When to Trade with Pivot Points in Forex
1. Is it advisable to plot pivots on all the time frames b/4 commencing trade?
2. If we are to plot pivots on daily chart, how many days back should we go in plotting this. This same question applies to other charts. thank you.
Every new day before starting trading, plot next pivot points:
1. Daily pivots, based on the previous day data only(!).
2. Monthly pivots, based on previous month data only.
3. Optionally, weekly pivots, where you take data for the last week.
With all those pivot levels in place you can then switch to lower time frames (hourly, 15 min, 5 min etc) and trade there. You don't need to calculate any additional pivot points for small time frames.
I live in south africa, using meta trader software with an auto pivot piont calc in trading platform. i mainly trade the usd/jpy. how will the japanees market affect my pivots and is early morning trading then better for me.
thank you
Begin trading around 8-9 am your local time, which is going to be the early morning for EST time zone.
Japanese market won't affect your pivot points.
hello
Please what is the best way to determine the daily trend with pivot points?
thanks
If market opens above daily pivot Point level, but below R1 (first resistance) level we are uptrend bias.
If market opens above R1 level, or above R2 - expect price to come back to Pivot Point and retest it. If Pivot point stands strong, we are uptrend bias, if it fails - downtrend begins.
Apply same logic to the market opening on daily charts below Pivot Point.
Your Pivot information is great! One question - when you say the early bird gets the worm, what time are you talking - when the market opens on a new day or when we wake up here in the states. I usually trade 5 a.m. to 9 a.m. West Coast time.
Please let me know what you think
Thanks!
Thomas
Hi Thomas,
Early birds are in our opinion and from our trading experience are the traders, who start trading from the first hours of the day, e.g. literally from midnight Eastern Time. The point of such an early start lies in the fat that with Pivot points being set, the market will test them for the first time quite early. What is also good about such early pivot point trades is that the accuracy of the price following Pivot points is incredibly high.
Trading the system I noted that many times after I made sell/buy order according to strategy rules, PP, R1, S1 level was broken for more than 10-20 pips then price reverses and go to another direction like on this page http://www.fxpivot-points.com/pivot_points_strategy/04/?page=3. How possibly to avoid false orders. should I use bigger SL( for example at midpoints), or check the trend on 3-4 hour time frame and follow the trend ???
Andris
Hello Andris,
I must admit that both your ideas are good. I think the concept given on pivots website is a basic one to follow. You may certainly add a rule of identifying a trend. 3 or 4 hour charts would be ideal for trend confirmation while trading off of 15 min charts. Also setting a stop loss order at midpoints may help to improve the win/loss ratio, however, when midpoints are quite distant it would be logical to identify closer stop targets.
Let me also add from my own experience, that watching news time makes difference in Forex trading. When economic indicators data is released and it carries high impact factor the market will react to it breaking through or bouncing from pivot levels it previously clustered at. In other words, if you spotted market slowing down and tightening its trading range at any pivot level and you also know that some high value news are about to hit the air, it is time to abandon you strategy rules and analyze market reaction as is, cut losses quickly if you are on the wrong side and even refrain from taking new trades in case your aren't strong at fundamental analysis yet.
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