Pivot Based Trading - 1:2 risk reward ratio - (Risk less Profit more)

suresh1_1

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Hi All,

I want to introduce a very simple way of trading.

Everyone is aware of Pivots in charts.

It is very difficult to track real time pivot on intraday charts during trading hours.

After surfing lot of site and struggling, i found the way to calculate pivot based on previous day values.

After the pivot is calculated the resistance and support levels are found.

Resistance and support are of two types (using normal method and using fibonacci method.)

You can use any one of them. Both gives good result. Stick to any one method.

The system is as follows, please give your feedback and suggestions.

1. Firstly log to

http:// pivottrading.110mb. com (remove spaces)

or

http:// pivottrading.webs. com (remove spaces)

2. Enter previous day high, low and close for any currency/stock/futures/commodities.

3. Pivot is an important value here.

4. Look at the price of stock/underlying at 10:25-10:30 am. (half hour after market opens)

5. For Resistance and support values, you can choose normal values or fibonacci values. Both give good results. It depends upon you which suits you.

6. There are various scenarios which can occur.
-----1. The price is below the Pivot but above S1.
--------In this scenario, you should buy the stock/underlying above Pivot (If price reaches above Pivot) and short sell below S1(if the prcies goes below S1).
----2. The price is above Pivot but below R1.
--------In this scenario, you should buy the stock/underlying above R1 (if the price reaches above R1) and short sell below Pivot(if the price goes below Pivot).
----3. The price is very near to pivot (+/- 0.02%)
--------In this scenario, you should buy the stock/underlying above R1 (if the price reaches above R1) and short sell below S1(if the price reaches below S1).
----4. The price is between R1 and R2.
--------In this scenario, you should buy the stock/underlying above R2 (if the price reaches above R2) and short sell below Pivot(if the price reaches below Pivot). the important here is not to sell below R1. You must sell below Pivot.
----5. The price is between S1 and S2.
--------In this scenario, you should buy the stock/underlying above Pivot (if the price reaches above Pivot) and short sell below S2(if the price reaches below S2). The important here is not to buy above S1, buy only above pivot.
----6. The price is between S2 and S3.
--------Same rule applies as rule 5. Buy above pivot, short sell below S3.
----7. The price is between R2 and R3.
--------Same rule applies as rule 4. Buy above R3, short sell below Pivot.

Keep the profit, stoploss as below

Profit : 0.75% - 1%
Stoploss : 0.5%
 
I agree that trading pivots can be very profitable. That said what you often find is that when price reaches a pivot it may bounce off it and reverse or could go through it and what was resistance now becomes support or vice versa. It is too simple in my view to say buy above PZ and below R1 and sell below PZ and above S1. What matters is price action around the pivot and other factors such as MTF Fibs as well as classic MA all converging at the same point. The reason why Fibs and MA matter in this case is not because there is any "esoteric" reason that price should be affected at them but that so many traders place their orders around them.


Paul
 
Paul,

Thanks for the reply.

I am tracking this since quite few days. And the 0.75 target is achieved everyday without hitting stoploss.

Even if the stoploss is hit it 0.5 % but pofit is more.

Keep contributing to this thread.
 
Alternate Pivot Calculator Site

Hi All,

I want to introduce a very simple way of trading.
Everyone is aware of Pivots in charts.
...

After the pivot is calculated the resistance and support levels are found.
...

You can use any one of them. Both gives good result. Stick to any one method.
...

Keep the profit, stoploss as below

Profit : 0.75% - 1%
Stoploss : 0.5%

That seems to be a good method Suresh1_1 - I will look further into this, and follow this thread.

Could you please post a chart?

I came across another Pivot Calculation site and book-marked it, so thought I would share it out of interest.

Hope you do not mind. I have no connection with that site at all - just a book-mark.

Kind Regards

Ingot

Pivot Point Calculator
 
hello everybody.
I am a newcomer to this forum joined just today. As pivot method is found easiest of all other methods,
As I am newcomer I want to know more from the friends like you people.
 
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