then, 7 days later, after a substantial drop, it prints bullish

Knoxville Divergence. That’s enough for a buy trade. We

buy Oil immediately when that divergence is printed.

Some things to note: The divergence can come up to 10

days after the missed daily pivot (if you’re using a 1 hour

chart). If you’re using a 4 hour chart, and weekly pivots,

then you can wait up to 10 weeks for the divergence to

appear.

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JCP, 15 Minute

When trading stocks, use the 15 minute chart in

combination with weekly or daily pivots (there are other

combinations that we will talk about later on).

We see two missed pivots in a row, and then 9 days later, we

see bearish Knoxville Divergence form. Then we sell

immediately on the formation of that divergence.

*NOTE: Sometimes the pullback is so deep that it pulls all

the way back into the same area as the missed pivots. That’s

totally normal, and absolutely ok.

Let’s keep going.

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LNKD, 4 Hour

When trading from the 4 hour chart on stocks, use the

monthly pivots. This is really long term trading for some of

you, but they can be the biggest wins, even if they look

weird.

We get three missed monthly pivots in a row (the circled

purple lines on the chart). Then 9 months later (I told you

this was long term), the 4 hour chart prints Bullish

Knoxville Divergence. That means we buy immediately.

The pullback is DEEP. It is so deep you might say, “Rob, a

brand new bearish trend has formed.” But the FACT is that

there are still a lot of long term traders (like institutions)

still holding LNKD and they are buying on dips.

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USD/JPY, 4 Hour

(These pullback trades can look bizarre. I know.)

On a 4 Hour currency pair, you want to use the weekly

pivots. They are colored green on my chart.

The first part of the trade is when the USD/JPY missed a

weekly pivot on a strong move upward.

Then, just a week later (actually even less), the 4 Hour chart

prints bullish divergence. We buy right away.

I love JPY currency pairs for this trade. They trend so

nicely.

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ES, 4 Hour

On an index, if you’re trading the 4 hour chart, use the

weekly pivots.

We miss a weekly pivot at the upper left area of the chart.

Then, 7 weeks later, we see bullish Knoxville Divergence

on the 4 hour chart. We buy.

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ES, 4 Hour

Let’s talk about where you put your stop on the trade.

In this example, the S&P futures miss a weekly pivot – and

then just a few weeks later we see bearish divergence print

on the chart. In this case, we set up a sell trade – and take an

immediate sell as soon as the first bearish Knoxville

Divergence shows up.

But then price continues upward and we stop out just above

the highs.

That’s a quick stop, no pain. But – we could have avoided

this trade completely. Take a look at the next chart.

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ES, 4 Hour

First, let me tell you an important filter for these trades:

Two missed pivots in a row is a sign of a very strong

developing trend. Don’t mess with this! Don’t trade

against it!

In this example, moving from left to right:

1) We miss a weekly pivot as price falls, so we start

thinking about setting up a sell trade,

2) Price begins to rise on the pullback, but misses two

weekly pivots in a row,

3) So we IGNORE the pullback trade later on.

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ES, 15 Minute

On the 15 minute chart, we can use the daily pivots on the

ES. By the way, the ES can be a totally frustrating

experience – in any kind of trading – as you are competing

with the most sophisticated traders and robots in the world.

In this example, we miss a daily pivot as price rises.

Then we get three bullish Knoxville Divergences, but the

first two trades stop out. FRUSTRATING!!!

Can we avoid those stop outs? Yes, we can. Let’s move on

to the next chart and I will show you how.

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ES, 15 Minute

On the ES, and on super trendy stocks, you are going to

want to WAIT before you jump into a pullback trade. This

will save you thousands and thousands of dollars in losses.

Instead of buying immediately, we draw a resistance line

above price – we simply find a short-term spike upward

inside of the divergence area, and then place an order to buy

only if price crosses above this line. Watch the videos in

your course online for more information about this – and

check out the next few examples.

*NOTE: This method will reduce the number of trades, and

get you in at a later price, but it will save you a ton of

problems.

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TWTR, 15 Minute

When trading stocks on the 15 minute charts, use the

weekly pivots.

We miss a weekly pivot as price falls, so we want to set up a

sell trade. Then earnings are released and price ROCKETS

upward – even creating a gap. WOW!

Then price creates bearish Knoxville Divergence, and we

draw a support line under the gap. Under that line, we want

to sell the holy heck out of Twitter. Trades like this post-

earnings can be huge winners. And waiting for price to

break the support line doesn’t cost us much at all.

Watch the videos in your course online for more practice in

drawing these support line entries.

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AUD/JPY, 15 Minute

When trading currencies on the 15 minute charts, use the

daily pivots.

We miss two daily pivots in a row – a very strong indication

that a bullish trend is developing (and that it will continue).

Then just a couple of days later, we see bullish Knoxville

Divergence. We don’t buy immediately, however – we wait.

Instead, we buy above a resistance line. And this means that

it takes TIME for the trade to develop.

(This trade is a huge win, by the way, and it’s okay that we

are going to have a wider stop on a trade like this).

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AUD/JPY, 5 Minute

When trading currencies on the 5 minute charts, use the 8-

hour intraday pivots. (You can get these on

TradingView.com under Indicators > MarketPlace Add-Ons

> Rob Booker).

We see the AUD/JPY miss an 8-hour pivot. I apologize for

the really small candles but I had to fit a lot of stuff into one

chart.

In this example, there is no way to draw a neat horizontal

resistance level to act as the entry line. So instead, we draw

a trendline across the tops of the candles. We prefer a

horizontal line, but the trendline will do as a second option.

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EUR/CAD, 5 Minute

When trading currencies on the 5 minute charts, use the 8-

hour intraday pivots.

We’ve seen so many deep pullbacks that sometimes it

surprises us to see a pullback that doesn’t even return all the

way down to the missed pivot. But in this case, just a few

hours after missing the intraday pivot, we see bullish

Knoxville Divergence print. And we don’t have a great area

for a horizontal entry line, so we use a trendline.

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GBP/NZD, 5 Minute

Let’s talk about profit targets.

This can be an amazing currency pair to trend trade from the

short term charts.

We miss an 8-hour intraday pivot. We see bullish Knoxville

Divergence. We buy on a break above horizontal resistance.

Our first target is any 8 hour pivot that is above our entry.

Our extended target is the recent high that was made before

the big drop.

Any support or resistance level is always an acceptable

profit target. We can also trail our stops using pivots, just

like we do in the standard trend trade.

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GBP/JPY, 5 Minute

This is an example of a really, really good trade –

everything setups up perfectly.

The only problem is that we don’t reach our extended profit

target. And not just that – we don’t even reach the nearest

intraday pivot. For those of you who trade FX, you will

notice that this 5 minute trade, however, does move 100

pips in your favor. That’s 100 pips and NO DRAWDOWN.

I encourage you to find your own ways to scale out of trades

as they move in your favor.

You can also use the trailing stop method, and as soon as

price reverses back above an intraday pivot, you can exit

with your profit. This would be a nice win.

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GBP/NZD, Daily

If you are watching the daily charts, you should consider

using the monthly pivots.

The problem is that if you miss a monthly pivot – as we do

here – you might not get the divergence you need to take a

trade. You have two options:

1) Draw a trendline and just trade a break lower below

that trendline (and use our stops above the highs and

extended target)

2) Move to the 4 Hour chart and look for bearish

divergence there for the trade.

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IBM, Daily

Here’s a boring stock – IBM. It misses a monthly pivot on

the daily chart, and so we wait and watch and draw a

trendline above price as it pulls back. This is simple. It is

easy to do. It requires looking at the chart only once per day.

And it turns into a huge win.

I implore you to look for the simplest ways to implement

these methods. Using the daily chart is a way to do that.

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QLD, 4 Hour

If you are watching anything that is index-related on the 4

Hour chart, you will want to use the monthly pivots.

By this time, you can pretty much put the elements of the

trade together on your own.

*NOTE: When looking at longer term charts – anything

over the 4 hour time frame – you are going to get way fewer

trades. It’s okay, because the trades are huge wins.

Page 48

QQQ, 4 Hour

If you are watching anything that is index-related on the 4

Hour chart, you will want to use the monthly pivots.

Sometimes your extended profit target is an impossible

dream. And that’s okay – just forget about and use the first

profit target instead.

*NOTE: This is pretty much the dumbest trade ever. This is

a sell trade on the QQQ during the greatest bull market in

10 years. But it still gets to its first target.

Page 49

IWM, 4 Hour

I wanted to find more examples of trades that look stupid,

like selling in the middle of a bull market. Here’s one of

those examples.

We get a missed monthly pivot, then we get divergence, and

an entry below a support level. This trade stops out – but

then all of the sudden, drops anyway. This just goes to show

that sometimes we are going to get everything right, and

still stop out on our trade anyway.

Let’s look at one more example of selling into a bull

market.

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DLTR, 15 Minute

This is an insane trade.

We use the weekly pivots on a stock when we are looking at

the 15 minute chart.

We miss a weekly pivot as we fall. But if you look back on

this chart, it has been on a SAVAGE GIANT RUN

UPWARD. There is no way we would be viewed as

intelligent for selling this stock. But we get bearish

Knoxville Divergence, and we draw a trendline, and then

we get a trendline break as the stock moves sideways.

Even if we sell, it’s a quick stop out. And if we had used a

horizontal level of support to get into the trade, it never

would have opened.

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CONCLUSION

I had a lot of fun teaching you these systems.

Your challenge is to find the right mix of financial

instruments and time frames to trade.

I exhort you to focus on one or two financial instruments

and one time frame chart. This focus will allow you to

become an expert in doing one thing really well.

If you want more help getting your mind right for trading,

and learning how to focus your trading to make way more

profits, here are my free 16 Rules of Trading:

https://robbooker.clickfunnels.com/16-rules-ebook

Just click that link to get a copy of the ebook with my

trading rules, and you’ll be invited to the $27 Millionaire

Trader Mindset Course.

If you want to just simply jump over to the course, here’s

the order page:

https://robbooker.clickfunnels.com/launch-page-4