February 2018 - Pivot Point Trading

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Feb 11

2018-02-11_gold-yearly-pivot

Why should you check yearly Pivot Points

Welcome to pivot point trading blog

Hi, Simon here. I’m the author of Pivot Point Trading blog.

The goal of this site is to show you different strategies and trading techniques based around pivot points.

Pivot Points can help you to improve trading results and I’ll teach you how to do it.

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Recent Posts

Speed up your manual backtesting and find best strategy – a simple tip!
Pivot Points to catch bottoms? Reversal trading and Pivot Points
Price action and pivot point trading – complete guide
Extreme S2, S3, R2, R3 pivot levels as target/entry
This SP500 chart shows why I love pivots

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Recent months have seen strong moves on most instr

Recent months have seen strong moves on most instruments. That's why now it's especially worth having monthly pivot points on the chart.
If you use TradingView the Pivot Points are built in. If you are using Metatrader4 you have to download a separate indicator.
Below EUR/USD chart. As you can see in the last few months the levels from monthly pivot points were super accurate. You can always use them either to open a position or to take profit.
In the near future I will give you more examples

#eurusd #dollar #euro #swingtrading #tradingtips #tradingplan #tradingeducation #tradingsetup #fxtrading #forexindicator #forexcharts #forexstrategies #forexlearning #investor #investing #pivotpoints #forexanalysis #forexmarket #forextrade #forexeducation #forex #forextrader #forexprofits

Change the way you look at trading. Treat it as a

Change the way you look at trading. Treat it as a job not casino. It will help you to survice as a trader and to achieve better results.
#tradingstrategy #tradingplan #investing #investor #forexmarkets #forexinvestment #forextradingtips #stocktrader #tradingstocks #tradingpsychology #tradingsystem #fxtrading #daytrading #forexeducation #forexstrategy #forexstrategies #swingtrader #tradingforaliving

Don't overstay your welcome. Sometimes that's also

Don't overstay your welcome. Sometimes that's also true in trading ;) Let's say that you've opened a trade and there was some news or unexpected events. We have plenty of them recently. You feel lucky because you're on the right side of the trade. You watch how your position is growing to 100-200 pips in profit.

That's great. But where to take profit?

I was making the same mistake over and over again. When I caught such a strong and unexpected move I tried to keep it open as long as possible. I hoped that this was the start of some opposite trend movement and I can catch some really big fish. In the end, I was usually giving away my profits because traders were taking profits and there was a move against me so I was closing the trade with the small portion of profit left.
The way I trade it now is simple. I look for a reaction of price and pivot points. It may be 3rd support or resistance line from daily Pivot Points. It may be another line from weekly or monthly Pivot Points. Depends on the situation in the markets - sometimes you will see that price is not reacting with daily pivots at all because the trend is so strong. In that case, you check weekly and monthly Pivot Points.

This USD/CAD is a good example of that. You can see that during a strong sell-off on Friday there was no reaction with S1 and S2 support lines. But when the price came down to the S3 we could observe some profit-taking - there was a reaction from the price. That S3 level was working. It was best to close the position here. You can see that next trading day there was a move up.

And as always, you can take profit and reenter a move it there will be a continuation :) But the most important part is to protect your profit.

#USDCAD #pivotpoints #swingtrading #daytrading

That's interesting. 4 days in a row ➡️ R1 line

That's interesting. 4 days in a row ➡️ R1 line from daily pivot points is working as a resistance for the EUR/USD.
That's something that you will see from time to time in FX, stocks and other markets. Simply, there is no momentum, we're observing a range movement and price has a problem to go above R1 or below S1 lines.
If you see that behavior it is best to mark down that range and wait for the breakout 📈📉 On the chart, you see daily pivot points and 1-hour time frame but the situation can be similar if you are trading with weekly or monthly Pivot Points. If you see that there is no clear direction and price is bouncing from the nearest S and R lines, simply wait it out.

What's next for the stock market? When we check S

What's next for the stock market?

When we check SPX monthly there is a possible resistance zone forming around 3000 level (you can see that during the last 3 months each move above 3000 points ended with selloff). I marked that with orange.

There is also a massive divergence from RSI, marked with green and red trendlines.
Let's see what market will do next with that orange zone but it looks like selloff from here is possible. On lower time frames such as daily and weekly we can find support trendlines - break below them will be a confirmation of bears taking control.

#spx #trading #stocks #sp500 #stockmarket

AUD/USD, 4-hour time frame and long entry. I like

AUD/USD, 4-hour time frame and long entry.

I like this setup. You see that price reacts with monthly pivot line and you can expect some reversal move or smaller correction.
You see it from time to time.
BUT... It is not like every touch with monthly pivot ends like that.

The crucial part is to watch if price reacts with that level (it is best to check a few time frames, especially higher ones which give you a clearer picture). If you see that price reacts with monthly pivot (or any pivot level) you can expect some reaction and you know that correction/bigger reversal move is possible.

In that case, my long entry was on the lower, 1-hour time frame. Based on price action I saw that after a strong move down monthly pivot worked as support. After simple confirmation from the breakout above the temporary trendline, I went long.

Clear stop loss levels (below monthly pivot) and a lot of space to go up.
Nice and simple.

#audusd #forex #pivotpoints

Short on Oil (WTI futures) right below weekly R3 l

Short on Oil (WTI futures) right below weekly R3 line.

I mentioned Oil in previous post. After attacks we saw that huge gap. This was unexpected news but still price was stopped around that 3rd resistance line from weekly Pivot Points.

Guess what was also around 62 dollars? Monthly R2 line so a nice confluence of these R lines from weekly and monthly pivots.

After some smaller sell-off there was a retest of that high from first candle but without success. Later another try to move higher stopped clearly at weekly R3 line. From that place we saw a strong move down.
My short trades were open based on 15m time frame (there was a break below trendline after R3 retest) but my analysis was made on 1-hour and higher time frames.
This example is very interesting because it shows you that even during unexpected news and nervous reactions on many times you can rely on Pivot Points.

#pivotpoints #oil #wti

Checking higher time frames can give you interesti

Checking higher time frames can give you interesting information. Here's an example of USD/JPY weekly chart. You can find zones and trendlines which are respected by the price.
For example, lately, we saw a correction down to 105 level. From here there was a bounce. You can spot that this was a place where you had a support zone and trendline. A good place to open a long trade with a good risk-reward ratio.
Is USD/JPY going higher? Will next trendline be a target? We will see.

For now, I wanted to post this chart more as a reminder that higher time frames can help you to find great setups. It is a good idea to check them regularly. I'm guilty of not doing that lately (markets were slow during summer so I got lazy ;) ). It's time to go back to good habits :) #forex #trading #dollar #yen

How to improve your strategy? Work on specific par

How to improve your strategy? Work on specific parts.

Here's what I mean.

You can take part of your strategy, backtest and improve it.

A quick example.
My best trades come from reversal moves. I know that R2, R3, and S2, S3 lines from Pivot Points, especially weekly Pivots, can work a strong reversal zone. In the past, on many times I was right but my trades haven't reflected that.
I was making many different mistakes when I was taking reversal trades around these R2, R3, S2, S3 levels.
I started backtesting different modification to my strategy specific to these entries. Eventually, based on many tests, I managed to write down the best set of rules for entry, stop loss and take profit targets. It took me some time and testing to achieve that but I really was able to improve in that area.

Why this approach works? If you backtest your whole strategy then you're probably trading many different scenarios - breakouts, reversals, trend movements and so on. That's fine. Still, as a result, you get information about your trading plan's performance as a whole. Maybe there are elements that you can improve? Are you taking too big loses during breakouts? What about trades based on popular patterns?
If you take only that one specific thing from your strategy, it will be so much easier to improve that.
Think about your trading and trading strategy in blocks. As I mentioned, you can classify your trades into specific blocks (types of trades) such as: - trades in a trend direction
- reversal trades
- trades based on chart patterns
- trades based on price action
- trades based on a signal from the specific indicator - many others

Write them down.
On which of them can you work? When you fill comfortable when you place an order and when you are not so sure?

Backtest these specific blocks. Try to write an entry, exit, stop rules for specific block/type of trade. Test different ideas. What will happen when you trade a specific setup with wider setup? What if you add some confirmation?

#forex #daytrading #swingtrading #pivotpoints #tradingstrategy

Long entry at the weekly pivot point on USD/JPY. I

Long entry at the weekly pivot point on USD/JPY. It is an interesting example because: ➡️ right at weekly pivot line, we could see a divergence (with help of RSI oscillator) ➡️ there was a reaction from the price, you can see that this weekly pivot line started to work as a support ➡️ if you draw Fibonacci retracement lines from the last swing you could find 38.2% retracement at this area (not marked on chart)

What we have here is set up with a very good risk-reward ratio 🤓. Stop loss could be set just below recent low (below pivot line). That gives you a small possible loss and bigger possible win.

Can USD/JPY go higher from here? We will see, I'm not recommending or predicting here anything.

For now, I just wanted to show you this setup because on many times it works great. Especially with divergence - if you see that there is a divergence near important zone or pivot levels (pivot lines, R1, R2 or S1, S2 and so on) then you can look for a possible entry with good risk-reward parameters.

And if you have trouble in spotting divergences then you can use special tool/indicator which will help you with that. Just google RSI divergence {name of your platform} or other oscillator and you should find some free interesting tools.

STRATEGY MONDAY --- There is one mistake that I se

STRATEGY MONDAY
---
There is one mistake that I see that traders do when they test a new strategy created by someone else or try to build their own based on other strategies.

There are many different strategies. Some based on price action, patterns. Some based on technical indicators. The list goes on. You can catch trend with them or reversal moves.

In most cases, traders borrow ideas from different strategies and try to build their own. Nothing wrong with that.
But... They force it to work on instrument and time frame they trade most of the time.
For example. Trader likes to trade on 15-minute EUR/USD. He or she will try different strategies on that 15m EUR/USD chart. In many cases, these strategies won’t work. They were created by someone else who trade stocks on a daily time frame and now our trader tries to implement that strategy in a different environment.

Tips are simple.

Test your strategies on different time frames. In many cases, the higher time frames the better results. Strategy may have mixed results on 15-minute or 30-minute but it may work much better on 4-hour and daily time frame.

Test your strategies on different instruments. You have stocks, indices, currencies, crypto, commodities. For example volatility on currencies is lowest since 2014. Still, if you check stock indices, oil or Bitcoin charts you will see nice trends here. Maybe your trend following strategy won’t work great on currencies but it will work on oil and crypto which are trending.

#trading #forex #stocks #tradingstrategy #bitcoin #oil

--- STRATEGY MONDAY --- How to check if a strategy

---
STRATEGY MONDAY
---
How to check if a strategy is working? You can check strategy in real-life trading. It takes time so another option is to backtest it. You have some options which depend from your trading and charting platform: - in TradingView you can use Replay option (google it how to use it). - in MetaTrader4 you can use Forex Simulator from https://soft4fx.com.
- if you use another platform check if there is some plugin or option to backtest it
- eventually you can backtest on paper - not a perfect solution but still, it is possible to backtest that way

My favorite way is to use Forex Simulator. It is a great tool which allows you to place trades, manage your account while you are testing.

If I have some idea for entry or exit signal then usually I test it during a weekend. This is a time when there is no noise, markets are closed and I can find a couple of hours to backtest a longer period of time.
My trading results improved when I started backtesting more. Now I do my backtesting sessions at least once a month. Your strategy and system will never be finished. Markets are changing, you are changing as a trader.
I will write more about backtesting in the future. For now, if you are not backtesting, you should start doing it.

#forex #backtesting #trading #forexsimulator #strategy #tradingplan

Bitcoin, 1h with monthly pivot points. I mentioned

Bitcoin, 1h with monthly pivot points. I mentioned before that bitcoin works nicely with pivots. We have strong swings so it is best to check weekly or monthly pivots.
On this example you can see how R3 line worked as a strong resistance and as a target on June 26.
Now we have July and new set of monthly pivot lines. You can see that during a correction there was a resistance at monthly pivot.
You can build pretty solid systems with help from pivots.

#bitcoin #cryptocurrency #swingtrading #pivotpoints

Some fun on NFP Friday ;) #eurusd #dollar #forex

Some fun on NFP Friday ;) #eurusd #dollar #forex #euro

Nice long trade on #eurusd. There was an importan

Nice long trade on #eurusd.
There was an important support on daily chart. On 1h there was a head and shoulders.
That's the reason why it is best to analyze multiple timeframes and put together information you learned from it.

Some fun with #nokjpy ;) spread is not that bad. T

Some fun with #nokjpy ;) spread is not that bad. This pair is moving nice. Maybe daily range is small but it respects pivot points. I like it, I will trade it more.
At the moment all yen pairs look very interesting, especially #cadjpy which I will cover in another post.

#forex #trading #swingtrading

Good start of a day ;) short entry right below wee

Good start of a day ;) short entry right below weekly R1 resistance with a small stop loss. Price was below R1 for few hours. Risk/Reward was great so I took it.
#audusd #pivotpoints #forex #swingtrading

I like reversal moves. We have many names for them

I like reversal moves. We have many names for them - double top, double bottoms, M-pattern, W-pattern and so on. You don't have to know the name of specific pattern.
You look at price. If there was a strong move but price can't move in that direction we can see this as opportunity to look for trade in other direction.
Like in these examples. You can use here Fibo or other technique to manage your trade.
#forex #trading #technicalanalysis #usdjpy #usdcad

Current situation on #oil. Can it go higher to th

Current situation on #oil.

Can it go higher to the monthly r2 line?

#nzdjpy long. Two things here are interesting. Fi

#nzdjpy long. Two things here are interesting.

First, 50 moving average on daily timeframe worked as a support for 3 days in a row. Price tried to stay above this average and monthly pivot line.

Second, entry itself wasn't that great. I entered on a lower timeframe, after a break above trendline. Still, I was little late. Because of that my stop loss at the moment is rather wide. In cases like that (when my entry is little late) I simply try to open smaller position. With smaller position I am able to set stop loss at the decent place and keep my risk around 1-2%. Will this trade work out? We will see. My potential take profit targets are near R1 and R2 line. I will add to it Fib levels to find best places to close trade.
#forex #trading #fibonacci #pivotpoints #trader #swingtrading

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