Forex pivot strategie. I'm going to explain how pivot points are calculated and show you 3 profitable pivot point strategies that you can use to take advantage of them.

Forex pivot strategie

Forex Pivot Points. How to use them effectively? - Forex Trading Strategy Q&A

Forex pivot strategie. I'm going to explain how pivot points are calculated and show you 3 profitable pivot point strategies that you can use to take advantage of them.

Forex pivot strategie


Pivot points are a vestige of the days before electronic trading that were calculated manually in the past by floor traders. Pivot points are still a key element of technical analysis to many traders today and many pivot point strategies exist to take advantage of these important horizontal support and resistance levels.

The first resistance R1 and support S1 levels from the pivot point can be calculated by multiplying the pivot point by 2 and subtracting the Low or High respectively. Finally, the third resistance R3 and support S3 levels are calculated by subtracting the Low from the pivot point, multiplying by 2, and then adding the High or subtracting the pivot point from the High, multiplying by 2, and subtracting then subtracting the Low.

Better yet, there are indicators for your trading platform that do the calculations automatically, like this pivot point indicator for MT4. Below are 3 profitable pivot point strategies. The examples are geared toward Forex traders but these techniques work in other markets as well. Other trading techniques that take advantage of trends and reversals, like those taught in Top Dog Trading or Infinite Prosperity , will also work well with these pivot point strategies.

A trading system like Day Trading Forex Live will not work for entry triggers with these pivot point strategies because it works off of very specific stop run setups.

However, price is more likely to reverse when pivot points line up with other trading signals, regardless of the setup. The pivot point bounce is a classic trading strategy.

The idea is that if price is above the pivot point, the market sentiment is bullish. If price is below the pivot point, the market sentiment is bearish. The pivot point bounce takes advantage of market sentiment, buying or selling if price retraces back to the pivot point which is historically a good horizontal support or resistance level.

In the example above, I used a morning star , which is a strong bullish candlestick pattern, as my entry signal. You can also use pivot points and the various support and resistance levels calculated from them for trend trading. The idea is to take advantage of retracements at significant levels after price has chosen a direction based on the pivot point. If price breaks through the first support or resistance level convincingly, and then retraces, you can buy or sell the bounce off of that resistance level.

In the example above, I used a bearish engulfing pattern , which is a strong bearish candlestick pattern, as my entry signal. Pivot point support and resistance levels can also be good places to take reversal trades. If price is showing signs of slowing down near the second or third support or resistance levels, these can be good places to buy or sell respectively — especially if these levels line up with previous market structure.

The idea is that, at support or resistance levels 1 and 2, price is likely to be extended. Since these levels are also typically good horizontal support and resistance levels they are great areas to look for reversal trades. In the example above, I used a shooting star with a confirmation candle which is how I prefer to trade them as my entry signal.

The entry was taken when price pulled back to the standard entry point. These 3 pivot point strategies are just a few of the many pivot point strategies that traders use to take advantage of these strong horizontal support and resistance levels.

In fact, regardless of which trading strategies you use, pivot points can be a strong addition — especially for intraday trading. Each level of your pivot point calculations can be significant on their own. However, these levels are particularly powerful when they line up with previous structure support and resistance levels in the market.

I hope you enjoyed these 3 profitable pivot point strategies. Be sure to backtest and demo trade any new strategies before live trading them. If you have any questions about these strategies or would like to suggest others, please leave a comment below. Are you still looking for a profitable trading system? I recently changed my main trading system after testing a new one for over a year. I read your reviews on infinite prosperity and DTFL, personally I do work full time, but I do have access to my phone so I can use MT4 during this time, to a reasonable extent.

I was just wondering which you think would best suit me? I used to have a contact form on the site but I got a lot of spam, so I got rid of it. You can always contact me on Facebook, but I really need to get another contact form up. DTFL is a lot more involved. I would normally recommend DTFL because of the community and ongoing support, but I think it would be very difficult to trade the system correctly on your phone at work.

There are pros and cons to it. Sorry for the long response. I hope this helps you, though. Hi Chris — thanks for the notes on Pivot Point strategies. Warm regards from South Africa Sylvester. Thanks for the comment.

Hi Chris, Thank for your insight on these strategies. May I know which time frame will you base these on? I see it as either getting in early or late and thus also the SL being more or less. I trade on 15M to 1D time frames. Everything is more significant on the higher time frames.

Plus, the spread is a smaller percentage of the trade cost on higher time frames. Traders generally trade the lower time frames to get more trade opportunities. The exception is trading systems like Day Trading Forex Live , where we use the 15M time frame to get a more detailed look at how the smart money is moving the market. That being said, if the market is going to move as you predict, you will typically get a better buy or sell point on the lower time frames, like you mentioned.

Notify me of followup comments via e-mail. You can also subscribe without commenting. Rules Long Short Entry If price is above the pivot point, has moved away from it, and has retraced to back to it, buy the bounce off of the pivot point. If price is below the pivot point, has moved away from it, and has retraced to back to it, sell the bounce off of the pivot point.

Stop Loss Place your stop loss below the lowest low of the bounce off of or near the pivot point. Move your stop loss to breakeven before price reaches your first resistance level R1. Place your stop loss above the highest high of the bounce off of or near the pivot point.

Move your stop loss to breakeven before price reaches your first support level S1. Take Profit Set your take profit to 2x your risk, or take partial profits at each resistance level, closing at R3. Set your take profit to 2x your risk, or take partial profits at each resistance level, closing at S3. Rules Long Short Entry If price is above the pivot point, has broken above and moved away from the first resistance level, and has retraced back to that level R1 , buy the bounce off of R1 which acts as support.

If price is below the pivot point, has broken below and moved away from the first support level, and has retraced back to that level S1 , sell the bounce off of S1 which acts as resistance.

Stop Loss Place your stop loss below the lowest low of the bounce off of R1. Move your stop loss to breakeven before price reaches R2. Place your stop loss above the highest high of the bounce off of S1. Move your stop loss to breakeven before price reaches S2.

Take Profit Set your take profit to 2x your risk, or take partial profits at R2 and close your trade at R3. Set your take profit to 2x your risk, or take partial profits at S2 and close your trade at S3.

Rules Long Short Entry If price has moved strongly below the pivot point to the second or third support level S2 or S3 , buy the bounce off of S2 or S3.

If price has moved strongly above the pivot point to the second or third resistance level R2 or R3 , sell the bounce off of R2 or R3. Stop Loss Place your stop loss below the lowest low in the bounce off of S2 or S3. Move your stop loss to breakeven before price returns to either S2 or the pivot point depending on where you took the trade. Place your stop loss above the highest high in the bounce off of R2 or R3. Move your stop loss to breakeven before price returns to either R2 or the pivot point depending on where you took the trade.

Take Profit Take your profits at 2x your risk, or take partial profits at S2 if you entered at S3 and S1, closing at the pivot point. Take your profits at 2x your risk, or take partial profits at R2 if you entered at R3 and R1, closing at the pivot point.

Chris November 2, Hey Myles, No problem. Sylvester January 28, Chris January 28, Canman March 13, Chris March 13, Canman March 14, Many thanks for sharing Chris. Chris March 15, Add Comment Cancel reply Notify me of followup comments via e-mail. If price is above the pivot point, has moved away from it, and has retraced to back to it, buy the bounce off of the pivot point. Place your stop loss below the lowest low of the bounce off of or near the pivot point. Set your take profit to 2x your risk, or take partial profits at each resistance level, closing at R3.

If price is above the pivot point, has broken above and moved away from the first resistance level, and has retraced back to that level R1 , buy the bounce off of R1 which acts as support. Place your stop loss below the lowest low of the bounce off of R1. Set your take profit to 2x your risk, or take partial profits at R2 and close your trade at R3. If price has moved strongly below the pivot point to the second or third support level S2 or S3 , buy the bounce off of S2 or S3.

Place your stop loss below the lowest low in the bounce off of S2 or S3.


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