Trading on the Pivot

Pivot is a very powerful indicator for it can significantly determine where the market will be trending in the next trading session. The basic concept of pivot is to set parameters based on highs & lows of previous session. Most often the market confined itself within that parameters unless override by unexpected events.

I always noticed the market tends to react significantly upon reaching or near a pivot levels, and mostly have a fallback and totally reverse direction rather than going on a breakout. Though it is not "set in stone" but chances is a fallback will occur on pivot levels.

Instead going long on resistance levels or short on support levels which most traders do when using pivots, I found out to be effective putting a position(s) on reverse...meaning resistance levels to be short and support levels to be long.

You will be asking how can we determine the market will go north or south on that day? Well, we really can't predict and know until the day is over because when we set our pivots for that specific trading session, the only thing we can determine is bear or bull meaning bear when market is below pivot point (PP) and bull if above which is not even an indication how the market will conclude later in the day.

I always setup my trade having (2) open positions at the same time both long and short & set TP & SL @ 35 pips each. With this, I don't really care where the market will be trending because either ways one or both of them will trigger. The most I care about is if the market is so volatile it go outside the box and slide so bad it can't comeback to its confinement but then SL will trigger and minimize losses.

It can also be approached to put a total of (4) open positions at the same time both long and short doubling your gains (and your losses) in a day.

Fibonacci techniques in entering entry points is also a good way to consider but won't apply to first entries.

Please note volatility of the market a "must" to be taken into consideration. In this regard, Monday and Friday make big moves so it's advisable to set entry points on the higher pivot levels.

The pivot levels:
Set between 10:30 p.m. to 12:30 a.m. EST ONLY, preferably set after 12:00 a.m. for more accuracy.

R3 = Short (optional added entry)

R2 = Short entry: 5 pips above M & F (optional)

R1 = Short entry: 5 pips above T/W/TH

Pivot points (PP): Bear or bull

S1 = Long entry: 5 pips below T/W/TH

S2 = Long entry: 5 pips below M&F (optional)

S3 = Long (optional added entry)

Let your trade an enjoyable one. Thank you.

Currency Correlation

Examples of same direction moving currency pairs are:

EUR/USD and GBP/USD
EUR/USD and NZD/USD
USD/CHF and USD/JPY
AUD/USD and GBP/USD
AUD/USD and EUR/USD

Inversely moving pairs are:

EUR/USD and USD/CHF
GBP/USD and USD/JPY
GBP/USD and USD/CHF
AUD/USD and USD/CAD
AUD/USD and USD/JPY