The Dollar Cost Averaging Pivot Point Trading Method

Good luck with that one

Thanks for throwing some luck my way on that ... . Need it to get out of the position, I think ... .

On the Demo Side:

So, I've been banging the drum on going long the Ruble for quite a bit now in the USD/RUB thread (positive swap, historic highs, all that jazz), so I thought I'd dive in and fashion an entry order on the demo side. Unfortunately, I don't think it will revisit the level I have as an entry soon (but you never know ... ).

On the Live Side:

Still waiting for that USD/RUB short to clear ... . Snore.

But I still have that EUR/JPY short grid in place while I'm waiting. Here's all my penders for that as of right now:



You'll notice a gap at 142.750, which I'll fill in if price takes out another grid level either higher or lower, but it's still moving pretty much sideways ... .

The average sell price for the net position is 142.666, so I'm basically break even for the net position, but will peel off four legs at 142.399 if the opportunity presents itself.

I filled in the gap at 142.750, only to have it execute (what can I say, the pair likes that 142.750 level), bringing the net position average sell price to 142.679 (consisting of 13 microlegs).

I will peel off 4 legs via entry order to buy 4 micros at 142.399. ... And then another 4 with an order to buy at 142.150 ... .

Zowie kapowie! EUR/JPY went higher overnight, which is not necessarily a bad thing, and now the position has 19 legs in it and an average sell price of 142.952. Because the position is reaching the limits of how big I'd like it to be, I'm going to bail out of the entire net position at +10 pips (at 142.852) and then either reload or switch to a 10 pip directional grid below the average sell price.

On the Live Side:

Unfortunately, I did not see 144.00 + for EUR/JPY in my crystal ball ... . But U.S. holiday trading can be awfully odd sometimes ... . So I'm going to stand aside from adding any more positions for the time being and wait for things to sort themselves out post-Holiday and have a gander at the situation then ... .

On the Demo Side:

I tweaked a few things earlier in the day, but as you can see, things have been slow this week, with virtually no new positions added (or TP's struck).

Happy Veterans' Day!

On the Live Side:

Current Open Positions

EUR/JPY short at 143.254/TP 143.154 w/10 pip grid below.
USD/RUB short at 44.569/TP 44.469.

Notes

That USD/RUB short is holding up my parade a little bit, but the position made some positive progress today. At this point, I just want to get out of the trade at basically breakeven so that I can devote my time to more quickly productive trades; the pair is a margin eater and probably requires more patience than I really have. Sometimes I just prefer getting problematic trades closed out before moving on, since you see them every time you open your trading platform, and it can be a downer. Nevertheless, it brings a welcome break to things just to have a couple of trades ... .

As far as the EUR/JPY grid trade is concerned, I would say that I prefer the x-pip (x being the number of pips for each grid level) grid below if you're going short or above if you're going long and then dealing with any dangling trade by ZigZag indicator inspired additions or any other reasonable method that moves the net position price closer to current price. (I noticed that I had difficulty setting up a grid this way in MT4 as compared to Trading Station, which is kind of a bummer if I want to use this method with MT4 ... ; it is entirely possible that, being an MT4 novice, that I just don't know what the hell I'm doing.) In this way (grid below price for shorts/grid above for longs and exiting each level as price strikes, for example, +10 pips), you don't get caught in a large position consisting of a large number of small legs, but rather just one dangler.

Naturally, you won't catch all the movement with such a system and you're arguably repeatedly cutting your profit short, but to me it's more important to limit exposure if price suddenly moves against you than capture all the possible profit you can, for example, by just making a single entry at the top or bottom of the range or in the direction of the trend. Moreover, you lock profit in as you go without the prospect of price never hitting the TP you've set ... .


On the Demo Side:

I had a bit of fun last night scalping EUR/JPY (due to boredom associated with my live and the fact that not even much was happening with the demo). But these trades represent a good example of a MT4 grid trade (selling at levels above current price, with a set exit for all positions which in this case was based on a ZigZag low):

Attached Image (click to enlarge)

(You'll note I had a couple of losers in there; I tweaked the TP based upon the 1H ZigZag after the losing entries had executed, not paying attention to the fact that the TP level was above a couple of the entries ... .)

Three other trades were in and out in less than 12 hours, which is always nice ... .

At this juncture, since I've only got two trades open, I am going to clear all the penders and then reset them with .14 lots given the fact that I've cleared the 56k mark ... .

Not much going on this week ... . The market seems to have been lulled into an eerie calm ... . On the live side, still waiting on my USD/RUB short to resolve itself, as well as my EUR/JPY short which started out as a grid trade, after which price popped up to between 145 and 144, where it has kind of wandered for the past several days ... .

You can kind of see the effects of this market lull on the demo side ... . Very few entries, which I think has something to do with Euro crosses generally. Looking at the charts it appears that many Euro pairs on the verge of breaking lower or have broken slightly lower; my entries are based on ranges that were in place up until last week and many of those are now some distance from current price action. One of the exceptions is EUR/GBP, which popped up in response to Cable weakness ... .

Off to tweak entries on the demo ... .

I've looked at all of the pairs that I have pending orders currently and, believe it or not, I didn't add orders to any of them ... . Virtually to a one, there is no new "3" level on the 3-Level ZigZag Semaphore indicator I use as a template in my MT4 to take advantage of other than the ones I've got currently set. As I indicated earlier in the week, the vast majority of these pairs are in one range or the other, and now (with a couple of exceptions), the vast majority of the pairs are at the bottom of the ranges that have been in place for several days or weeks ... . I don't want to short those from these levels, but will wait until they revert to their previous ranges or show something to indicate that the days for those ranges are over ... .

One exception, though, is EUR/GBP, which has popped up substantially due to Cable weakness ... . So with that one, I have "gridded" EUR/GBP (for the lack of something better to do), with my TP for all these entries being slightly north of .7800:



If you're of the more patient variety, you may want to wait it out to short at the high "3" around .8040, shown on the 4H here (far left):

One of the more interesting weeks I've had as of late ... . Not a single pip locked in on the live side, primarily due to my focusing on my USD/RUB short carry and (now) on my ill-advised EUR/JPY short (at least at this point in time) ... .

And my late-week wading into a EUR/GBP grid trade has battered pip gains on the demo side with a late-week Euro rally which could make next week doubly interesting since the question will be whether this is the correction we were waiting for in the Euro, a mere pause in Greenback strength, or something else ... .

While, I've got all weekend to ponder ... .

this is one of the best threads on the forum but it has not caught anybodys atention yet, very wierd..... i must say i hate reading, hate it with a pasion and this thread is so technical and that stuff bores me but i will take time to read everything here, i will force myself.

Well, I hope that some of it is helpful ... . It is an effort to throw ideas out there that I've experimented or am experimenting with in an effort to develop something I am comfortable with ... .

Originally, the thread was primarily devoted to the use of pivot points, but I've more recently been using the ZigZag indicator, and -- on occasion, directional grids. It seems to me that all of them have their various merits, but I haven't decided yet which one I like best (I continue to gravitate toward the ZigZag, but it appears to require a degree of patience if, for example, you're using the ZigZag on the 1H; even then, it seems like you need to expect to spend 3-5 days in a trade ... .) A common theme, though, is the taking of multiple, smaller positions at different junctures in a pair's trajectory, rather than a single, one-time entry ... .

Tweaked a few things on the demo side ... .

On the live side, going to hold out for JPY data later this evening to assess my EUR/JPY short position and, yes, still in that USD/RUB short for (now) six weeks ... .

i will be a regular on this thread!!!!

Awesome ... .

It's been such a weird week that I'm going to go ahead and lock in profits on the demo as a basket ... .

I will tweak entries shortly ... .

Unfortunately, I finally had to bail out of my USD/RUB short for a loss. Great swap going on, but overnight, the broker increased the MMR from 50.00 to 125.00 -- too rich for my blood ... .

Oh well, I pretty much knew that that particular trade could have been the best of the year or the worst ... .

Now that I've shed myself of that USD/RUB short (sheds a tear), back to basics on the live:

Current Open Positions

EUR/JPY Short at 143.504/TP 142.25

Penders



Notes

The live entries pretty much mimic what's in the demo, with the exception of the EUR/JPY short, which is now a multi-leg, long-term proposition with an ambitious target that is now some 400 pips below current price.

Closed out that EUR/JPY short at a loss and deleted all penders ... .

Currently only have a EUR/USD short at 1.25333/TP 1.25233.

My plan is to use the live to scalp; the demo to look at longer-term propositions. I think it really helps to have two separate accounts: one for short-term stuff and one-for long-term stuff. That way you can still scalp or intraday trade pairs that you've already taken positions in. This would not be necessary were I not subject to FIFO/anti-hedging rules ... .

I'll probably get things set up this way at the beginning of the new year ... . I still consider this first year of trading my "education."

I've tweaked the demo a little bit, adding orders here and there ... . Looking slightly battered right now, but now particularly worried (unless for some reason I have problems getting to the six percent by the end of the month).