Thank you Toekan. And I hope you enjoy the holidays. Merry Xmas.
Forgot that! You too HoG!
Note to self… Avoid cab rides. One never knows what’s been on those seats
It’s those lovely ladies over there that should be avoided 
Merry X’mas to all. Enjoy your holidays guys.
It’s not the seats you need to worry about Tang, it’s the floor, or piptronix may be right, might be the ladies.
And if you ever find that you’ve got one of the ladies ON the floor, you’re in more trouble than you think LOL!
Only 5 and a half hours 'til Christmas here in UK. I wish you ALL the very best, Merry Christmas everyone.
HoG
And to you and your family HoG!
Ok, since currency trading, as we are often told by those in the know, is primarily a game of probabilities, here is a stunningly boring set of statistics for you all. And yes, my life really IS that thrilling that I found time to sit and work this out.
These figures are only for the full year trading 3rd January 2011 until 31st December 2011. I will update these figures to include 2012 over the course of the next week. (Bet you all just can’t wait eh?)
Anyway, if you were to throw a standard Pivot indicator on to a EUR/USD chart, this is what you would find:
There were 260 trading days (Mon-Fri) in 2011.
Of those 260 days, price (EUR/USD) reached or went higher than;
R2 15.38% of the days
R2 mid-point 5.77% of the days
R3 1.54% of the days.
Of those 260 days, price (EUR/USD) reached or went lower than;
S2 17.7% of the days
S2 mid-point 5.8% of the days
S3 3.5% of the days
Like I said, I’ll update this to include 2012 over the next few days and I’ll leave it entirely up to yourselves what you do with this info. You may well have condemned it to your own mental bin already LOL!!
Just before we start into 2013, here is an update to the incredibly boring set of stats detailed in the above post.
Using a standard pivot indicator on the EUR/USD pair,–
[B][U]Trading Days:[/U][/B]
[B][U]2011 - [/U][/B] 260 days
[B][U]2012 -[/U][/B] 260 days
[B][U]2011/2012[/U][/B] - 520 days
[B][U]RESISTANCE[/U][/B]
[B][U]Days price hit and/or went above R2 but DID NOT reach R2/R3 mid-point:[/U][/B]
[B][U]2011 -[/U][/B] 15.38%
[B][U]2012 -[/U][/B] 16.9%
[B][U]2011/2012 -[/U][/B] 16.15%
[B][U]Days price hit and/or went higher than R2/R3 mid-point but DID NOT reach R3, (including days detailed above):[/U][/B]
[B][U]2011 -[/U][/B] 5.77%
[B][U]2012 -[/U][/B] 6.9%
[B][U]2011/2012 -[/U][/B] 5.58%
[B][U]Days price hit and/or went above R3, (including days detailed above):[/U][/B]
[B][U]2011 -[/U][/B] 1.54%
[B][U]2012 -[/U][/B] 3.5%
[B][U]2011/2012 - [/U][/B] 2.5%
[B][U]SUPPORT[/U][/B]
[B][U]Days price hit and/or went lower than S2 but DID NOT reach S2/S3 mid-point:[/U][/B]
[B][U]2011 -[/U][/B] 16%
[B][U]2012 -[/U][/B] 18.1%
[B][U]2011/2012 -[/U][/B] 17.88%
[B][U]Days price hit and/or went lower than S2/S3 midpoint but DID NOT reach S3 (including days detailed above):[/U][/B]
[B][U]2011 -[/U][/B] 5.8%
[B][U]2012 -[/U][/B] 4.6%
[B][U]2011/2012 -[/U][/B] 5.58%
[B][U]Days price hit and/or went below S3 (including days detailed above):[/U][/B]
[B][U]2011 -[/U][/B] 3.5%
[B][U]2012 -[/U][/B] 1.54%
[B][U]2011/2012 -[/U][/B] 2.5%
So there you have the things that keep an international jet-setting playboy like myself busy when I’m not internationally jet-setting playboying.
But what do we take from such thrilling information? Well, since we are continually being reminded by those in the know, that forex trading is a business of probabilities, I suppose the probabilities are this:
On any given day, if price was to reach R2 or S2, probabilities are roughly a [B]6 to 1[/B] chance in your favour that price will reverse before it reaches R2/R3 or S2/S3 mid-points for [B]THAT[/B] day. So there is a good chance that somewhere between R2 and the next mid-point, or S2 and the next mid-point would be the High/Low for [B]THAT[/B] day.
Incidentally, why do I keep high-lighting the word [B]THAT[/B]? Well I’ll tell you why. The stats detailed above are only of use for THAT days trading since what is R3 or R2 or S2 or S3 or ANY pivot level for TODAY, can correspond to a totally different level tomorrow. Today’s R2 can be tomorrows Pivot point, so if you are mad enough to use any of the stats above as part of your thinking in taking a trade, REMEMBER the stats are only good for the [B]SAME TRADING DAY[/B] you took the trade. Tomorrow you have to start again.
So, moving on, if price was to carry on through R2 or S2 and hit the mid-points between R2/R3 or S2/S3, there is roughly a [B]18 to 1[/B] in your favour chance that price will reverse before it reaches R3 or S3 for [B]THAT[/B] day. Chances are therefore very good that somewhere between the mid-points and R3 or S3 would be the high or low for [B]THAT[/B] day.
Should price actually get to R3 or S3, there is roughly a [B]40 to 1[/B] chance in your favour that price will reverse before it goes too much further. In the two years worth of data that i looked at I did not see price hit R3/R4 mid-point, or S3/S4 mid-point on one single occassion.
It did actually cross my mind as to whether it would be possible to predict what zone would be the high and low for the next day going from what zone price reached today. I fear I may be an old man before I cracked that particular little enigma code though LOL!!
Have a good New Year folks. My oldest daughter goes for an eye op tomorrow (yes on New Year’s Eve, would you believe it?). Nothing serious but it may well curtail the amount of tea and hob-nobs I get to consume.
I wish every single one of you a happy and hopefully prosperous New Year.
HoG
Thanks for the stats HoG! It seems Pivot Points can be used as very profitable strategy if we can workout the pip value of S/L and T/P.
The chances of price reaching S2 or R2 increase quite a bit after a rangebound day. If you notice that the current day’s S and R levels are contained within the previous day’s (or at least closer together) then price has a much greater chance of reaching those levels. It is not unlike looking for a Bollinger Band squeeze – just with pivot points.
Since pivot points and their S/R levels are calculated using the previous day’s HLC, if the HL were contained within the S1/R1 levels then the new levels will be much closer together and price doesn’t have as much distance to travel to reach S2/R2, even if the range of price remains about the same or increases only a little.
There is nothing concrete in what I just stated (unfortunately), just a general observation.
I love the stats you came up with. I did the same thing a few years ago and your results confirm the impressions I came away with. Other pairs reach S2/R2 a bit more frequently than EUR/USD but not enough to alter the general reluctance of price to exceed certain levels. I never looked at midpoints. I am happy to see you are not as lazy as I am!
Interesting stuff on Pivots… but for this evening I’m going to stick to non-trading stuff, I’m afraid, I’ll revisit those two when I’m back on properly.
I just wanted to wish all the regular crew in here, both new and old, a very Happy New Year. I hope that you all had a good Christmas/Thanksgiving/whatever, enjoy whatever New Year festivities you might have planned, and then we can all focus on making a good trading return in 2013.
Following some of the threads on BP late last year, my plan is to scale back quite heavily my BP presence, at least for a while, but I certainly intend to stick with this thread - indeed, it might well become virtually my sole BP outlet - so I hope that it is as rewarding in 2013 as it was in 2012.
Happy New Year to all of you.
ST
Happy new year guys. Wishing everyone a safe and prosperous 2013. I’ll be back in here next week when its time to get back to the hustle.
Happy new year to the inn keeper and all the old hands who refuse to leave the bar or vacate their stools in this place.
Lol what can I tell you - it’s a comfortable stool!!
Need I remind you that you were one of the original founders of this idea? You shouldn’t be sitting on a stool, you should be working behind the bar LOL!! 
Anyway happy New Year to you mate and to everyone else frequenting these premises!
So, niceties over with, if we have to be here gang let’s make it productive this year, so let’s get cracking.
taken first trade of the year, based purely on the pivot stats posted above.
Shorted the bobmaninc (that’s the Aussie for those of you who may be unfamiliar with the Trader’s Arms speak) this morning, 9:45 am at 1-0495 based mainly on the fact it was sitting squarely on R3 pivot point.
Hopefully that’s clear enough for all to see. Put a stop at 1-0525 as that is R3/R4 mid-point, it’s also defend somewhat by 2 institutional levels (1-05 figure and 1-0520) and a previous resistance zone…
The only problem with the pivot thing is that you have to find a different way of determining your target as the pivot points don’t give you a target.
I’ve placed my target at 1-0440 mainly because it is R2 level but I do see a slight previous support around 1-0460 ish which does happen to correspond to R2/R3 mid-point.
Obviously the US could open and spike the price up amidst fiscal cliff deal optimism but even at that, I remember RC once telling me in a discussion about a different topic that if Europe drives the price strongly in one direction, the US tends to move it back. So I think overall this trade was worth taking.
Might as well lose my 2013 virginity at the very least LOL!!
Ok just a quick update on the trade placed above. Just closed it for +17.2 pips. Now obviously, just in the same way you really should have a valid reason for opening a trade in the first place, you really should have one for closing it. So what was the reason?
Well first up price has had a bit of a time around the 1-4075 ish level over the last couple of hours. That area is also a soft-ish previous support level but mainly the reason for closing it was that this was a first test of a new “strategy” or “theory”, call it what you will.
I know you could argue that you’re supposed to demo test new strategies, but nothing, imho, replicates reality better than reality itself, so there you have it.
Did try to close the trade at +20 but by the time I got the close section up and hit the button it was at +17.2.
At least we’re off to a positive start to the year and who knows, if price sits up around this area we may well get a better entry level later to try the same short again.
I knew my spidey senses were going off this morning.
Hope everyone had a great holiday and a happy new year.
And someone get simon back on the other side of the bar. This place is filling up fast and he took my stool. I know that one is mine as mine is the only comfortable stool in the house. I had to bring it up from the 1st floor myself.
I don’t mind standing behind the bar, Bob - I need some exercise after all the Christmas mince pies!
I haven’t fired my charts up, yet, hence the lack o trading posts, will do better soon.