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the Set and Forget Pivot Net system

  • #21
  • Aug 28, 2008 7:40am Aug 28, 2008 7:40am
Quoting jlpi
blueace, your strategy makes sense as a whole and that is not so often the case for strategies we see on the forum.
The points that I like are:
- wait for a day with a lower range as usually consolidations will be followed by bigger movements
- avoid the extreme days, Mondays because usually it doen't move much and Fridays because they are the days usually with the big releases
- take action on the sense of the move above / below pivot
- low leverage

I have not tested your strategy but I will most probably do it as it makes sense.

The only thing that I didnt get from your original post was the time zone, you said "At 00:00 EST/23:00 CST (my time) / 14:00 GMT", EST is GMT-5 and CST is GMT-6 so I guess it is not 14:00 GMT but more 05:00 GMT
Eastern time is GMT -4 during the Summer.
I think he meant 4:00 GMT rather than 14:00 GMT.
  • #22
  • Aug 28, 2008 10:52am Aug 28, 2008 10:52am
Quoting Dezil
How do you calculate last week average?
And what indicator can i use for daily PPs in MT4?
I take the HH and the LL of the pair at 00:00 EST/4:00 GMT for the days M-F. I do not use Sunday's movement as it tends to be a market correction day or a low volatility day. It is very in consistent therefore I leave it out of the weekly average.

As far as MT4 goes I'm not the one to help you. I do most of my calculations by hand. I have MT4 open on a separate computer but I mainly use Oanda's platform for what I need on this system.
  • #23
  • Aug 28, 2008 10:55am Aug 28, 2008 10:55am
Quoting billbss
Eastern time is GMT -4 during the Summer.
I think he meant 4:00 GMT rather than 14:00 GMT.
Thanks for pointing out my mistake. 4:00 GMT is correct. I was thinking of the time when the order is no longer valid. I will correct the time on the first post.
  • #24
  • Aug 28, 2008 11:09am Aug 28, 2008 11:09am
Quoting jlpi
blueace, your strategy makes sense as a whole and that is not so often the case for strategies we see on the forum.
The points that I like are:
- wait for a day with a lower range as usually consolidations will be followed by bigger movements
- avoid the extreme days, Mondays because usually it doen't move much and Fridays because they are the days usually with the big releases
- take action on the sense of the move above / below pivot
- low leverage

I have not tested your strategy but I will most probably do it as it makes sense.
Thank you. I was striving to find a logical and simple formula for a system. It seems sometimes in trading the obvious answers are staring us in the face and we complicate it for no reason.

Here is a picture of what lead me in this direction. I noticed that very simply these PPs caused the market to react. I know they don't match up perfectly with PPs if calculated at 5 PM EST, but nevertheless they worked. Oanda's platform makes it easy to add the automatically calculated PPs.
Attached Image (click to enlarge)
Click to Enlarge Name: Picture 2.png Size: 20 KB
  • #25
  • Aug 28, 2008 1:05pm Aug 28, 2008 1:05pm
Hi Blueace,

What about taking the last 5 days movement average instead of prior week movement average? This way you will be considering prior days activities (like a moving average).

Think about it.

G
  • #26
  • Aug 28, 2008 1:35pm Aug 28, 2008 1:35pm
Quoting guibernaua
Hi Blueace,

What about taking the last 5 days movement average instead of prior week movement average? This way you will be considering prior days activities (like a moving average).

Think about it.

G
Using a rolling 5 day average might have something to it. It's worth backtesting at the least.

For a while I had added the rules that if the previous day had touched either the S1 or the R1 then the next day was void, as well as the current day must be an IB. These rules, while strict, provided a very high percentage winning rate. But as you might guess also kept me out of many trades.

In the long run using the correct R:R and the basic signal from the previous weekly average the outcome was a greater % earned.
  • #27
  • Aug 28, 2008 2:03pm Aug 28, 2008 2:03pm
The big flaw in this system is slippage on the "real" market. If you are waiting for a big breakout, especially after a news event, your stop orders will be slipped and possibly filling you at the worst possible price.

I note that the OP uses Oanda. Oanda does not slip your orders but they raise spread to 20+ pips on GBPUSD around news time.

Please comment.
  • #28
  • Aug 28, 2008 3:06pm Aug 28, 2008 3:06pm
Quoting FrankTheTank
The big flaw in this system is slippage on the "real" market. If you are waiting for a big breakout, especially after a news event, your stop orders will be slipped and possibly filling you at the worst possible price.

I note that the OP uses Oanda. Oanda does not slip your orders but they raise spread to 20+ pips on GBPUSD around news time.

Please comment.
slippage and inflated spreads are a threat to any system. this system, while it waits for breakouts, is usually covered by the market continuing well past the S2 or R2. Therefore the large spreads do not become much of a factor. As a matter of fact I have never been stopped out by an unnatural spread trading this method. The large spread is usually back to normal size by the time it hits the TP. or it even hits my TP with Oandas stupid huge spreads at times. lucky me

you are right slippage isn't something that I have to worry about with Oanda. but I would imagine even a poor fill would be overcome by the market carrying on in the direction of the trade. or as far as a stop goes isn't that something you have to worry about at all times when using a non-market maker?

This system isn't geared toward trading the news. just the fact that if there wasn't much movement the day prior; it lends itself to greater movement the following day. There are plenty of moves past the S1 and R1 that don't require major news to fuel them.

this is just a glorified straddle system that takes advantage of the market recognizing PP supports and resistances.
  • #29
  • Aug 28, 2008 5:07pm Aug 28, 2008 5:07pm
Hi Blueace did your short e/u get triggered. My 10 am candle had a low of 1.4706, S1 was at 1.4707, because of spread on my platform (2 pips) i think it would have missed on mine. But im not sure, sometimes i get confused with the spread.

Thanks again for taking the time to post.
Nick
  • #30
  • Aug 28, 2008 6:14pm Aug 28, 2008 6:14pm
Quoting 555ngone
Hi Blueace did your short e/u get triggered. My 10 am candle had a low of 1.4706, S1 was at 1.4707, because of spread on my platform (2 pips) i think it would have missed on mine. But im not sure, sometimes i get confused with the spread.

Thanks again for taking the time to post.
Hey Nick,

No my EU did not get triggered. It was close though. That is why I give a few pips of breathing room away from the S1 and R1. As you can see from today and as I have witnessed in the past anything triggered after 10 AM usually does not perform well. This is not a hard and fast rule. But more often than not it will just flounder around the S1 or R1.

So that does not give a great showing for my system this week with only one valid set up. But that one set up was a success.

E/U on tuesday for 38 pips or 1.5% depending on your MM.
  • #31
  • Aug 28, 2008 7:23pm Aug 28, 2008 7:23pm
Thats right i forgot about the 2 pip rule.


"So that does not give a great showing for my system this week with only one valid set up. But that one set up was a success."

Actually I think that was a great start, staying out of the market is one of the most important parts of trading imo. Im looking forward to testing this next week.
Nick
  • #32
  • Aug 29, 2008 3:59am Aug 29, 2008 3:59am
one more confirmation blueace.
As S1 and R1 are not symmetrical to the pivot but S2 and R2 are, it means that SL and TP distances are different for Buy and Sell orders.
So according to the MM rules you have different lot sizes for the Buy order and the Sell order, correct?
  • #33
  • Aug 29, 2008 10:19am Aug 29, 2008 10:19am
Quoting jlpi
one more confirmation blueace.
As S1 and R1 are not symmetrical to the pivot but S2 and R2 are, it means that SL and TP distances are different for Buy and Sell orders.
So according to the MM rules you have different lot sizes for the Buy order and the Sell order, correct?
you are absolutely correct. I figure out how many pips the TP is first. Then multiply by .667 to get my SL. Then divide my SL number of Pips by my 1% I am willing to risk and it tells me how much each pip should be worth. And they are very rarely the same on a pair due to the S1 and R1 distances being different.

Thanks for highlighting that for me.
  • #34
  • Aug 29, 2008 11:22am Aug 29, 2008 11:22am
Quoting blueace
The only Pair that qualified for a set up tonight was EU. The Daily range was 126.2 and last weeks average was 137.9.

Thks for sharing yr system. I don't understand the statement you made above. How do you use daily range and last weeks avg to decide if a trade qualify? thks
  • #35
  • Aug 29, 2008 11:41am Aug 29, 2008 11:41am
Quoting ronaldosim
Thks for sharing yr system. I don't understand the statement you made above. How do you use daily range and last weeks avg to decide if a trade qualify? thks
To determine the previous weeks daily average I take M-F ending at 00:00 EST HH minus the LL for each day and determine last weeks daily average. Then at 00:00 of the current week I see how much the pair moved for that day and compare it to last weeks 'daily average'. If it is smaller then it is a go for trading. If the pair moved more than an average day last week then you don't place a trade.

Hope that clears it up.
  • #36
  • Aug 29, 2008 2:24pm Aug 29, 2008 2:24pm
blueace,

how do you get the pivot points to show up as you do on oanda? when i apply them they look like bolinger bands. thanks.
Life is too short to have anything but delusional notions about yourself.
  • #37
  • Aug 29, 2008 6:08pm Aug 29, 2008 6:08pm
Quoting hoss
blueace,

how do you get the pivot points to show up as you do on oanda? when i apply them they look like bolinger bands. thanks.
yeah the ones that you add via 'add study' are extremely UNuseful. They make a mess and look like cave drawings due to all the very sharp lines. My nice neat clean ones are provided via the 'draw trendline' tab. As pictured below.
Attached Image
  • #38
  • Aug 30, 2008 6:33am Aug 30, 2008 6:33am
I like the system and wish I'd thought of it since - now that I think of it - it's really true that big moves follow days with narrower trading range, and like you say, they seem to be waiting for news. Were you "bottom picking" in pairs with the Pound first? Am familliar with the bad-trades-at-either-end thing. Time to login to a new demo.

Unfortunately, my PP's, S's & R's don't correspond to yours in the least. On Aug. 28th (I'm in Europe) my figures were different. The formula I have is:


R2= P+(H-C) = P+(R1-S1)
R1= (PX2)-L
P= (H+L+C) /3
S1= (PX2)-H
S2= P-(H-L) = P-(R1-S1)

This corresponds to the pip with my ###AutoPivot Indicator for MetaTrader 4. Tried to find a way to make entrances & TP's corresponding to yours using these S & R figures to no avail. Cannot figure out the numerical relation: my version vs. your version. Unfortunately ###AutoPivot Indicator is not adjustable as to formula to calculate. Have looked all through MetaQuotes Library for another indicator but except for ###AutoPivot they all have undesirable display quirks. So will have to calculate by hand.
  • #39
  • Aug 30, 2008 9:16am Aug 30, 2008 9:16am
Quoting brucewhain
I like the system and wish I'd thought of it since - now that I think of it - it's really true that big moves follow days with narrower trading range, and like you say, they seem to be waiting for news. Were you "bottom picking" in pairs with the Pound first? Am familliar with the bad-trades-at-either-end thing. Time to login to a new demo.

Unfortunately, my PP's, S's & R's don't correspond to yours in the least. On Aug. 28th (I'm in Europe) my figures were different. The formula I have is:


R2= P+(H-C) = P+(R1-S1)
R1= (PX2)-L
P= (H+L+C) /3
S1= (PX2)-H
S2= P-(H-L) = P-(R1-S1)

This corresponds to the pip with my ###AutoPivot Indicator for MetaTrader 4. Tried to find a way to make entrances & TP's corresponding to yours using these S & R figures to no avail. Cannot figure out the numerical relation: my version vs. your version. Unfortunately ###AutoPivot Indicator is not adjustable as to formula to calculate. Have looked all through MetaQuotes Library for another indicator but except for ###AutoPivot they all have undesirable display quirks. So will have to calculate by hand.
yup we all know what you get when you try to 'pick bottoms'...a sticky finger.

You're right to use a standard PP calculation. I'm just using 04:00 GMT. As my day's end and beginning. This system might be completely valid using other ending times. My broker just uses 04:00 GMT to start new daily bars so that was how I noticed it. I would be interested to know if the system is valid on a standard 21 GMT daily bar PPs.

Unfortunately without being able to adjust the indicator to different open/closing that means a lot of PP calculations by hand. Especially for backtesting.

It does not seem like it would be too complicated to have an indicator written that would figure out the PPs based on a day ending at 04:00 GMT and leaving them on the chart in a way that I have them on mine (see pic in attachements). I'm just not the guy to do it. I can't write code. So anyone that's an MT4 programmer...hint hint?
  • #40
  • Aug 30, 2008 8:18pm Aug 30, 2008 8:18pm
Brucewhain, and any one who might be interested, i found this pivot indicator for MT4 which allows you to enter a gmt shift. I cant remember where i got it but you can mess with it, might be what your looking for.

I found that when your on the hour that the pivot is set for you have to either go to a 5 or a 15 min chart and wait for the first candle to close in that hour for the pivots to register, or wait for the next hourly candle to close. Otherwise you will be reading the previous days pivots.

Any way that's what i got out of it, but i might be missing something, let me know what you guys find.
Attached File(s)
File Type: ex4 MultiplePivotsV2.ex4   24 KB | 516 downloads
File Type: mq4 MultiplePivotsV2.mq4   26 KB | 583 downloads
Nick
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