Trading using two pivots

Forex: GBP/JPY, trade briefing (4h time frame)

The pair have produced another unsustainable break-out, after positioning itself over the 169.68 (upside bias) and had confirmed by placing itself over the mini-resistance (yellow rectangle). The loss was pretty big and therefore after the loss of nearly 340 pips and a significant balance decrease I've decide to close partial profit from the other two profitable trades, leaving only a 0.1 lot for each of them open. Also, for preserving the remaining capital, concern that should be in your target too, I've decided that, from now on, the lot I will trade will be as little as 0.1 and I will double it, only when the trade account doubles and the trades that should be taken when the price confirm a setup in a neutral bias - I will avoid them, because of the tight money management which I had chosen.

Forex: AUD/CAD, short term outlook (4h time frame)

Upside potential

Apparently, the pair moved up and down as wanted but if you take a look closer the things are very clearly. The price entered in the upside bias first time on 10th January 2014 and soon after came back into the neutral bias, oscillating back and forth few times. It might seem unusual but it isn't because every time the price entered the neutral bias haven't the power to go lower, into the downside bias, under the 0.9578, the pivot which separates the the neutral bias from down bias. The price left only spikes of the candle which pushed higher when reaching the near-zone of the 0.9578 pivot, as a testimony that buyers have some control in that area. And as you imagine, yes, the price got into the upside bias, once again. The decisive moment for the bulls to take full control of the price it will be only when the price reach and close over the mini-resistance area, 0.9866-0.9900 area, as you can see drawn on the picture as a light green rectangle.

The question is when.

And when it does that the immediate temporary high of 0.99636 should be easily targeted.

Forex: AUD/USD, trade briefing (4h time frame)

Given the fact that the pivot's configuration was changed significantly, now I moved the S/L on the level where is positioned the pivot which separates the neutral bias from downside bias, on 0.8836 from it's previous location of 0.9160 (gaining as much as 324 pips just moving it, in case the price returns without any alert), now it's a 24 pips value, we'll see what will happen. (if you want to see the previous AUD/USD's pivot configuration go to the post no. 18)

Also, because the previously mentioned pivot has modified dramatically the new T/P is located on the temporary low of 0.86589, offering to the transaction a more realistic target in line with the change of the pivots. The other pivot changed too, but it doesn't have any implication in our trade, but it will be use in a following analysis.

Forex: AUD/USD, trade briefing (4h time frame)

As I've mentioned in the last post, the market condition has been changed so the pivots. Last night, the short transaction, which I've changed the parameters (s/l and t/p) took a 24 pips loss on stop-loss. So, now, cause I've decided not to trade the neutral bias zone, I'll wait for better opportunities, when the price will go either on the upside bias zone or back to downside bias zone.

Chapter 2

(the missing piece)

Planning and execution

To be honest, the execution of this trading style was always a big problem. Because I used to enter short or long whenever the price came into one bias zone or another without any other confirmation, and that wasn't the proper way of approach. At the beginning, I've been observing that the transactions taken based on the price entering the neutral bias zone weren't that accurate as I've expected. A lot of stop-losses taken, some closed on limit and then continued the initial movement (that I was into) - in on word - FRUSTRATING. Then, it appeared few situations in the other two zones - both upside and downside bias zones. And in the moment I've decided to clear the dust from this topic, I have realized that I need something more - A SOLID CONFIRMATION!

I needed an extra level or zone, by whose violation, the trade taken should have a better chance of survival in these strange market conditions. I'll put an example bellow, the AUD/CAD pair. Enjoy!

Let's take any pair, let's say AUD/CAD, it's not random but I don't have any good example in mind, wright now.

As you can see the pair broke 0.9736 pivot level, positioning itself in the upside bias zone.



The trouble in this example, as I have mentioned in few previous posts are the multiple hesitations of the price. If you, for example, have taken buy every time the price closed above the 0.9736 level you would have three losses, so far, summing nearly 100 pips.



This issue would have been solved with an additional zone, on which violation we will have a more solid transaction. So, in this case, I drew a zone where the price encountered problems in the both in the recent past and in the distant past. And I will wait for price to close above that zone for confirmation that my trade would be more stable that in the past.

In this case, we'll wait for a close of the candle above the 0.98968 level for targeting the temporary high of 0.99636 level.

Forex: AUD/CAD, trade briefing (4h time frame)

The pair struggled to go upside but, finally, after numerous attempts, the price broke the last resistance (the magenta rectangle). As you could see, the price was already situated for some time in the upside bias zone but without any confirmation it was in vain. But now, that the last resistance was broken I expect the pair to go to 1.00835 (127.2 Fibonacci level of the extension measured on the upside movement 0.94079-0.9939) because I have any peaks in the left side of the chart to use as a target. The stop-loss it's placed on the pivot value of 0.9736, - it's a wide enough to let the trade breathe if needed.

Forex: AUD/CAD, trade briefing (4h time frame)

The pair has risen slightly since the last market analysis. The reason for this intervention is that the pair's configuration has been changed few days ago, the fact that the price has developed a valid new support level, on the 0.9824 level and that's the level where it will be our pivot, from the previous one of the 0.9736 (gaining 88 pips only positioning our stop-loss on that new formed level). The other pivot level (the one that separates the neutral and the downside biases) and the trade target (1.00835) remain unchanged; and if any change in pair's configuration or if the price will hit the previous mentioned I will do a short brief as soon as possible.

Very Interesting, I think the 3 Color Zone will help trader in good way, are you drawing those 3 zones yourself? and how you draw it? thx

The sole purpose of the indicator is to help the trader see the zones (not to construct them automatically), the two pivots are drawn manually and the zones takes shape immediatelly. But to understant better, start reading the topic from the beginning and if you still have unclear thoughts, reply once again. Cheers!

The trade took the stop-loss and lost 92.5 pips after sky-rocketing. We had a little bit of bad luck by moving the initial stop-loss because the 3-4 pips lower could be generated about 400 pips on profit.

The good entry and the patience produces good results on this pair, 337.8 pips, after a painfull developing of the price. Innitially the price almost hit the target and reversed to almost zero profit in a apparent three-wave correction, then finally took the T/P. The lesson I learned from this pair is even the chances are sometimes near zero, you have to stick to the innitial plan, cause, unless you do that it's worthless.

Hy fellows, if you have preferences regarding the financial instruments to be analyzed on this topic please fill the poll from the first page of this topic. Have a nice day!

And here comes the first analysis and trade, given by the poll you've just submitted.

GBP/USD, short term analysis and trade setup (h4 time frame chart)

The pair struggled to stay over the 1.6700 pivot level in an apparent chaotic sideways movement (intraday movement) and yesterday has given the real push of the hole upside mechanism, the one which triggered massive buy orders (the rising star aka pin bar). The price was still situated in the upside bias and needed only a confirmation for entering buy. The confirmation was given when the price closed above the pink rectangle, a very turbulent zone - which had happened after all. The entry should be on the close of the bull candle but I've obtained a better position because, at the time I've seen this setup, the price decreased a little bit, so I've gained as much as 14 pips from the movement of the price. The S/L it situated on the 1.6700 pivot level (94.1 pips) and the T/P is situated on the high of 1.68192 (25.1 pips). It's not a great risk-reward, only 0.26 but it's a chance to cash some profit.



Enjoy!

Forex: EUR/USD, short term outlook

On the Euro, all depends, for starters, if the price will remain in the upside bias, closing over the 1.3819 pivot. Currently the candle it's a little bellow that pivot, but will see how it plays. Secondly, if the price remains in the upside bias, comes the question: will have power to close over the 1.3819-1.3904 zone, a very difficult zone from whose upper limit the price rejected to the current level. However, the descent under the 1.3819 pivot it is not a solution for eventually sel trades, because the time frame it's too small, we will keep an eye only for a brake above the above mentioned area, as the blue arrow suggests.

The pair has risen and hit the 25.1 pips target.

Forex: EUR/JPY, short term outlook

Currently the pair is situated in the neutral bias (which represents the zone between the two pivots) so the price, theoretically have chance to devellop in any direction - up or down.

Upside scenario

If the price breaks the 143.16 level and situate itself in the upside bias zone and then closes above the 143.16-143.78 zone (violet rectangle), not a very powerfull zone, the pair could go to its maximum level of 145.675 and gain easily over 100 pips, depending on which level will close the confirmation candle, as the blue arrow guides.

Downside scenario

On the downside, firstly the price will have to situate under the 140.21 level and confirm it's intention by breaking bellow the 140.21-138.66 (bluish rectangle) - a very attempted zone if you watch carefully the historical reaction of the price in that area, the immediate target would be the 136.219 low.

Risc-ratios:

Bullish scenario will probably have a better risc ratio because of the thin confirmation area (violet zone), the stop-loss would have at most 100 pips, so the probabile ratio would be 1.5.
Bearish scenario will be a little more disadvantageous because of the wide confirmation area (bluish zone), the stop-loss would have at most 200 pips, so the ratio would be only 1.
That doesn't mean that the bullish scenario will develop for certain or that you would have to follow only bullish oportunities - not at all. That means that you need to adjust properly your lot size, depending on what scenario will materialize.



Have a nice day!

Forex: USD/JPY, short term outlook

If you just traded some lots and you made profit from it, without having rising blood pressure while doing it - you are a truly trader; because lately USD/JPY behave itself like a roller-coaster. As soon as I've opened it's chart and drawn the pivot lines, I keept saying "Oh my..." because I haven't seen so much chaos in a chart since almost never. But since you asked me to put this pair in the analysis backet I will warn you about its current situation.

Upside potential

Currently the pair is situated in the neutral bias, close to 102.69 pivot which separates the neutral bias zone from upside bias zone. Even if it breaks to the upside bias, by closing over 102.69 - it's far from the level which should give a good percetage development of the price to the upside. Why's that? Well, the zone which will have to break to confirm better its intention it is a 233 pips range. By closing 105.02 level will confirm the upside plan to get to the maximum of 105.432. And please: don't get long before that upper range to be exceeded, it's a great chance your stop-loss to be hit before the price to goes higher! Ussually I don't make this kind of alarm but now the situation asks it.

Downside potential

If it break bellow the other pivot - 101.19, the price should develop clearly. There is not any zone to be confirmed (which is kind of rare, actually). The initial break it's both intention and confirmation and should easily go to it's minimum of 100.747, not a great target but at least you don't need heart peacemakers and so on.



Happy Easter!

Commodities: XAU/USD, trade setup

The gold has continued to go lower, after breaching the 1303.89 pivot level and passing into downside bias zone. Then confirmed its intetion and broke the inferior limit of the 1303.89-1292.95 zone. I've entered after a little comeback of the price, on 1289.518 and I've put the stop-loss level on the 1303.89 pivot level, targeting the low of 1277.575, as the red arrow suggests.

Commodities: XAU/USD, trade setup (trade closed)

After a minor correction, the precious metal has decreased in price during the New York Session, especially, making a total profit of 11.7%, after touching the minimum of 1277.575.



Have a nice day!

Forex: USD/RUB, medium term outlook



I recommend using 720p(HD) setting for more clarity of the image.

I put a French translation too (in the Caption menu), as far as I've got it , cause I've seen there are some guys from Canada who are watching my analysis.