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RSI Daily Pivot Point System

  • #21
  • Jan 7, 2007 8:29am Jan 7, 2007 8:29am
Kharvell, would you mind elaborating a bit on the set up, ie how to determine when we have a minimum and maximum at hand and what they will be. Your example, for instance, refers to 16 November's high and low, but it looks to me like this was the high and low for 15 November, not 16 November. Is it basically a breakout of any random day's high and low on a following day where RSI confirms?

Thank you.
  • #22
  • Jan 7, 2007 2:43pm Jan 7, 2007 2:43pm
Thanks kharvell for posting this system. The back testing and forward testing results are very impressive, therefore merit due attention.

I have not been abe to understand it completly, and have following questions,

1. You refer to the Pivot points- are these the normal pivot points(Resistance R1, R2, R3, cntrl pivot, Support S1, S2, S3) or any thing different.

2.The maximum of B. Pound for 16th Nov is 1.8966. For going long, you add 3pip spread to make 1.8969. You call this a magic number. Is this the only reason to make it a magic number?

3. 1.8969 is the max. for 16th November. Then we should look for this value within next three days. If this value is not reached, then just forget it and do not look this value anymore. However if this value is reached within next 3 days then look to go long/short depending on RSI(10).

A. RSI(10) sloping up and more than 50----BUY
B. RSI(10) sloping up and come from 30 to 40----BUY
This mean that if RSI(10) is sloping up, this is BUY.

C. RSI(10) sloping down and above 50---Do nothing
D. If RSI(10) is below 50 ----Do nothing
This means that if RSI(10) is sloping down, no action.

4. Similarly for short, one should be looking for the minimum value of 1.8631 to be reached within next three days, and go short if RSI(10) is sloping downward.

5. Would request some information on Take profit and stop loss.

Regards


kapanil















0
  • #23
  • Edited 5:28pm Jan 7, 2007 5:00pm | Edited 5:28pm
Quoting Ironball
Kharvell, would you mind elaborating a bit on the set up, ie how to determine when we have a minimum and maximum at hand and what they will be. Your example, for instance, refers to 16 November's high and low, but it looks to me like this was the high and low for 15 November, not 16 November. Is it basically a breakout of any random day's high and low on a following day where RSI confirms?

Thank you.
WOW, you guys are really pumping out the tough questions! Alright, I'm not sure if I'm allowed to post this due to copyrights, but it is only one page, and it explains Pivot Points...

Essentially, A series of Highs continue to get higher, but then on one day the high DOESN'T GO HIGHER! THAT is a MAXIMUM! The reverse is true for a minimum! The link below indicates IDEAL pivot points. If you think of the market as waves, your pivots are at the VERY TOP and VERY BOTTOM of each wave!

Look at JohnDoe's post below to see the pivot article!

Quote
Thanks kharvell for posting this system. The back testing and forward testing results are very impressive, therefore merit due attention.

I have not been abe to understand it completly, and have following questions,

1. You refer to the Pivot points- are these the normal pivot points(Resistance R1, R2, R3, cntrl pivot, Support S1, S2, S3) or any thing different.

2.The maximum of B. Pound for 16th Nov is 1.8966. For going long, you add 3pip spread to make 1.8969. You call this a magic number. Is this the only reason to make it a magic number?

3. 1.8969 is the max. for 16th November. Then we should look for this value within next three days. If this value is not reached, then just forget it and do not look this value anymore. However if this value is reached within next 3 days then look to go long/short depending on RSI(10).

A. RSI(10) sloping up and more than 50----BUY
B. RSI(10) sloping up and come from 30 to 40----BUY
This mean that if RSI(10) is sloping up, this is BUY.

C. RSI(10) sloping down and above 50---Do nothing
D. If RSI(10) is below 50 ----Do nothing
This means that if RSI(10) is sloping down, no action.

4. Similarly for short, one should be looking for the minimum value of 1.8631 to be reached within next three days, and go short if RSI(10) is sloping downward.

5. Would request some information on Take profit and stop loss.

First of all, you are really doing your homework ! I assure you with time, pivot points will jump out at you like they are an eye sore..

Let me answer your questions now:

1. Pivot Points have NOTHING to do with resistance or supports as you may know them. I know exactly what you are talking about with all that mumbo jumbo support resistance stuff, but seriously it's a matter of looking at candle sticks that are showing increasing high's and decreasing lows, and seeing where that trend stops.

2. I simply call it "the magic number" because it is the only # you need to know.

3. For November 16th, you would only look to go LONG because you came from a MINIMUM pivot, you would only look to go SHORT had a MAXIMUM pivot developed.

4. You have got the gist of it, but it is possible for the RSI to be sloping UP above 40(but below 50) but it DID NOT come from 30. THIS is very IMPORTANT! If it didn't come from 30 then you do not buy!

5. Take profit? I do not believe in that! I don't know if you have read any of the Market Wizards books, but almost EVERY trader will tell you to cut losses, and LET PROFITS RIDE! This being said, we wait for the next magic number in a reversal to get out of the trade. And as far as stop losses go, it will initially be 100 PIPS or the minimum(or maximum), whichever is lower..

Suppose if you will that a trade is going in your favor UP and each bar's high increases from the previous. As each bar is completed, you set your stop loss to the LOW of the completed bar before it. This essentially is claiming temporarily that the bar before it will be a pivot point, when in fact it is not. If you need examples, please look where my stop losses are set in the trades I have posted above!



Hope this all helps, if you still need clarification let me know!
  • #24
  • Jan 7, 2007 5:23pm Jan 7, 2007 5:23pm
Hey Kharvell.......
Here is a link to a neat little dahboard widget that takes screen shots or pieces of the screen, makes some of this a bit easier.....
Screenshot Plus widget

Here is the same pic you posted.

http://img95.imageshack.us/img95/375...enshot1qx4.png
Same Whore .... Different Dress
  • #25
  • Jan 7, 2007 5:28pm Jan 7, 2007 5:28pm
Quoting johnedoe
Hey Kharvell.......
Here is a link to a neat little dahboard widget that takes screen shots or pieces of the screen, makes some of this a bit easier.....
Screenshot Plus widget

Here is the same pic you posted.

http://img95.imageshack.us/img95/375...enshot1qx4.png
WHOA! That's gnarly! Thanks for that! Who wants to see pictures, and of what?!
  • #26
  • Jan 7, 2007 5:46pm Jan 7, 2007 5:46pm
Let me know if you have any ?s about it and posting...
Same Whore .... Different Dress
  • #27
  • Jan 7, 2007 5:48pm Jan 7, 2007 5:48pm
Quoting johnedoe
Let me know if you have any ?s about it and posting...
I've got it all figured out

So here is the recent GBP/USD trade I've made, The down arrow is when I entered, and the RED LINE is my current S/L! Notice how it is set at the high of the completed bar:
Attached Image
  • #28
  • Jan 7, 2007 6:02pm Jan 7, 2007 6:02pm
In this trade you are short correct?
so should'nt the stop be above the arrow?
and that red line be a TP?
do you follow the trade with a trailing stop? I know you have to do this manually at Oanda, that is where I trade too.

OK My mistake......you are following the price down and you have locked in at the second down bar...
Same Whore .... Different Dress
  • #29
  • Jan 7, 2007 6:07pm Jan 7, 2007 6:07pm
Quoting johnedoe
In this trade you are short correct?
so should'nt the stop be above the arrow?
Yes I am short..and I don't know if you are aware but i am STILL IN this position
Yes initially this is the case, BUT the trade is going in my favor, so I keep moving the stop to lock in profits.. This paragraph above should explain it..

Quote
Suppose if you will that a trade is going in your favor UP and each bar's high increases from the previous. As each bar is completed, you set your stop loss to the LOW of the completed bar before it. This essentially is claiming temporarily that the bar before it will be a pivot point, when in fact it is not. If you need examples, please look where my stop losses are set in the trades I have posted above!
  • #30
  • Jan 7, 2007 6:10pm Jan 7, 2007 6:10pm
OK My mistake......you are following the price down and you have locked in at the second down bar...
Same Whore .... Different Dress
  • #31
  • Jan 7, 2007 6:10pm Jan 7, 2007 6:10pm
Quote
and that red line be a TP?

DON'T MENTION TP'S AROUND ME

I'm only kidding, but seriously, the very hinge of my system is that you maximize profits... Otherwise losing trades would more than likely get you in negative territory
  • #32
  • Jan 7, 2007 6:14pm Jan 7, 2007 6:14pm
Quoting johnedoe
OK My mistake......you are following the price down and you have locked in at the second down bar...
That is correct! I am essentially guaranteeing myself 200 PIPS should this 340 PIP position turn on me!
  • #33
  • Jan 7, 2007 6:21pm Jan 7, 2007 6:21pm
OK I'm a little slow sometimes but I'm starting to catch on
Same Whore .... Different Dress
  • #34
  • Jan 7, 2007 6:25pm Jan 7, 2007 6:25pm
Quoting johnedoe
OK I'm a little slow sometimes but I'm starting to catch on
Better safe than sorry, and as I said earlier, There's no such thing as a dumb question. In fact, I encourage them!
  • #35
  • Jan 7, 2007 10:53pm Jan 7, 2007 10:53pm
Quoting kharvell
I've got it all figured out

So here is the recent GBP/USD trade I've made, The down arrow is when I entered, and the RED LINE is my current S/L! Notice how it is set at the high of the completed bar:
When you have a minute i have a few more questions for you.

  1. Is there a limit of profit that has to be reached before you start using the opposite extreme as the SL? For example, in your example above how soon did you start using the high of the last candle as your trailing stop?
  2. You mentioned in one of your other posts that you do not wait until the candle closes before you enter. In your backtesting or forward testing have you ever seen price hit the magic number, RSI confirm, and then price retraces below the magic number, and RSI drops, which no longer causes it to confirm? The reason I ask is because for everyone trying to backtest we are only seeing what it looks like close of day. We can not see what happend to RSI during the day.

I hope these questions make sense.

Trade Well...
Brent

  • #36
  • Jan 8, 2007 12:18am Jan 8, 2007 12:18am
Hi fellow traders,

I am new to this forum, been demo trading for about a year with mixed results. This appears to be a system that trades the bounce off of a daily high/low channel with the RSI as confirmation. Trigger is the low of the high pivot or high of the low pivot. From what I have read, channel trading has always been very good performers. In fact Larry William's first publicly offered tradings systems(back in the early 80's) were channel systems for which he offered maony back gaurentees if they did not make a profit for the buyer!!
  • #37
  • Jan 8, 2007 6:11am Jan 8, 2007 6:11am
Quoting forex2stay
When you have a minute i have a few more questions for you.

  1. Is there a limit of profit that has to be reached before you start using the opposite extreme as the SL? For example, in your example above how soon did you start using the high of the last candle as your trailing stop?
  2. You mentioned in one of your other posts that you do not wait until the candle closes before you enter. In your backtesting or forward testing have you ever seen price hit the magic number, RSI confirm, and then price retraces below the magic number, and RSI drops, which no longer causes it to confirm? The reason I ask is because for everyone trying to backtest we are only seeing what it looks like close of day. We can not see what happend to RSI during the day.

I hope these questions make sense.

Trade Well...
Brent


There is no limit as to when you start moving your stop! As each completed bar develops, you treat it as if it COULD be the new pivot point. Let me show you an example below of my current trade in USD/JPY:


I am using this is as an example of a ranging trade, This also qualifies as your question #2 answer, because if you look at the RSI, it is doing all sorts of funny business. This may not have been my best trade, but I'm waiting to see what becomes of it. As of now I'm up 6 PIPS, but towards the close of the day I should have a better idea of whether or not it is a loser
Attached Image
  • #38
  • Jan 8, 2007 6:14am Jan 8, 2007 6:14am
Quoting bobbyacim
Hi fellow traders,

I am new to this forum, been demo trading for about a year with mixed results. This appears to be a system that trades the bounce off of a daily high/low channel with the RSI as confirmation. Trigger is the low of the high pivot or high of the low pivot. From what I have read, channel trading has always been very good performers. In fact Larry William's first publicly offered tradings systems(back in the early 80's) were channel systems for which he offered maony back gaurentees if they did not make a profit for the buyer!!
Channel systems are great! Really look at the Vegas method in this forum, because as far as channel systems go, it is one of the best! As far as my system goes, it is relatively new and still in the 2nd week of forward testing, more than likely needing improvements. I have given you the backtesting results, and it is really up to you to decide what systems will suit you best! Good luck to you, my friend!
  • #39
  • Jan 8, 2007 10:20am Jan 8, 2007 10:20am
I have redone the backtest of GBP/USD. Apparently, earlier I thought 6 months was starting in August, but it is in fact July : silly me. I find the results very INTERESTING, and am amazed at how well the system seems to work.

Also, I think I am adding a new rule to wait till the end of the day for decisions, this make the RSI more accurate when set on close. If you have the option consider experimenting with OPEN RSI VS CLOSE, and please let us know which works better

Here are the results:
Attached Image
  • #40
  • Jan 8, 2007 10:37am Jan 8, 2007 10:37am
Quoting kharvell
I have redone the backtest of GBP/USD. Apparently, earlier I thought 6 months was starting in August, but it is in fact July : silly me. I find the results very INTERESTING, and am amazed at how well the system seems to work.

Also, I think I am adding a new rule to wait till the end of the day for decisions, this make the RSI more accurate when set on close. If you have the option consider experimenting with OPEN RSI VS CLOSE, and please let us know which works better

Here are the results:
Any chance you can put up a chart or two and walk us through the first 4 trades? I think it would be a nice learning experience for everyone.

Trade Well....
Brent
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