305+Pips on EURUSDIin One Day With My Aggressive Pivot Trading Strategy

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1

All of these trades yielded:
Total Profits: (+32pips +68pips +102pips +32pips +71pips) =305+pips on the EURUSD in one day!

Gig System Trade Setup:

o 15 minutes Chart
o Pivot points calculation
o Trend lines drawing
o Channels
o Moving Average( 50SMA)

How it works:

I use 15minute timeframe because it allows catching the best entry and exits opportunities. Hourly chart for example, when the signal is there is quite too late already to react/enter.
Each morning I start by calculating fresh pivots from midnight to midnight.
I study price behavior in the first 7hours of the day. (Europe/London open around 7.30a.m/8a.m GMT)

What I do before 7amGMT in preparation for the London Open:

o Calculate and place major S/R levels on 15minutes chart.
o Study price behaviour in relation to these levels, Moving Averages, trendlines and the channel that normally forms, between new day break and 7amGMT.(Initial Early Morning Channel- IEMC)
o Check my Forex news calendar @ forexfactory for upcoming news
o Place predictive trades using pending order and occasionally market order depending upon price behaviour between new day break and 7amGMT.
o

Price behaviour between new day break and 7amGMT

o Where did price open in relation to the PP (pivot point), above or below? The answer to this provides the first clue to traders biases for the day.

o Did market smile a good morning @ Long trade for the day? [If market opened up above @ PP or a small distance away, up above PP, I look for opportunity to go long for the day.]

o Is price above moving average?

o Did market smile a good morning @ Short trade for the day? [If market opened down below @ PP or a small distance away, down below PP, I look for opportunity to go short for the day.]

o Is price below moving average?

o Did market exactly open @ PP or away from PP?

o Market has opened a little away from pivot. Now has price pulled back to PP?

o May be it hasn’t pulled back between this time under consideration. Price may pullback to PP later in the day. Now can you put price in a range, a channel (IEMC)? I found out this range could persist and could be traded. (Initial Early Morning Channel Strategy)

o Has price zigzagged along PP? How big is the range? Can you put a channel on it?

Price behaviour between new day break and 7amGMT(see attachment)

The above chart is a EURUSD 15 minute chart illustrating how price behaved from daybreak to 7amGMT on the Wednesday 21st July2010.

Pivot and Major S/R obtained by virtue of data from previous day include: R3=1.3184, R2=1.3105, R1=1.2995, PP=1.2916, S1=1.2806, S2=1.2727 S3=1.2617.

As you can see, the dotted line represents midnight/Daybreak of previous day/new day, 20th/21st July 2010.

The vertical aqua line represents 7amGMT, i.e 7hrs after new daybreak.
Can you see price behaviour between these times? Price is in a channel of 34pips (purple to purple) .This is my Initial Early Morning Channel. I will illustrate how I trade such channels under my Initial Early Morning Channel strategy in one of my variations.

Can you now predict with some certainty the direction of price from here?
This is a case for my strategy VARIATION 1A, and I’ll be showing how to trade this.

VARIATION 1A

I have a variation1A case when ,as in chart 1.0, market opens below price from dawn of new day, stays in some consolidation sort of up to like 7amGMT, thereby price, forming a tradable channel(IEMC) for our strategy(20pips +).

If a new day passes as a candidate for variation1A, I trade the following strategies:

A. Initial Early Morning Channel strategy
B. Pivot level strategy
C. Appropriate Major S/R level strategy (This strategy is sometimes delayed, as price normally must make some journey into the day to validate the strategy at this level.)

Looking at chart1.0, I will place the following trades:

A. Initial Early Morning Channel strategy

@lowerBand of Channel:

  1. Buy Limit : Entry Price = 1.2874
    Profit Target = 1.2906 (@ UpperBand of Channel)
    Profit = +32pips

  2. Sell Stop : Entry Price = 1.2874
    Profit Target = 1.2806 (@ S1)
    Profit = +68pips

       @UpperBand of Channel:

  3. Sell Limit : Entry Price = 1.2906
    Profit Target = 1.2874 (@ LowerBand of Channel)
    Profit = +32pips

  4. Buy stop : Entry Price = 1.2914 i.e(1.2906+8pips)
    Profit Target = 1.2956 i.e (Midway b/n PP and R1)
    Profit = +42pips

B. Pivot level strategy

  1. Sell Limit : Entry Price = 1.2908 i.e (1.2916-8pips)
    Profit Target = 1.2806 (@ S1)
    Profit = +102pips
  2. Buy stop : Entry Price = 1.2924 i.e(1.2916+8pips)
    Profit Target = 1.2956 i.e (Midway b/n PP and R1)
    Profit = +32pips

C. Appropriate Major S/R level strategy ( S1 Level in This Case)

  1. Sell Stop: Entry Price = 1.2806i.e (S1)
    Profit Target = 1.2735 (@ S2+8pips)
    Profit = +71pips

All of these trades yielded:
Total Profits: (+32pips +68pips +102pips +32pips +71pips) =+305pips

+42pips from Buy Stop @ UpperBand IEMC Strategy and +32pips from Buy Stop Pivot Level Strategy were not recorded as these trades did no get triggered.

This is how it all happened: (see attachment)

This system has so many variations depending upon price behaviour from break of new day. Thisn is just one variation. subsequent ones will follow shortly.

Hope I get good critics.

Thank you
atomoore

2

I am doing something similar. 301 Moved Permanently

This type of strategy requires a lot of work and dedication, which will probably turn most people off. Most you develop it, you can apply it to any pair. I have been using the USDJPY. Once you get a feel for the price action, you can really zone in and take the pips.

4

I trade in similar manners, however I use Weekly Pivot points instead, 50 and 100 SMA, RSI (14) and Stochastic (39,3,3). One thing I found is that, WP is the strongest pivotal column which my RSI and Stochastic seem to react the most. I don’t trade breakouts, I only trade bounces.

Though your system seems worth checking, however I would suggest you apply a Pivot Point Indicator which draws the lines automatically, so you don’t have to calculate them manually and lose time.

Keep up your posts and results, I would like to check them out.

Have fun.

5

Thanks man. Could you pls send me your auto pivot point calculator?
I will be glad if you did.

Thanks

6

atomoore, I’m trying to attach to the post, but I keep getting an error while uploading. Maybe if you search using the search tool you can find a Pivot Point plotter. There dozens of them. Have fun.

7

VARIATION 1B
173pips on GBPUSD in one day, under 5hours!!!

Hitherto I’ve been trying the system on EURUSD, harvesting not less than 200pips on daily basis.
I traded GBPUSD using the same strategy and harvested 173pips today 20/05/2011
To make things simpler, I used an Autopivot calculator Indicator sthis time, which made trading today a lot easier.
Find below the trades that fetched the 173pips in one day, under 5hours!!!

Price Behavior Analysis for Variation 1b - Bullish Sentiment

PRICE BEHAVIOUR ANALYSIS FOR VARIATION 1B - BULLISH SENTIMENT.jpg700Ă—503 46.2 KB

So, I placed the following trades with the following expectations:

Sell limit @ upper channel closing @ lower channel for 27pips
Buy limit @ lower channel closing @ upper channel for 27pips
Buy limit @ lower channel closing @2nd resistance for 60pips
Buy stop @ upper channel closing @ 2nd resistance for 33pips
Buy stop @ 1st resistance closing @2nd resistance for 26pips

This is how it turned out………………………………………………………………

Price Behaviour Analysis For Variation 1b - Bullish Sentiment

173pips-Bullish mkt GBPUSD 15M.jpg700Ă—503 42.6 KB

Sell limit =27pips
Buy limit = 27pips
Buy limit = 60pips
Buy stop =33 pips
Buy stop=26 pips

Total profit = (27+27+60+33+26) = 173pips

8

Thanks GicaEric,

I got one over last week. This one happens to be a combination of pivot and Fibonacci levels.Very powerful Indicator
It helped me with my trades last Friday:20/05/2011.

Pls check my trades last Friday: 173pips on the GBPUSD

9

I’m happy to hear that atomoore. I hope it always goes this way. I’m guessing averaging ~150-200 pips/day is more than anyone could dream of. I was really happy last week for I got around ~1100 pips using my own Weekly Pivot point strategy. My goal for this week is only 500 pips to complete my May’s goal of 2000 pips :D.

Have fun buddy.

10

…p.s. atomoore I forgot to ask you about Stop Losses. Do you use any?

11

“Weekly Pivot point strategy” ? Pls how’s that? I seriously need that your indicator. Eric, does it mean you place trades on the weekly charts?

I love your target settings. By the way, I want to analyse your detailed system/strategy. I’ll mail you my own. Oh , I think you already have it: Entry settings, Exit setttings, TFs, which pairs, which broker, which market; tokyo? Europle/london or New york? Do you trade everyday?
Anyway, I jealous your pips. hahahaha

12

Eric, my system is one of hedging. I initially did not use SL. I’m considering using it. Now that I’m gradually refining my system. But , anyways, the hedging strategy will always contain my losing positions. Seriously reseaching into the mathematics. Do you have any material on that? Cos’ I know you can actually hedge without placing stop loss and you’ll do good: like buying and selling at the same time just that you vary your lotsizes… still working the maths to make it more refined.

Any materials…? Thanks

13

Eric, my strategy is basically a hedging strategy. Whenever I go short or long, I have a reverse trade in the appropriate direction. This way, my risk is contained. So no I don’t use SL but Hedging does the job SL will do. Besides, I monitor my trades quite often. This is Business. Igive it all my attention. I think Forex Should be taken as a full time job cos it’s got the potential to make you a millionaire, in a way your so called full time job, 8/5 can’t match.
However, I’m working around the mathematics of Hedging my strategy. When this is done. I wouldn’t have to worry about Placing SL nor monitoring my trades , once placed.
Anyway,have you got any material on the mathematics of hedging? Like how to play around your Lotsizes whilst going both Long and Short on the same ccy pair at the same time?
Please keep me posted.

Thanks Eric

14

Actually atomoore, I don’t really use hedging strategies. They’re good but they require good large amount of equity margin. I have a friend who got around 31,000 pips in 16 months trading only GBP/JPY hedging system. Not to mention other pairs, but I think he got around 80,000 pips or so just last week when he decided to close all his positions. So what’s that: 80,000 pips/ 16 months = 5000 pips/month. AMAZING. Very simple idea: enter BUY and SELL each starting week, with 400 PIPS T/P and no S/L. The real bummer here is that, he had to leave open deals for 16 months! ! ! WO? Losing deals for that matter! -But eventually he got his profit. But the really harsh bummer here is SWAP! - Can you imagine running negative swap for 16 months? Lol - but he overcame this problem by opening an Islamic Account (SWAP FREE Account) :D, sun of the gun ain’t it.

About my system? - Well, I don’t really trade just one system, I have a composite strategy, using different systems at certain times. Currently though, this weekly pivot point system is doing very good. Though I think that with some extra tweaks it could be a superb kicker.

Just one thing that I really find very interesting about my set of strategies is that I never focus on just 1-2-3 pairs, I trade all them! -My broker provides 28 pairs, so I trade every 28 of them. Instead of trying to catch 200 pips from one pair, my logic tells me that it’s easier to catch 10 pips from 20 pairs. Basic idea, but very powerful. I’ll attach a pdf file just to show you what I mean. Just to note, my real concern is WEEKLY or MONTHLY average, that’s what really matters after all. I don’t care if one pair only gave 200 pips in 1 year. MY LOGIC: 28 * 200 = 5600 PIPS/YEAR (or 466pips/month) Simple! -If you’d traded with standard lots it would make $ 4,500 /month. Which for me: equals HOLY GRAIL. Not really, but if you compare all the advantages of this job:
[ul]
DO IT IN YOUR HOME
DO IT WHENEVER YOU WANT
RISK AS MANY AS YOU WANT
NO BOSS !!! (OH YEAH)
MORE TIME TO SPEND WITH YOUR FAMILY
NO SHIFTS
$4500 per month :smiley:
[/ul]

WHAT ELSE DO YOU WANT?

Anyway, just take a look at my logic in practice. (Sorry but I just couldn’t upload, I’ll try to send it via email)

15

Hi Eric/Atomoore

I would tend to agree with you on the trading all 28 pairs but how do you monitor it all at the same time, also why do you not automate it ? if the rules are very Strict as they seem to be it could be written into a EA quite easily.

it would be good if you could post some of the indicators and rules you follow Eric

Thanks

Paul (london)

Paul

16

That’s a good question flapper. I have a joint account. We’re actually 3 people trading from the same account, so that everybody has it’s own pairs, and everybody has to make weekly reports describing their pairs’ behavior and forecasting their suitability for the upcoming week.

As I mentioned we have a composite strategy based on certain set of systems that we use. Some of the systems are very mechanic straight forward like news trading, basic breakout strategies, weekly pivot point strategy (which I will describe), some range bound bounces and breakouts, trend trading, fundamental trading and I’m thinking of adding a simple scalping strategy (not developed yet). Each one of us has it’s own duties and it’s own expertise that we each give our thoughts about specific pairs and plot them on our weekly trading portfolio. So basically there is no CONSTANT trading rule.

For ex. if a pair is ranging, we filter it to the range bound strategies, if it’s trending, we filter it to the trending strategies. If it’s undetermined, crazy as we are, we filter it to the mechanical systems. EVERY PAIR MUST BE TRADED. -So with this in mind, my friend actually has a joke which he says: “If you can’t make 10 pips from a pair within a week, than you’re not worth living!”. Fair enough, now you must be wondering WHERE’S THE MONEY!

So let me tell you that I can only describe you my own strategy which falls into my expertise area. As for the others that my partners use, sorry. Maybe I’ll persuade them to share it with you in this forum (which I really love).

Bare in mind that, what I am about to tell you may sound very crazy. In which case I don’t really care, if it works for you fine, if it doesn’t… Well I’m sure you’ll figure it out something else :D.

Strategy 1 (The easiest and simpliest)

First thing:

Calculate the WEEKLY PIVOT POINT (Last week’s H+L+C/3, which is is a simple Mean Average formula of high low and close, I’m sure you all know it) and plot it in your chart. That’s all you need (not other indicators).

Second thing:

Sunday evening when Sydney opens (my broker opens the trading platform at: 23:15 GMT+2, but I don’t enter any position until 00:00 GMT+2 because of the enormous spreads)

BUY: If the price opens under the WPP (Weekly Pivot Point). T/P=WPP, S/L=none.
SELL: If the price opens above the WPP. T/P=WPP, S/L=none.

1st Note: You only enter the position if and only if the opening price from the WPP is bigger than 20 pips (+the spread).
2nd Note: If the trades didn’t hit the T/P within the week, CLOSE them no matter what in Friday 16:00 (GMT+2) dead.
3rd Note: If the T/P wasn’t hit for 5-10 pips (depending the T/P size and pair’s volatility) MANUALLY CLOSE it.

That’s it. Now you can try it this on your own and see what results are you going to get. Bare in mind that, this is not suitable for small accounts.
My biggest drawdown was: -1400 PIPS within a week (this actually happened when G15 decided to artificially lower the YEN after the earthquake).
My largest up streak was: +1580 PIPS within a week (I don’t remember when it happened)

But the average I’m getting from this strategy only is (~ +1500 PIPS/ month) -Last week golden (+1080 pips)

And the reason why I’m not using any EA’s flapper, is that I really love this job. And second thing: there are times when I decide not to trade this strategy, or sometimes I filter some pairs, which I think the EA would be useless in this case. But if you could develop and EA trading this strategy, be my guest. I hope you remain happy with it.

Anyways, I hope I didn’t confuse you guys. I’d be happy to help you.

Have fun.

1 Like
17

Hi Eric

Now That’s a concise well written answer Thanks very much indeed, i will try and put this into action and report back to you, we are also 3 people and are trying to get a system together so we can scale back on our day jobs, we are all from an IT background so an automated solution is what we are hoping for.
So far we have written a few Strategies in easy language for tradstation which back test lovely but are rubbish when you put them into a live account, but we live in hope :13:

Thanks and good luck to you also

18

If you’ve seen the movie the Shawshank Redemption, there is a scene where Morgan Freeman reads a letter which I’ll quote: “… Hope is a good thing my friend. -Maybe the best of things, and no good thing dies.”

Good luck man, I really hope you succeed. I’ll be around.

19

Hello, I’ve been following this thread, because I find it very interesting (although I don’t understand all of it). Are there any news on how this strategy performed in June or any other update?
Thank you

20

Hello, thank you so much for clear description. I just did a test on EUR/USD for last week and here is what I came up with.
Weekly Pivot Point is 1.4248, this week price opened below WPP so I went on a buy and target was 1.4248 from 1.4188 which was about 60 pips. Stop Loss was open.

I have few more questions if you can please answer me. Since I already made one trade on this currency, do I wait for next week to come to calculate this week’s WPP and do a trade next week? Why I am asking is if you are averaging 1500 pips a month and I got 60 pips from one trade, do you trade 4-5 pairs a week?

Anything more you can suggest me please? Looking forward to your reply. Thank you.

21

I’ve been working with zig zag for a while and its the best indicator…