Hi guys! Anyone who helps me create the EA according to the following parameters is free to use and backtest the EA as well and benefit from it Pity I’m such a crappy programmer haha
Thanks guys! happy trading to all. Muacks
[U]Parameters[/U]
EA to automatically calculate DAILY pivot points = R1, R2, R3, PP, S1, S2, S3 lines.
EA to work on 1 hour charts
[B]Entry[/B]
[B]BUY[/B] when price touches line [B]from above[/B] (don’t need to wait for candle to close)
Stop loss: 26 pips
Take profit: only when price touches [B]first[/B] R/S/PP line [B]above[/B] line of entry (don’t need to wait for candle to close)
[B]SELL[/B] when price touches line from [B]below[/B] (don’t need to wait for candle to close)
Stop loss: 26 pips
Take profit: only at [B]first[/B] R/S/PP line [B]below[/B] line of entry (don’t need to wait for candle to close)
THAT IS ALL
[U]Example[/U]
a) R2 level of EUR/USD is 1.2000 for monday, while R1 level is 1.2100
b) Price drops from 1.2050 to 1.2000
c) Since price has fallen to R2 level which is 1.2000, EA enters a buy
d) Price then rises to 1.2100, which is R1. EA closes trade instantly
OR
d) If price continues falling by 26 pips to 1.1974, then the EA stops out the trade regardless of whether the price will swing back up
I am develping an EA like this myself to use pivots. problem i saw with a guys manual scalping method is that
A. how do you determine trend? i figured you’d Need an EMA for it.
B, what time of day do you start your pivots? they will be calculated differently depending if you start them at, say the london session or your brokers 00:00 time.
Just disregard trend and calculate the pivot points levels from the US trading session which is the standard one used by big banks
I have done extensive research on pivot points and I can help you with that
With this EA, everything, including trend will be disregarded. The truth is that when there is a trend, pivot points will still work, its just that price action will cross the first pivot level after the middle pivot point. In fact, when markets are trending, there is even more back and forth action in between pivot levels because the wave action you see in a trend is actually back and forth bouncing between the pivot points. Thus, you can make ever more money tracing/surfing the trend rather than just riding it upwards/downwards.
To make it easier, just disregard trend and program the EA to calculate the pivot points of the opening and closing of the US session (which is the standard pivot points calculation used by big banks)
The parameters I gave should not be disturbed. They are based on my study of pivot point dynamics.
Here are the following statistics for daily pivot points:
Price action will bounce of one pivot level to the next 60-70% of the time
In the 50% of the time it bounces of, it will move within 25 pips in the opposite direction before retracing and completing the bounce to the level below it 44% of the time
The reward:risk ratio of any system based purely on pivot point trading is minimum 3:1 and on average, 5:1 (very very good)
If price violates the first pivot level, it becomes more likely that the next pivot level, say R2, will hold. Statistically, if price cuts through R1 or S1, the probability that it will bounce of R2 OR S2 is close to 85%
You can disregard “trends” because most trends reverse at R1, with the strongest trends reversing at R2 thus allowing you to take advantage of the beginning of the reversal of that trend which is even better! The strongest and rarest trends hardly ever cross R3
Any price that reaches R3 and S3 will bounce back nearly 100% of the time
The worst case scenario is this:
R1 is violated = lose 25 pips
R2 is violated (unlikely) = lose another 25 pips total 50 pips lost
R3 not violated = gain of 75 pips there is still a 25 pip profit!
OR
if R3 is somehow violated, then you lose another 25 pips. But you have gained 75 pips from the bounce of the middle pivot level, so it actually takes a nightmare scenario to remove just one round of winnings, and even then, you are still at breakeven!
What this EA does is that it gives many lines of resistance until a genuine reversal is taken advantage of
An example of how 1000 pips can still be made in a very bad day:
In this particular day, lets say price action somehow violates pivot points 70% of the time (very unlikely, as most traders don’t trade against pivot points). However, because reward risk is 3:1 (most of the time it is closer to 4:1) you need 3 losses to offset one win.
Say in this bad day, your EA, though programmed to take every single trade on a pivot level, only trades 6 times (again very unlikely, as the average day contains 24 oppurtunities, with the quietest containing 12) you still get 150 (only 2 wins) -100 (4 losses) = 50 pips!
But since you are trading on all 20 currency pairs, thats 50 x 20 = 1000 pips!
It also makes more sense trading 20 currency pairs since pivot levels apply to them all, and diversification often hedges your capital. This diversification will increase the accuracy of your trading as well as maximise your earnings.
Why will someone create and give you that EA for free when you have disclosed each and every requirement for that EA so openly and clearly in this post?
Well, don’t take it too seriously :). I will try to code that EA and share it with you. May be you can later give me ideas based on your experience to improve the EA’s profitability based on its testing results.
this is why I [personally don’t give all my parameters and every option that I have included either! but there are a few things that i read on that method I agree with that mine will already do plus some other things as well. it was agreed to the programmer that if the EA works, then they could use it.
I know nothing about programming, so programming such an EA is next to impossible for me
So I will have to give something in return for the EA
By getting the EA made and sent to me, I get the EA and everyones happy and the other person gets the benefit of my study. Out of 10 readers, someone may be honest enough to actually give me back the EA I helped them to make. This deal may still sound quite unfair to me for some but what can I do right?
Additional info:
Technical analysts regard pure pivot points as statistically the most accurate system for forex trading in the planet, beating MACD (the second most accurate indicator) and moving averages (third most accurate) hands down. This is because pivot points are pure logic and common sense (read 3 (a))
Most banks, floor traders and institutionalists use and depend on pivot points EXCLUSIVELY without even using other technical indicators to trade. This is because pivot points are so accurate that the addition of any other indicators will lessen, not increase its accuracy
Pivot levels work because of two reasons:
a) It measures the amount of money there is in forex, and the potential for that money to move the market. Since forex is a zero sum game, the amount of money in forex is constant. It was 3 trillion per day last year. It is still 3 trillion per day this year. 3 trillion can only move the market that much per day, and so there is always an average point, obviously, at which price movement will expire and retrace. Pivot levels are the maximum amount of price movement that 3 trillion US dollars can move the price in a day. Its hard to violate them because in order to do so, there must be at least a trillion dollars worth of new capital injected into forex (we will need to wait years for that) thats equivalent to everyone in Forbes magazine suddenly going into forex in a single day and investing all their capital in it to bet against the pivot point (they are more likely ot bet for it) NOT HAPPENING!
b) Pivot levels have become even more accurate because 86% of the money, that is, big banks and big players, obey them. Therefore, it becomes self fulfilling prophecy. Proffessionals NEVER bet against pivot points, it is lunacy. They “may” let half of their positions try to break out of a pivot point in case there is news, but they never “enter” for a breakout on the pivot point! Thats regarded as a sure way to lose money e.g. charity
c) Pivot levels are used by “forex sharks” to stop hunt. If you enter them as resistance, you will ride on the backs of these big players
yes, i noticed this as well. MACD works well for divergence and not actually for trend following in my opinion. while it does work , it can still give false signals or repaint. but that’s the way it’s designed. but a pivot stays put and does really good at telling support and resistance. price reacts well to them.
And someone will give back… if you look over at forex-tsd, you’ll see a thread where there is a very good scalper and people donated for the cause. but there will be those who will try to profit from reselling but what do you do?
Thanks for your valuable input so far. I will start working on this EA this weekend and will ask you any questions if something is not clear or where I need some more clarification from you.
My deliverable to you would be a compiled EA for the MetaTrader 4 platform (no source) that will work on your one demo account and one live account. I would only need your account numbers later before delivery. The EA will be tied to your accounts as I don’t want it to be circulated freely. Being the developer of this EA, I will retain all the rights related to this EA.
I will let you know as I progress with the development of the EA. Please be aware that I am also working on some other EA projects also so it could take a few weeks.
Hope this EA proves to be profitable both in theory and practice as I have seen many EAs fail in longer run when used for live trading.
thank you so much Sbhatnagar and HAZEL, i hope the EA profits you greatly as much as it does me
Shabat that sounds like a good idea. I’ll provide my demo and live account number so that the EA can be tied in without threat of re-selling (which is not going to happen anyway, as I wish us to dominate the market lol)
All the information you need is on the first page of this thread. However, if you or HAZEL needs any more clarification, or my msn, please let me know through here or PM.
Example of an EA trade:
Price touches S2 from above
Because price touches S2 from above, EA enters buy instantly
Stop loss is always 26 pips below S2
Target profit is at S1 because price hit it from above
Target profit would have been S3 if price hit it from below. The target profit is always the closest pivot, R or S level immediatelly above it (if the price comes from above) or closest pivot, R or S level immediately below it (if the price comes from below) VERY SIMPLE
Trailing stop loss of 15 pips
Additional info
Pivot levels are the only system that still wokrs well in news trading times. In news, proffessionals may use R2 instead of R1 as the take profit position of half of their units and R3 for the other half (and taking profit by the big money obviously results in reverals at precisely these points). Therefoe, the only diffrence between the way the EA works during news and during normal times is that most of the activity is centered around R2, and more rarely, R3
Some excellent commentary regarding pivot points. I just asked in the “Software” section if someone has a 3 line PP indicator - the pivot & R1, S1. Thanks again, d.
