Alright then,
I have decided to make a more "newbie" friendly version. There are a few changes to the original, but mainly the (word)/(important info) ratio will be greatly reduced.
The Method
Pivot Points alternate between High Pivots and Low Pivots. In other words, you can't have 2 High Pivots or 2 Low Pivots in a row. When a LOW pivot point appears like the one featured below, you will then go into HIGH pivot mode where you are watching for a high pivot. This entails looking at the high values from then on. When you find the high values are no longer increasing, this should be a red flag that it could POTENTIALLY be a high pivot. You know it is a High Pivot when and if the magic number is surpassed. If it is indeed a high pivot, then you go into LOW pivot mode, where you look at the lows using the same process.
Stop Loss
NOTE: I do not use Take Profits. Please do not ask me what my Take Profit is.
I have decided to make a more "newbie" friendly version. There are a few changes to the original, but mainly the (word)/(important info) ratio will be greatly reduced.
The Method
- Set up a Daily chart with candlesticks. Also, set an RSI(10).
- Look for Pivot Points. What are Pivot Points? Please see the document below.
- Suppose we have a Low Pivot Point, thus creating a minimum. Look at the high of the minimum candle. Write this number down.
- Add the spread to this number. If you do not know what spread is, please add 3 pips. This is your "magic number". Why is it magical? Because when it is surpassed you must look at the scenarios below to see if you buy.
The Scenarios
NOTE: These are BUY scenarios for when a Low Pivot has just occurred and the "magic number" has been surpassed.
- RSI > 50. Slope is up = BUY
- RSI > 40 AND JUST CAME from 30. Slope is up = BUY
- Otherwise, don't do anything.
NOTE: These are SELL scenarios for when a High Pivot has just occurred and the "magic number" has been surpassed.
- RSI < 50. Slope is down = SELL
- RSI < 60 AND JUST CAME from 70. Slope is down = SELL
- Otherwise, don't do anything.
NOTE: IF the RSI has not confirmed in more than 3 days from the pivot, do not act upon the trade.
A Note about Pivot PointsPivot Points alternate between High Pivots and Low Pivots. In other words, you can't have 2 High Pivots or 2 Low Pivots in a row. When a LOW pivot point appears like the one featured below, you will then go into HIGH pivot mode where you are watching for a high pivot. This entails looking at the high values from then on. When you find the high values are no longer increasing, this should be a red flag that it could POTENTIALLY be a high pivot. You know it is a High Pivot when and if the magic number is surpassed. If it is indeed a high pivot, then you go into LOW pivot mode, where you look at the lows using the same process.
Stop Loss
NOTE: I do not use Take Profits. Please do not ask me what my Take Profit is.
- Suppose you have just bought. Your initial S/L will be at the recent Low Pivot minimum, OR 100 pips, whichever is lower. The same is true for sell positions just using the High Pivot maximum
- Suppose now that the BUY position you have entered is moving in your favor(UP). Move the stop loss to the low of each completed day.
- Suppose now that the SELL position you have entered is moving in your favor(DOWN). Move the stop loss to the high of each completed day.
An Example Below:
- Red lines are the High and Low Pivots.
- Yellow Lines are the "magic numbers"
- Purple lines are me checking the RSI and scenarios to see if it is a good trade.
- And the 2 light blue lines are trades that qualified.
When to Increase Your Position
If you are in a long trade and the RSI's slope increases in magnitude, buy more. This means steeper slope = buy more.
The same is true for a sell trade.
Best Time of the Day to Trade
The end of the day. For me this is 8-10PM CST.
Trade at your own risk. I do not take responsibility for your losses. And most importantly GOOD LUCK!
Attached Images