Mystic's "If You Can't Dazzle Them with Brilliance, Then Baffle them with Bullshit"

Here's what I am watching today:
GBP/AUD. I use a system taught to me by Rob Booker. It measures time and distance price has been away from the 800 SMA. I have modified it a bit with the inclusion of Pivots Points, Daily Pivot, Weekly Pivot, R3, ans S3.
This is "counter trend trading".

GBP/AUD has been away from the 800 SMA for more than two standard deviations on the 5 minute TF. It would like to visit the 800. On a larger TF this would be seen as a small retrace on a down trend.
The pair is also deviant on the 15 min, and the 30 min.
This usually works out to enter on a higher high after a higher low, with a TL break ( close of candle, no wicks allowed ). When price hits the 800 on the 5 min we usually see a bit of consolidation, perhaps a slight retrace. Then an opening on the 15 min, and so on thru to the 30 min.

What I really like about this setup is that we are close to recent lows, so a relatively tight stop loss can be used, say 20-25 pips below the lowest recent low. With a possible gain of 500 pips, very good R/R.

Where do the Pivot points come into play? GBP crosses have a very high probability of hitting Weekly pivots, and Daily Pivots ( over 90%. This has been tested extensively ) Also, on GBP/AUD,GBP/JPY, and GBP/CHF they have a very high prob of hitting R3 or S3 on Mondays, because the previous day's range ( Sunday ) is usually narrow (gbp/aud has already hit R3.

There are other ways to trade the PPs which I will go into at a later time.

Here are the 5 minute and 4 hour charts:

Almost forgot.

The Blue lines on the chart are Daily Pivots. The Orange lines, Weekly Pivots, and the Red Lines are R2, S3.

Mystic, can you post your pivot indicator or let us know what time the new daily pivots are calculated with your system. Also, can you touch on the entry area a little more, a bit fuzzy to me. Thanks

Bigandrich,

Entry on the "statistical deviation", IE; the pair is statistically oversold ( or overbought ) is based on the traders ability to read price action, support and resistence, I even know some traders who use MACD divergence. I don't trust divergence on anything smaller than a 1 hour TF.

The orther two MAs on the chart are the 200SMA and the 62EMA. As I said in my first post, this system was taught to me by Rob. Now he sometimes pays me to assist him teaching seminars.
( ( I am not selling anything here. If someone wants to pay me to work for them, fine. But I am not a mentor, I am a trader. The only thing I have ever charged for is a signal service about 2 years ago. I found it un satisfying and have since discontined it ). The most ideal time to enter the trade is when the 62 EMA is between the 200 and 800 SMAs. But, this is by no means an MA cross system.

The Pivot points, which I find helpful for picking TPs ( remember the 800 SMA is a moving target, because of the high number it moves slow, but it does move). The Pivot Point system is more mechanical. Requres a lot less thought. The key ingredient is confidence and letting your profits run. The best way to gain confidence in a system is through extensive backtesting.

I am posting an A/U 5 min chart just for example, I am not particularly fond of trading A/U.
Notice how the red 62 EMA is berween the 200 (blue) and the 800 (below, not visable on chart). The 800 ( the TP for this system)is only 40 pips away.
Not very good R/R. However, we have a missed weekly pivot @9236, a missed daily pivot @9156, and last weeks missed weekly pivot @9063.
We have not done any testing on the AUD, so I have no idea what the probability is of price hitting those missed pivots. If this were a GBP cross I would certainly pay attention to this one.



Chris

Next week I'll get into how the PPs are traded as a stand alone system.
It is very radical, and requires nerves of steel.
( there is another part of the human anatomy, which if made out of brass would come in handy as well).

The pair on 5 min chart has hit the 800

Technically, this trade has opened on the 15 mim as well, We broke the TL, the has whipsawed, but still printed H/Hs and H/Ls.

nice mystic, continued to make the climb after your posts; looks like it found resistance at the 1.6620 (R2) area; excellent

15 Min completed, 30 min open.