Trade using Just Pivots

I have been in hiding for some time after somehow losing my confidence for a bit. I did some soul searching trying to figure out why I go thru months of profitable trading followed by weeks of disastrous trading. My searching turned up a few things:

 

1. my best trades were always done by 11AM CST
2. my best trades used only support and resistance
3. my best trades never risked a whole lot
4. my best trades were initiated near pivot points

My best trades were with corn a few years back, so I went back and reviewed some of those trades. It turns out corn was in a bull run and all of my trades were long initiated at S1. The only markings on my charts were Pivot Points and I was only taking long trades at S1. Hmmmmm.....

So, to make a long story short I cleared my charts off and decided to start trading the pivots again. Here is the game plan.

Currency Pairs
Only trade pairs with spreads lower than 2 pips. Because my stops are going to be fairly tight, anything greater than 2 pips could cause problems. So for starters I am only going to be looking at EURUSD, EURJPY, USDCHF and GBPUSD (2.1 spread on OANDA but close enough)

Determine The Trend
For this strategy we only want to trade with the long term trend and to determine the long term trend I will use a daily chart although 3/4 hr chart works too. Draw a simple trend line.

Draw Pivot Point Lines
Anytime after 5pm EST. I'll grab the OHLC for the day and calculate tomorrow's pivot points. Once calculated - simply draw them on the chart.

Plan The Trades
Now it's time to plan tomorrow's trades.

If the trend for the pair is down, we will ONLY be looking to short around R1.

If the trend for the pair is up, we will ONLY be looking to get long around S1.

Write down the planned trade zones and get some rest! Tomorrow its time to trade!

enochben, thanks for sharing.

would you please upload a screen?

how long do you use this technique?

I'll look for some charts to post and will try and post some as the trades set-up.

How long have I used this system....hmmmm....

On and off about 4 years. It is a VERY Boring and UNSEXY way to trade, so I often lose my way and drift into adding other indicators to make myself feel like a made for TV trader.

Ok, here is a trade I missed this morning on EURUSD. First chart shows a shooting star just shy of R1 and second shows the drop back to the pivot point a hour and a half later.

I am currently looking at trading this for pairs GBP/USD and EUR/USD .... 2am - 8am est ... should work for other pair however ideal trading times would have to be determined


Timeframe - H1 or Daily
Smoothed MA - 3, 7, 10, 14
RSI - 21 (levels 35, 65)
Fractals - (default)
Optional - Daily pivot (H1)

I understand that indicators are lagging, however they are mainly there for visual confirmation for trend - overbought/oversold ...

currently using on FXDD charts ... gmt +3

template attached ...

Hope this does not deviate from thread, if it does just ignore.
Thanks

Good way to trade....pivots give you a good indication were price will reverse. You might not have trades using this system everyday but these type of trades are very safe...

As a beginner to the complicated world of Forex Trading - well we all have to start sometime ! - I was reading about the importance of Pivot Points and S and R just last night and so was intrigued by your Thread , Ben. There is plenty of good advice contained in your thoughts and I thank you. Is it possible to draw the trend lines on my Laptop and also S and R lines and Pivot Points ? and if so ,how ?

Have you tried the AutoPivot indicator?
It automatically plots daily,weekly,monthly Pivots with S1/S2/S3 and R1/R2/R3.
It could be helpful.

I like to calculate the pivots myself - it is an exercise in discipline for me and helps me feel the price action. I have to actually read and input the open high low and close every day so I get a better understanding for whats going on. Might sound crazy, but it works for me.

Can't help you with this. :-)

The pound had a nice setup during European session...

EURJPY is in down trend for about 2 weeks...

Overnight, price went above R1, but was not able to sustain or reach R2... note lower highs...

Short the failure at R1...

enochben,

THV system has a good daily pivots custom indicator. i use pivots, but set starting at 8pm est. http://www.forexfactory.com/showthread.php?t=127271

Add to the rules:

 

1. NEVER Trade or USE data from Sunday nights. If you trade Mondays, use OHLC from Friday.
2. For Optimal results - trade the VIRGIN approach to any pivot.

:-)

I also trade using pivots.
It's part of my routine now for a couple of years.

However I not only plot the technical pivots, I also draw lines (Support and Resistance) for pscicological numbers (round figures, etc) and for historical points of resistance and support, looking back as far as 3 years.

I helps a lot on the decision making process.

Cheers.