Pivot Point, Psych Levles and Intra Day Trend Lines
Ok... I'm not allowed to post my free site detailing my pivot point system but I guess I can write about it.
You can pm me for the site location.
Firstly - most traders know what pivot points are.
If you aren't familiar with them simply goggle pivot points.
Secondly - some are familiar with psych levels.
The two big ones are:
1) anything ending in 00 (1.4000)
2) anything ending in 50 (1.4050)
Thirdly - Intra Day Trend lines work - especially when there's confluence with other support and resistance levels or psych levels.
Now - let's put them together.
I've studied about 40 different systems and forward tested them.
I've purchased e-books, private lessons, real books... etc.
I also needed a system that would keep me sane.
I couldn't go to sleep nights when I had a trade going... even when it was a demo account.
Some systems worked well but had huge drawdowns.
A system with a 500 PIP drawdown?
My pockets aren't deep enough.
I needed a system that allowed for capital preservation with the ability for capital appreciation but with a drawdown that would keep a smaller player in the game.
The combination of the three
I felt I needed 15 - 20 PIP profit objectives and a SL that was similar.
I started trading only when the market was moving.
Usually - shortly after a tier 1 release.
I was in and out.
I hate the idea of being labeled a scalper but when I analyzed my trades the majority of them were less than 2 minutes long.
I much prefer the label: intra day trader.
I took my awhile to find a system but here it is.
Are pivot points indicators?
Not sure to be quite honest.
I use no indicators like MACD, Bollinger Bands and especially not moving averages.
I'm working on posting some charts but my SnagIT trial has ended and I'm hunting for some new screen capturing software.
I make decisions off a 15 minute chart and trade off a 5 minute chart.
I only trade the EURUSD.
It's the most liquid major.
No PIP awards
I'm not going to win awards for the most PIPS but I'm not looking for them.
I'm looking for percentage gain on a monthly basis.
I have a hit rate that hovers around 75% and my drawdown last month was 21 PIPS.
If I were a baseball player I'd be Cal Ripken.
I don't hit home runs... never... only singles and doubles.
However... rarely do I strike out and I'm the game for the long haul.
Nice to hear you don't work with indicators. Can we see some charts please?
The System - Mechanical and Discretionary
1) Use an indicator for Meatrader that plots pivot points on a 15 minute chart with the close of business for the US Session being the start of the day. If you need one let me know... I've got one. I didn't author it - I found it somewhere... maybe here... don't remember.
2) Plot all the psych levels for each session. Anything ending in 50 or 00 gets a line on the chart.
3) What's being released during the session you are trading and what's it's impact. Nothing going to help you if you don't know what NFP is and it's importance on price action.
4) Look at the daily high and low for the day.
5) Where is price when the day starts. If it's 8:30am and you are trading the US Session and price is at R3 already go back to bed.
6) Only trade when the market is moving. It's usually a small window.
7) Once you have your lines plotted and your ready to go determine where price is in relation to the pivot point.
8) If it's above you are looking to go long... below you are looking to go short.
9) Once price hits a key level and retraces you are looking to enter after it begins in to move again.
10) This seems like a lot but a few pics will make it very lucid. SnagIT 8 is still uninstalling so I may have to wait until tomorrow to post my charts.
Anyone Suggest Screen Capturing Software?
It has to be free.
Make sure you PM me with it... Don't want to advertise anything.
It will save your chart as a gif. You can then post it here.
go check out MWSNAP web site for a great free capture tool. Been using it for years.
What does PM stand for?
Make sure you PM me with it...
Let's Look at Today's US Session
It was a no trade today but it's a good example how price obeys the pivots.
Look at the pivot for the day. .4704
I hovers there for the entire Asian session and the first part of the European session before it moves up to R1 an then back again.
Look at the start of the day (Asian Session) ... it bounces off .4750 and the todays new pivot point. .4737
PM = Private Message
PM is Private Message
Here is an indicator that will automatically draw the .xx00 and .xx50 lines.
BillBSS - Sweet
I'd be interested in seeing the rest of your method.
I'll working on creating a more lucid post sometime today.
I plot the pivots and psych levels and look for entries once the move through and pull back.
I only trade during the prime hours.
I post more later.
European Session - Text Book Trade
Let's take a look at the European session last night.
During the Asian session it bounced around between the pivot point and .4750.
There was a significant BEARISH candle that broke through the PP.
That's our trigger to sell.
It retraced a few PIPS and began it's decent right to our profit target. (.4700) Why .4700 and not S1. The first significant take profit target will always be my exit. If S1 was at .4705 then that's when I would take profit.
Additionally I will move be 15 pip stop once price moves 15 pips in my direction. Usually to a 5 PIP stop. If price suddenly retraces before I can get out a 5 PIP loss is something I can live with.
© Forex Factory