Video tutorial: The essentials of tramline trading

In my first spread betting video tutorial, I explain some very simple chart-based ideas that can point you towards some nice entry and exit positions on trades.

In this tutorial, I look at an example from the gold market, and introduce you to the concept of tramline trading.

I explain:

• What a tramline is;
• How to draw tramlines;
• The smart way to play the markets;
• The importance of good money management rules;
• How to read lines of resistance and support.

Once you are comfortable with the concepts discussed in this video, take a look at my second tutorial on tramline trading: Advanced tramline trading

• Don’t miss my next trading insight. To receive all my spread betting blog posts by email, as soon as I’ve written them, just sign up here.

57 Responses

  1. 26/08/2011, Phil wrote

    Great video with clear explanation. Does anyone recognise the charting package John uses?

  2. 26/08/2011, Bruce Bridgewood wrote

    This was a really helpful video. Clear concise imformation, well articulated. I look forward to the series.

  3. 26/08/2011, Nick wrote

    You pointed out that a good place to buy is where the price hits the tramline – this is hindsight. Surely you can’t draw a first tramline until there are at least 3 points that line up – in many cases, the opportunity has then gone.

  4. 26/08/2011, Steve wrote

    Thanks John, I am still learning and this is most helpful addition to your emails. I would like to try spread betting but want to learn more first so look forward to the series.

  5. 26/08/2011, Mike wrote

    Very clear and helpful video – just one question regarding the drawing of the third (lower) tramline. You have drawn this after the breakdown in the price has occurred and like you say, the tramline passing through the new low is equidistant from what is now the middle tramline. If I wanted to draw this lower tramline BEFORE this price action had occurred would I just gauge the equidistance by eye or is there some facility on the spreadbetting platform to place an equidistant tramline? Thanks.

  6. 26/08/2011, David G. wrote

    Always found your emails uesful–the video tends to expand on your thinking I feel.I use a different platform to yours but it is very comprehensive and comparable .This video helped to sort a couple of questions that I had in mind–look forward to the next one.Thank you. David.

  7. 26/08/2011, chris wrote

    Thanks John, great tutorial looking forward to more.

  8. 26/08/2011, Rob wrote

    Probably the best introduction to tramlines/ trendlines I have seen so far. And I’ve seen a few! Excellent work, really looking forward to the detailed stuff.

  9. 26/08/2011, Peter wrote

    Very good, informative video presented in an informal and chatty style, maintaining attention (unlike the droning on many other presentations). John offers some of the best trading advice, with particular reference to gold, on the web; up-to-date and freely accessible. There are real possibilities here of healing burnt fingers!

  10. 26/08/2011, Keith wrote

    Thank you John, excellent presentational style. Refreshingly clear and straightforward, holds the viewers interest as there is no repetition, just tells us what we need to know. Looking forward to learning more, you’ve got my attention!

  11. 26/08/2011, Dudley wrote

    Excellent video John and simply explained. Would love to hear which charting package you use. Have followed your e.mails with interest and as a beginner have learnt a lot. Looking forward to the rest of your videos.

  12. 26/08/2011, Stevie wrote

    A very impressive video explanation just like your emails. A simple and logical way to look at trends, support & resistance, channels and breakouts. Excellent. For the benefit of fellow traders I can do this using charting on the IG Index platform.

  13. 26/08/2011, AA wrote

    interesting.do u have any results to show trades taken during this period?

  14. 26/08/2011, Richard wrote

    John

    Excellent video.

    What are the major charts you follow?

  15. 26/08/2011, jerry wrote

    Excellent Video. Nice style and delivery Very pertinent to today’s Aud/Jpy trend. But when is a breakout a breakout? Perhaps a subject for later videos? Keep up the good work

  16. 26/08/2011, Seb wrote

    Excellent addition to the already brillant MWT newsletter. I´ve been reading your emails since the beginning and have been developing my trading plan inspired on some of your methods.

    It´d be really great if you could specify a few details about the way you trade in both directions:

    1) Do you take the long trades on the third touch of the Tramline?
    2) Do you only take the longs on the actual touch, or do you enter with a buffer (e.g. 10 pips before the touch of the TL)
    3) On the break of the TL, what is your buffer? E.g do you take the short position once it broke the TL for 10 or 20 pips? (Surely you wouldn´t just go in a pip below the TL)

    Many thanks for the video, looking forward to the next one!
    Seb

  17. 26/08/2011, Geoff wrote

    Excellent I have been following and studying your pages for some time learning and using your investment rules and they all work very well. Pictures say a thousand words and you video has just made sense of it all in one go. More please I shall be watching and using them all.
    Like Peter, I too have burnt my fingers on gold, this would not have happened if I had used this charting technique.
    David and Phil’s comment on where to get that platform is something I would like to know too. Short Spreads?

  18. 26/08/2011, Shell wrote

    Great video, John – simple, straightforward and to the point. A minor improvement would have been an explanation of using tramlines on a downward trend, but I think I figured it out for myself thanks to your helpful information. Definitely looking forward to upcoming videos!

    FYI Phil, the charting package John used is Capital Spreads.

  19. 26/08/2011, Paul wrote

    Hi John, Enjoyed the video. Clear and to the point. Another useful tool for the tool box.
    Thank you for your regular mails.

  20. 26/08/2011, Mike Lees wrote

    I trade using trendlines, after looking for an upward trend with higher highs and higher lows or a downward trend with lower lows and lower highs. I trade on a breakout. Your video was excellent and it just confirms what I do. Look forward to your next tutorial.

  21. 26/08/2011, Daniel wrote

    Hello John,

    What is the software called that you are using?

    TIA
    Daniel

  22. 26/08/2011, LT wrote

    Excellent John, thank you. And as per one of the comments above, when are you able to FIRST reliably draw on your tramlines? IE in order to get in early….
    Looking forward to the more detailed videos.

  23. 26/08/2011, Tim wrote

    Is a written script of this video available? I am deaf and cannot follow the speaker.

  24. 26/08/2011, Karol Grzyb wrote

    I am very new to trading and every lesson is very useful for me, so thank you and I hope those classes make me wiser and more succesful.My wife would be happy:)
    Take care

  25. 26/08/2011, BEN wrote

    I have learned so much from you John, this is the icing on the cake
    Can’t wait for the advanced video(s). You’re a natural teacher.
    Many thanks.

  26. 26/08/2011, Percival wrote

    Very interesting video on Tramline Trading . Looking forward to the next one.

  27. 26/08/2011, Ken wrote

    Thanks for the very informative video John.
    I’ve been following your blog for some time now and I’ve often it hard to match your charts exactly to the charts I see using eSignal. The Symbols I use are XAU AO-FX. $UKX-FTSE. Why do you think this may be, and should I just draw the tramlines as I see them on my own chart. Finally could you say in your blogs which symbols you are using and, if this is allowed, the Trading/Charting platform you use. Thanks again for a super blog.

  28. 26/08/2011, AlanB wrote

    John,

    Absolutely fabulous lessons. I’ve followed you for a few months now and I am in awe. At last somebody that knows what they are talking about!!

    Please keep your insight coming, they are invaluable.

    Best Wishes

    AlanB

  29. 26/08/2011, Gary wrote

    Hello John
    Been following your e-mails since the start and have been a big help,thank you. The video was very well put easy to understand,do you have a premium service?Look forward to next chapter.
    Many thanks andGood luck.

  30. 26/08/2011, Mike wrote

    Excellent video. Eagerly awaiting more.

  31. 26/08/2011, Frank L wrote

    Well done John. It’s always nice when we can put the voice to the face. Your presentation is very clear and consise, without waffle.

  32. 26/08/2011, Paul.J wrote

    Great Video John, I really enjoyed it and look forward to watching the next one.
    I’m familiar with trend break trading but not the use of tramlines so I’m watching with interest and hopefully learning :-)

  33. 26/08/2011, Rich wrote

    Great clear video and instructions will add to my armoury look forward to next ones, Tradefair charts are the same as these by the way

    Rich

  34. 26/08/2011, KenN wrote

    John

    I’ve been enjoying your recent emails, so it’s nice to have the opportunity here to say thank you for those and for taking the time to produce this excellent video. Your tramline technique is a fascinating and elegant variation on trendline trading and well worth a further look, so I’m very much looking forward to your next video!

    KenN

  35. 26/08/2011, Tomahawx wrote

    Thank you, John. I am used to the support and resistance tramlines but your third “equidistant” line is a new idea to me. I’ll give it a try and look forward to the next video in your series.

  36. 26/08/2011, Tomahawx wrote

    Thank you, John. I am used to the support and resistance tramlines but your third “equidistant” line is a new idea to me. I’ll give it a try and look forward to the next video in your series.

  37. 27/08/2011, David H wrote

    Excellent John. Thank you. When you move on to the other tools you use, such as momentum can you show how you set these up on your charting software, and any parameters that you use?
    I look forward to your next videos.

  38. 27/08/2011, Charlie wrote

    Fantastic video. I have been following your recent Gold emails and this ties in perfectly. i am curious about waht might be a suitable time scale for these methods. I am very curious to know how to use Fibonacci extensions too! Many thanks.

  39. 27/08/2011, john wrote

    Can we get a download link for these as i’d like to be able to save them for reference?

  40. 27/08/2011, Charlie wrote

    John, your tutorial uses the 1 hour chart. Would you make trades on the 1 hour or would you zoom in to say 5 minute ticks?

  41. 27/08/2011, Tim2 wrote

    Thanks for the video John.

    Could you please give advice on where to set stops when entering a trade on a tramline break.

    David:- I believe the charts he is using are on the Capital Spreads platform.

  42. 27/08/2011, Earth-G wrote

    Thank you! Very helpful indeed!

  43. 28/08/2011, Debendranath Fernandez wrote

    Dear John C Burford ,
    I just saw ur video with alot of interes..
    My only question at this point is about the third trend line you draw on the gold chart ,you mention that it should be exactly the same distance from the first and second one,but when i measure the first line to the second and from the second one to the third one , actually it show me that the distance bettwen the second line and the third one is shorter than the distance bettwen the first line and the second one..Is that some thing important to consider?
    Thank you very much for your time..
    Im looking forward to look all your tutorial videos and learn from them..

  44. 28/08/2011, Debendranath Fernandez wrote

    Dear John C Burford ,
    I just saw ur video with alot of interes..
    My only question at this point is about the third trend line you draw on the gold chart ,you mention that it should be exactly the same distance from the first and second one,but when i measure the first line to the second and from the second one to the third one , actually it show me that the distance bettwen the second line and the third one is shorter than the distance bettwen the first line and the second one..Is that some thing important to consider?
    Thank you very much for your time..
    Im looking forward to look all your tutorial videos and learn from them..

  45. 28/08/2011, Trev wrote

    Hi John, really enjoyed the first video, nice and simple, look forward to number two

  46. 28/08/2011, Paul.J wrote

    Re: 42. Tim2

    A very good point Tim and one I am interested in myself because sometimes after the break the market can pop back up into the trend once again briefly before resuming the fall in this case.

    It would be interesting to know as what point to enter the short trade so as not to be shaken out, it’s happened to me!

    Thanks John.

  47. 29/08/2011, John wrote

    Excellent

  48. 29/08/2011, Alistair wrote

    I’ve followed your trader articles for Moneyweek since January, and the videos should help me get a better understanding.

    Of Elliott Wave, Fibonacci, and tramlines, I’ve found the latter most difficult to get a handle on, especially when you move to drawing more than 3 lines.

    Look forward to the next video when you’ll be looking at more advanced tramline techniques, and hope the videos culminate in looking at real time / recent situations where all of: EW, F, and T are used together to show identification of a trade and how it’s played out.

    Your series is very educational and I look forward to your articles and now this video series.

  49. 29/08/2011, PK wrote

    The charting software is from tradefair.com. I believe igindex is also switching to this charting software very soon.

  50. 29/08/2011, hlp wrote

    John. I wish you had sounded more convinced of your methods. The third tramline was drawn to a known low so why were you suprise it held ? Too basic, more advanced approach would be better.

  51. 31/08/2011, Einstein wrote

    The charts are included with all spread betting platforms,just set for one hour,candlesticks.

    John uses KISS Keep it simple stupid!

    Some of these tramlines can last for years!

    Test first with a demo account! Never risk more than you can afford to lose!

  52. 31/08/2011, Rob wrote

    A very interesting, clean and simple method of trading proving trading does not need to be made difficult by a plethora of indicators… thank you John.

    Anyone still wondering what charting software John is using, it is provided by spread betting companies that are directly owned or are white labels of the London Capital Group e.g. Tradefair, Saxospreads, t1pspreadbetting, Capital Spreads and possibly others. This information is usually displayed at the bottom of the home page of the spread betting company.

  53. 31/08/2011, rob wrote

    uncomplicated and easy to follow i am learning a lot from johns trades i look forward to future videos thanks john

  54. 05/09/2011, Robert Miranda wrote

    The video on tramline was very simple and useful.Many thanks.

  55. 12/09/2011, Lee Kennedy wrote

    Guys, it’s Capital Spreads charts that John is using (or at least theirs is identical to this).

  56. 23/09/2011, Mike wrote

    Very informative and very well delivered.

    Simple to follow and understand.

    Thank you.

    Regards,

    Mike.

  57. 30/09/2011, brian barnard wrote

    the support line is not there at the time of recommended buyingat 1730 , ditto selling at resistence — it is mainly looking backwards ! we only found the “lovely touch points” after the event.

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