USD/JPY Discussion

I do appreciate that and understand very well....... Of course, I've been gone for a year myself.... smiling...... Part of my fault also.

OK – Let’s talk about pivots and the purpose for pivots: As a definition, a pivot point is a turning point or condition. The pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. Pivot points work best on highly liquid markets such as the ForeX.

It is useful to have a map, such as charts, and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade….. There are any given times when a candle can and will bounce off a pivot and retrace back to the previous pivot but as long as the movement is in the trend, then the retrace will turn again, and follow the trend.

Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action. They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.

There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session). Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions are taking the open at 17:00 EST and the close at 16:59 EST. The reason for this time table is because of the closing of the New York Banks with the calculation of interest and then the opening of New Zealand which is actually the beginning of Sunday’s open of the ForeX Market…… During Daylight savings time there is that 1 hour difference but it does not affect the 17:00 ET rule.

Now let’s calculate this last Thursday session of the USD/JPY going into Friday’s pivots:

Open: The open was at 17:00 ET Friday at 107.94
High: The high was during Thursday session at 108.06
Low: The low was during Thursday session at 106.79
Close: The close was at 16.59 Thursday at 107.95

I calculated these numbers from the daily candle.......

Here are the pivots from Friday’s Session:

R3 – 109.68
R2 – 108.87
R1 – 108.41
Pivot Point – 107.60
S1 – 107.14
S2 – 106.33
S3 – 105.87

These are the seven most import pivots during a session but there are also the M pivots known as mid-pivots and they are 50% between the each of the 7. In other words, you have at the PP 107.60 and at the R1 108.41 and 50% between the two is 108.00

How I arrived at that is R1 – 108.41 minus the PP – 107.60 is .81 divided by 2 (50%) is .40 (rounded) and add that to 107.60 and you have 108.00.

The Mid pivots are as crucial as the main pivots…… So always remember that.

What we have done above is the daily pivots…… For right now we will concentrate on the daily and in time we will move on to the weekly…….

We also have what is known as the central pivot point and that is the opening candle at 17:00 ET. This pivot is also crucial as it will help to determine the movements during consolidation and also price movement during retracements. Most of the time, this pivot will be anywhere between 20 – 40 pips above or below the PP.

This coming week we will work on these pivots and I am sure there will be those who do not agree on this system so we will do our best to work around those who want to give us their opinion because they are entitle to do so and we will listen……

Ditto what Firstboss said, can't add anything to that. And hey again to you FB. Long time.

FWIW, I have however been posting UJ and GY stuff on the GY thread, and not this one for reasons I've already stated. I dug up and edited an old post with chart from mid March as example along with just one of many examples of a near perfect pivot bounce on UJ. This was part of a project to see if and when the geppy responded to pivots or when it didn't. Did the same thing to a lesser degree with EU.

So Dove, don't think the seeds you dropped from back then all fell on rocky ground. There's a good number of us out here that were and remain grateful for your input in opening up new areas to explore.

I want to say again that I hope you consider a new thread (or the old one) that reflects your techniques and perspective that can be read from the beginning by folks on their first time around much easier than dredging all that up from this one. There's been 3000+ posts worth of water go under this bridge since then, and you're going to get deluged with requests to cover old ground all over again. The things you have to offer are worth a home of their own imo.

Anyway, didn't intend to write a book. Here's one of several posts on GY pivots I did on this subject, this one with a tweak. I began using what I call QP's or quarter points labeled Q1 and Q3 as explained. I find them VERY useful under the right market conditions for a wide ranging pair like GY. Very simple, and very effective.

LOL Dove - some of us have been trying to spread the word.....probably half of my posts in my Naked thread were about using pivots - to the best of my limited knowledge...http://www.forexfactory.com/images/icons/icon7.gif


Islander http://www.forexfactory.com/images/s...ser_online.gif
Senior Member
Member Since Jan 2007
Posts: 1,790


http://www.forexfactory.com/images/icons/icon1.gif
Quote:
Originally Posted by NowAndLater http://www.forexfactory.com/images/buttons/viewpost.gif
Hi guys!
Nice work you are doing here. Have been following this thread and the Skunny all along and have started trading this in demo and been doing some vHands. Just a question, what is M3 pivot line?


Thanks NAL

The Daily Pivot level is the prior days High+Low+Close/3 ....from this a number of other levels are calculated - usually R1 & R2, SI and S2 - the M levels are the mid points.

This system was first used by the floor traders in the old Pits where open outcry trading took place - like way before anything electronic - when the sliderule was high tech!

Dove Alliance did some excellent work and explainations in the UJ thread some 6 or 9 months ago - you'll get good info there.

These levels are useful, especially in the Yen pairs.
__________________
Pip Pirate
Last edited by Islander, Feb 13, 2008 8:34

Ok guys, I'm going to put my 2 cents here since Bruce or "Warren Forex" has been a little hyper lately.


I've kept my mouth shut so far but I promised myself that if Bruce got too vocal I would come and say a little of what I know. Not to denigrate him as a person, but to warn others and maybe save my fellow traders from possible troubles. I myself got in trouble last year following somebody else's advice ( not Bruce's) and ended up in a margin call. And let me tell you that its not fun when you have a family and are struggling to make some money in this market, to just end up "donating" more than half of your account to an already rich trader so that he can put premium gas in his ferrari!!!
Be very carefull of whom you take your advice from. Be aware that even a small commentary can change your thoughts and keep you donating to the rich tarder I mentioned above.

Ok... I started trading on Oanda in March of last year without any prior experience, so I have found that the smartest way to gain some knowlegde is to study hard and read what successful traders discuss in the forums over the net. The oanda forum was where I started, and there was Bruce...or Brucie as people used to call him over there. At the time Buce was a very vocal contributer for the forum and with his "God bless" etc he got my attention. At first I perceived him as a nice guy...maybe Christian..brillant trader, willing to help etc...etc. What sometimes bothered me was the fact that Bruce had a sort of bipolar personality. Sometimes he was very humble, down to earth and thoughtful, at other times his ego really got momentum and phrases like " I'm the best trader in the universe" and other things along this line could be read in his posts. Another point is that he used to trade insanely leveraged with really BIG positions for 2 or 5 pips. Something that even a newbie like me perceived as a “kamikaze” strategy. Well to make a long story short he got into so many arguments with other senior members at the forum that some threads started to pop up with the "non Bruce" at the end of the title like, "EUR/USD non Bruce thread". I remember that he used to desregard the warning and post in the threads anyways which ended up causing him to lose his posting privileges over there.

But the worst part of all is the fact that he made lousy calls almost all the time! And this is particularly where I think Bruce can be really dangerous because his eloquency, his ideas, and his persistance in each and every discussion can be really misleading for newbies, or even some more experienced traders. Look, if he traded his calls last year, then he definately ended up in a margin call ( as a lot of people say he did) and lost not only his account but the accounts of people who hired him as a money manager. I will refrain from commenting further about his misventures on forex but it is all there. Just go to the Oanda forum and ask the seniors like Orlandoflyboy, forexattic or forexhaole about Brucie and they will tell you. Also, after he was kicked out of the forum he made 3 or 4 more attempts to come back with other nicknames like "Phoenix risen" etc, but people allways figured out that it was him because of his style and lhis lousy calls, and he always got kicked out again.

Since I've been here in this thread I've noticed the old Brucie back in business with lousy calls and trying to get to manage people's money and it's started to bother me to see the same smoke and mirrors. He has been proclaiming a reversal on the yen pair for a while now and the trend has been consistently up, but he still claims to make money, so I realized that he is either not trading his calls at all, or he is going to be margin called again, like he was in the past.

Now I have to give him credit for bringing Dove back here to the thread. I'm a little skeptical of succesful traders over the net but Dove seems to be an exception. I had the patience to compare his posts last year with the charts and he got from 85 to 95% accuracy in his calls exactely when we were in the climax of the carries unwinding (tough times!!!). Add that to the fact that he doesn't claim to be “the best trader in the universe” but just an ex-truck driver who Jesus taught forex to and... and I don't know about you but he really impressed me. And as a matter of fact since he is back just compare his calls from last week and Brucie's calls....I guess you will get the picture.

Again....I'm not here to bring Bruce down or to brown nose Dove. I don't get payed to do either. But I think it's nice to have somebody like Dove and his skills around trying to help...for free.... And it's really annoying to have Bruce just copying and pasting Thompson, or other news feeds and making lousy call after lousy call and putting the blame on Bernanke and the market in general.

Ok folks now you have the facts....but don't take my word for it, just dig back Dove's posts in this thread and Bruce's posts here and at the Oanda forum and the facts will speak for themselves.

Hope I had opened some eyes around here and saved some newbies from getting into trouble. I hope also that Bruce will put his ego aside, learn with everybody else here, and then “God really will bless” so he may trade succesfully and be happy in life.

Good trade to all !!!!

Lincoln

thanks pinchapip for sharing your experience....

but .. have you ever seen a trader that tells the truth in any forum? LOL

Dove also says that he makes 100 pips every day...
if that is true it means he can convert 1000€ to 19,569,470.34€ in 20 trading days... using 100 leverage... next month would be billions... ok I know 100 leverage is huge.. but if he says so confident that he can make those pips day after day.. I don't see the reason of not using 100 leverage then...

the only good thing is that we can learn many things all together.. and the only objective is to not give the money to those rich traders or banks as you say.. because that's very painful. But that's why the banks opened the forex to individual forex traders.

Dove funny how you assume I am a new trader cause I don't come on these forums very often. I wasn't trying to argue with you all I was saying are indicators can get you in trouble. Again don't assume I am a new trader cause I haven't been on this forum long. Perhaps because I feel it is a waiste of time, but tried it and now realize that it is a waiste of time.


Do whatever you want this is a waiste of my time.

I will respond so everyone knows where I am at: I am in the Forex because my Lord Jesus guided me here and His response for teaching me what I know of the 4X is giving up 50% of my profit to His people in need...... And I really don't care if you believe or not..... That is not my position, but what I give to charity would make any man rich. That is the only reason I trade this market....... To help those who cannot help themselves......

Good luck in your trading.

for me it is perfect that you do it so well... but don't encourage new traders to get 100 pips a day.. because they'll likely lose their accounts soon. let's start with 10 pips a day... and the most important thing. EVERY day.

Thank you for mentioning your motivation for trading. That is very honorable - and I wish you continued success. I'm hoping that a little of your knowledge will rub off on me too - I also have a heart for helping people and I'd like to be able to do more once I can be more consistently successful in forex.

This is also a good idea if you use charting software with a different chart for each time frame, such as the Accucharts. Otherwise, you might have to add pivots on 4-5 different charts just for one pair. Additionally, I've set up my excel sheet so that it automatically calculates the mid-pivots after I've input the pivots. Less menial work means more time for analysis!

Here are the pips for Sunday;

R3 - 109.12
R2 - 108.75
R3 - 108.39

PP - 108.02

S1 - 107.66
S2 - 107.29
S3 - 106.93

How I arrived with Sundays pivots Is taking Fridays or today's high with either Friday low or today's low from the daily chart, depending on which is true and Friday's high and low before today's 17:00 is the true count......

The Central Pivot is todays open at 17:00 ET which is 108.04 and is only 2 pips above the Pivot Point which has no significants for this session.

I don't know if you know it or not..... But the AccuCharts has the pivots set up automatically BUT, Sundays pivots must be done as I explain above because the automatic cannot do it right on Sundays.

Also the Fibo can be set up automatically on the AccuCharts.

For anyone having difficulties on figure it out go to your daily chart and on Friday's candle you notice the high at 108.37, the low at 107.64 and the close at 108.04....... These are the numbers to figure the pivots for the next 24 hours after 17:00 ET today.....

That's handy to know, but one less set of lines on my chart is a good thing. I'm a minimalist by nature.

Dove, the low of 107.83 is off of the Sunday 6/15 candle, but the Friday 6/13 had a lower low @ 107.64. Shouldn't that be the number we use to calculate? I think you calculated the pivots with that number since I got the same numbers using the low of 107.64.

You are right - the low is 107.64.... I recalculate.

Apparently I did it right the first time because the pivots are true......
I appreciate it anyway...... I need someone to keep me right......

It is the beginning of the week and I do not expect too much happening for at least until Asia comes in...... The trend is still up on the yen and down on the eur......

We have a high that goes back to Feb at the 108.59...... and then a resistance at the 110.00.... If the 108.59 is broken then I will be looking for the 110.00