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RSI Daily Pivot Point System

  • #41
  • Jan 8, 2007 11:07am Jan 8, 2007 11:07am
This could be a bit of a stupid question but.........what day or days do u start this system on or is it a case of it works on any day ? Just the first example u gave was a thursday so do u use them pivots for the next 3 days or change them according to action the following day ?
  • #42
  • Jan 8, 2007 11:18am Jan 8, 2007 11:18am
Quoting Billy73
This could be a bit of a stupid question but.........what day or days do u start this system on or is it a case of it works on any day ? Just the first example u gave was a thursday so do u use them pivots for the next 3 days or change them according to action the following day ?
No stupid questions here.. I'm not sure I get what you're asking though.. I would tell you that a pivot could happen on any day, monday through friday. You just have to look at the preceding days(whether their high's are trending up, lows are trending down) then the next bar will stop the trend of increasing high's or decreasing lows... I hope this makes sense, but let me know if it doesn't.
  • #43
  • Jan 8, 2007 11:21am Jan 8, 2007 11:21am
Quoting forex2stay
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
Alright forex2stay, you and you're great questions...

Here is a chart for you and anyone else interested.. It works much like the other one I've posted, but only includes the first 2 trades in my backtest.. Basically,
Every red line is a pivot point, every yellow line is a magic number, every purple line is me checking the RSI when the magic # is hit, and the 2 cyan(light blue, VERY HARD TO SEE, look at the yellow lines) are when I would have bought. Then, if you follow after the cyan line, the next magic #(yellow line) is when I would have sold.

If you need some more examples, do let me know
Attached Image
  • #44
  • Jan 8, 2007 11:26am Jan 8, 2007 11:26am
Quoting kharvell
No stupid questions here.. I'm not sure I get what you're asking though.. I would tell you that a pivot could happen on any day, monday through friday. You just have to look at the preceding days(whether their high's are trending up, lows are trending down) then the next bar will stop the trend of increasing high's or decreasing lows... I hope this makes sense, but let me know if it doesn't.
Yes i get what your saying the system works on any day, therefore everyday you'd have to look at the charts to see the pivot point for that days entries am i right ? And do u wait till the close of the daily bar to decide your entry, which would be GMT or what ? Thanks for your answers.

Just one more question, would it be possible for u to post your entries for a day or so so we could get a clearer idea of where to entries would be ?
  • #45
  • Edited 11:42am Jan 8, 2007 11:31am | Edited 11:42am
Quoting Billy73
Yes i get what your saying the system works on any day, therefore everyday you'd have to look at the charts to see the pivot point for that days entries am i right ? And do u wait till the close of the daily bar to decide your entry, which would be GMT or what ? Thanks for your answers.
Yes you are right, essentially, one could check their pivots only once per day towards the end of the day(not sure the exact GMT, if someone knows, LET US KNOW) and my system would work. I like to keep an eye on my trades though just to be sure..

I have just added the rule that it would be best to make trades and S/L decisions towards the end of the day... Hopefully, someone is ambitious and will experiment with an open RSI for me, as I can only use OANDA on my mac

Quote
Just one more question, would it be possible for u to post your entries for a day or so so we could get a clearer idea of where to entries would be ?

These trades are still going from last week. I have yet to see another opportunity to get rid of them and/or reverse positions:
Attached Image
  • #46
  • Jan 8, 2007 2:10pm Jan 8, 2007 2:10pm
The new results you posted, are they EOD like with the new rule? Also, could you please explain how you deal with inside and outside bars?
  • #47
  • Jan 8, 2007 2:42pm Jan 8, 2007 2:42pm
Quoting drayco
The new results you posted, are they EOD like with the new rule? Also, could you please explain how you deal with inside and outside bars?

Yes, they are using the end of the day RSI, and I'm not quite sure what you mean by inside and outside bars, so please clarify and I believe I should be able to come up with an answer
  • #48
  • Jan 8, 2007 3:36pm Jan 8, 2007 3:36pm
Thank you,
An inside bar is one where both the Hi and Lo are within the previous bar Hi and Lo. An outside bar is where the Hi is above previous bar Hi and the Lo is below previous bar Lo.
  • #49
  • Jan 8, 2007 3:42pm Jan 8, 2007 3:42pm
How are the results without the RSI filter? Does it make a big difference?

Thanks.

Hans
  • #50
  • Jan 8, 2007 3:47pm Jan 8, 2007 3:47pm
Quoting drayco
Thank you,
An inside bar is one where both the Hi and Lo are within the previous bar Hi and Lo. An outside bar is where the Hi is above previous bar Hi and the Lo is below previous bar Lo.
Ahhh I got ya! An outside bar will be irrelevant unless it creates a new high or low, and so will inside bars. Inside bars, as long as they stay within your pivot points, are meaningless. It's all relative to the last pivot point, and if a new pivot point emerges because of outside bars, then that's the only time to take note of them.
  • #51
  • Jan 8, 2007 3:48pm Jan 8, 2007 3:48pm
Good question regarding inside bars.. i would tend not to include inside bars (daily bars which do not exceed hi or low of previous day) so leave trailing stop at the previous bar.

Outside or engulfing bars will be a signal that a new pivot is forming and get ready to make a move.

There is a case where a narrow range inside bar (maybe doji) doesn't go as low as two engulfing opposite direction bars on either side. or if this inside bar is ignored this is the same as a double hi or low which could turn into a pivot. (merge the double bars together and you see the pivot)..

Another take off on this that i've been using sometimes is to use an equivalent 1 day stop on shorter term charts, so say use the hi/low of the last 6 bars as your trailing stop when trading 4 hr chart.
  • #52
  • Jan 8, 2007 3:52pm Jan 8, 2007 3:52pm
Quoting hans123
How are the results without the RSI filter? Does it make a big difference?

Thanks.

Hans
I would say so, it was a long time ago when I tested it without, but the system is more prone to false breakouts without it! So I would stick to the RSI, or if you can find a better one, let me know!
  • #53
  • Edited 3:57pm Jan 8, 2007 3:53pm | Edited 3:57pm
Thanks kharvell - have enjoyed your thread and learned from you!

I believe that in terms of the 'close', many use 10:00 pm GMT which is the same as 5:00 pm EST.

Question please: regarding your post #27 - is my understanding correct that you would not have traded that pair with this system from 12/20 thru 1/2 - [assuming 12/20 was a max high, which it may not have actually been]??
  • #54
  • Jan 8, 2007 3:56pm Jan 8, 2007 3:56pm
Quoting mrSmoothy
Good question regarding inside bars.. i would tend not to include inside bars (daily bars which do not exceed hi or low of previous day) so leave trailing stop at the previous bar.

Outside or engulfing bars will be a signal that a new pivot is forming and get ready to make a move.

There is a case where a narrow range inside bar (maybe doji) doesn't go as low as two engulfing opposite direction bars on either side. or if this inside bar is ignored this is the same as a double hi or low which could turn into a pivot. (merge the double bars together and you see the pivot)..

Another take off on this that i've been using sometimes is to use an equivalent 1 day stop on shorter term charts, so say use the hi/low of the last 6 bars as your trailing stop when trading 4 hr chart.
mrSmoothy,

Good answer there! You pretty much have it right on the spot.. As far as 4 hr charts, I have tried back testing, but they do not appear as profitable. Again, this is because of false breakouts in ranging markets! BUT if you do some backtesting and you do find it a bit more profitable, DO let us know!

Again, I realize this system is not perfect, and I WANT improvements, so please keep on with the feedback
  • #55
  • Jan 8, 2007 4:00pm Jan 8, 2007 4:00pm
Quoting tpn77
Thanks kharvell - have enjoyed your thread and learned from you!

I believe that in terms of the 'close', many use 10:00 pm GMT which is the same as 5:00 pm EST.

Question please: regarding your post #27 - is my understanding correct that you would not have traded that pair with this system from 12/20 thru 1/2 - [assuming 12/20 was a max high, which it may not have actually been]??
Hey, thanks for the answer!! And it makes me happy to see that you've got it RIGHT ON the spot!! I would NOT have traded if that were the high
  • #56
  • Jan 8, 2007 5:36pm Jan 8, 2007 5:36pm
FYI, Many currency pairs are now showing reversal days i believe or may very likely by tomorrow! I'm long EUR and carry JPY crosses. GBP a possible buy around 9340 if it confirms pivot low and bounces 38fib is my guess.
  • #57
  • Jan 8, 2007 5:40pm Jan 8, 2007 5:40pm
Quoting mrSmoothy
FYI, Many currency pairs are now showing reversal days i believe or may very likely by tomorrow! I'm long EUR and carry JPY crosses. GBP a possible buy around 9340 if it confirms pivot low and bounces 38fib is my guess.
Could you elaborate more on where you are getting these numbers? I assume that you are not using my system, as I am looking to buy gbp/usd at around 1.945 or so..
  • #58
  • Jan 8, 2007 6:05pm Jan 8, 2007 6:05pm
If i have this right, we wait for the close of the current bar to determine if the previous bar contains the max or min? And if so (pretend it's the max) the low of that previous bar becomes the magic number? If that is so, what do you do if the current bar close is way below the magic number?
  • #59
  • Jan 8, 2007 8:08pm Jan 8, 2007 8:08pm
Quoting kharvell
Could you elaborate more on where you are getting these numbers? I assume that you are not using my system, as I am looking to buy gbp/usd at around 1.945 or so..
Sounds about right. i did make my trades based on another system. It looks like GBP/USD RSI did not come up from 30 although now above 40, sloping up but flattening so i wouldn't be suprised to see a slight pull back (which is where i like to buy), then another shot up that will push the RSI over 50 triggering your system long and moving further up .. but until then stick with your system.
  • #60
  • Jan 8, 2007 8:23pm Jan 8, 2007 8:23pm
Quoting drayco
If i have this right, we wait for the close of the current bar to determine if the previous bar contains the max or min? And if so (pretend it's the max) the low of that previous bar becomes the magic number? If that is so, what do you do if the current bar close is way below the magic number?
It does not necessarily have to be when the bar closes:
Pretend a max develops and the next bar is red, and you don't think it will go above the newly formed max. At this point you could sell if you have reason to believe your max won't be challenged. And if it is past your magic # and RSI is still indicating, then all is well for a sell
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