-
Pivot Points Forex Strategies
How to Trade GBPUSD Forex Yearly Pivot Points
Talking Points:
- From January to February 2013, GBPUSD fell 1400 pips breaking down through three significant pivot levels before settling
- GBPUSD double bottom bounce from the yearly Forex S2 pivot began a 1700 pip rise
- GBPUSD 2014 yearly Forex pivots may show excellent trading opportunities
This continues a series of articles dedicated to revealing the yearly pivot points of each of the major currency pairs. This article is a “cheat sheet” of sort that you may want to print out and have handy so when price action tags any of these potential support and resistance levels, you will be ready to act. Past performance is not an indication of future results, however, the evidence supporting the effectiveness of yearly pivots is abundant.
But you may be asking, “Why should we look at yearly pivots?” It is a great question. In technical analysis, the longer the timeframe, the more statistically reliable the trendline, support and resistance level becomes as more data has gone into producing each point. This greater reliability added to the large moves that happen after a bounce and a break make these levels attractive buy and sell zones for Forex traders.
Learn Forex: GBPUSD 2013 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
In the above GBPUSD 2013 daily time frame chart, notice how price action interacts with each yearly pivot level. Starting in January, GBPUSD moves down from the highs of 2012 near 1.6300 and push below the central yearly pivot (1.5929) and moved down 1076 pips to the S2 pivot (1.4850). This marked the low of the year made in March and again in July near 1.4812. GBPUSD did rally from the yearly forex central pivot to the S1 pivot.
GBPUSD retouched the S2 pivot to form a powerful forex double bottom pattern. The bullish engulfing candlestick pattern at S2 ignited a huge move back to the central forex yearly pivot and multiple bounces at the “P” level of support from September to November led to the continuation of the rally just short of the R1 on the last day of December at 1.6577, the high of the year.
While other traders may have been scratching their collective heads and wondering why GBPUSD moved the way it did.Forex yearly pivot traders would have been made aware months in advance of these significant levels. These traders would have had a plan in place, ahead of time, to trade at these important levels as price reacted to them.
Learn Forex: GBPUSD 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
GBPUSD Yearly Pivot Trading Plan
We have seen what yearly pivot levels meant in 2013 with GBPUSD. Could we see similar moves in 2014? As it is February, we are early enough in the year to project forex yearly pivot levels for GBPUSD using the pivot formula found in the previous article. These yearly pivots have been drawn manually, but you may check back with FxCodeBase to see if they have created a plugin.
I used the GBPUSD’s 2013 high (1.6580), low (1.4814), and close (1.6557) to derive the 2014 yearly pivot levels. GBPUSD is currently trading at 1.6323 which is between the R1 pivot of 1.7154 and the Forex central pivot of 1.5984. GBPUSD is roughly 340 pips away from the central ‘P’ yearly pivot.
If price moves to this area of potential support, a good-sized tradable rebound to could result taking pair above the recent highs to the R1 yearly pivot (1.7154). Friday’s US employment number could be the trigger for a decline down to the next yearly pivot.
However, a close below 1.5984 could lead to a move down to the S1 yearly pivot at 1.5388. Further cable weakness as indicated by a daily close below the S1 pivot could lead to a repeat of last year’s decline to the S2 pivot.
The double bottom at the S2 pivot level led to the spectacular 1700-pip run that closed out the year at multi-year highs. Using this “50,000 feet” satellite view of GBPUSD, traders can get the strategic big picture and act accordingly. Since they are yearly pivots, you only have to calculate them once!
---Written by Gregory McLeod Trading Instructor
More...
-
AllPivots
- AllPivots_v3 indicator is on this post.
- AllPivots_v3.1 indicator is here. This is updated version of AllPivots with ability to plot Woodie's Pivots (PivotMode = 5 and BasePrice = 7).
- AllPivots_v3.2 indicator is on this post.
- AllPivots_v3.3 indicator is on this post.
- AllPivots_v3.4 indicator is on this post.
- AllPivots_v3.5 indicator is on this post. This is the version improved by new parameter - DescriptionPlace
- How to use this indicator by settings - read this post.
- AllPivots_v3.6 indicator is on this post. Two new parameters to the new version for sessiona start/end for stock market.
- AllPivots_v3.7 indicator is on this post. In this version - we can with plot Yearly Pivots
- SDK-Pivots-v1.3 indicator is on this post.
- Camarilla AlertwFibs indicator is on this post
-
How to Use Forex Yearly Pivot Points to Forecast Euro Targets
Talking Points:
- Pivot points is a popular and easy way that traders can identify potential support and resistance
- Pivot points are based on a mathematical calculation that uses the previous high, low and close of a specified period; weekly, daily, monthly, yearly
- Yearly pivots can forecast maximum and minimum price extremes for the coming year as well as areas where price can change direction.
As we learned in the previous article, many traders regard pivot points as significant areas of support and resistance. Pivot levels are points where price usually changes direction. Though technology and markets have evolved, pivots have remained a staple and cornerstone of technical analysis.
While most traders are familiar with daily, weekly, and even monthly pivots which fit their type of trading, yearly pivots can also be used to forecast future potential support and resistance areas. Buying at or near a significant area of support and selling at a key area of resistance is the main focus of any trader no matter what the market or the duration traded. Yearly pivots can be monitored for those key trading opportunities.
Learn Forex: EURUSD Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
As you can clearly see in the Euro chart above, forex yearly pivots have been plotted. These have been manually created as Marketscope 2.0 charts currently does not have a yearly pivot point setting. Notice how the Euro rallied up to the R2 pivot and turned around sharply falling over 600 pips in February.
Another significant area that can be easily seen showing the power of yearly pivots is the triple touch of the R1 yearly pivot at 1.2910. The third and final touch led to over a 600-pip rally back to the R2 yearly pivot to close out 2013 up over 4%.
Learn Forex: EURUSD 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
EURUSD 2014 Yearly Pivots
Could forex yearly pivots show traders the next move in the Euro? In the chart above the 2014 yearly pivots are plotted on the EURUSD chart. The year is just getting started and the great thing about yearly pivots is only having to draw them once a year! EURUSD is trapped between the central pivot at 1.3461 and R1 at 1.4177. As at the time of this writing, the Euro has not tested either pivot. However, forex traders may be waiting for a move down to the central pivot (1.3461) for a move back toward the R1 (1.4177) yearly pivot resistance.
Alternative scenario is for the Euro to make an immediate run for it up to the R1 level. At R1 pivot resistance, traders may look to take profit on their longs and/or short the Euro at this level. However, a close above R1 could lead to a move higher to the R2 pivot (1.4610). Traders should also consider the possibility of a close below the central pivot that could lead to a prolonged down push to the S1 (1.3028) level.
Forex traders who scalpers, position or swing traders can make use of yearly pivots to locate key areas of support and resistance. Look for future articles on other currency pairs that lay out the yearly pivot ‘landscape’ to help you navigate the forex market.
---Written by Gregory McLeod Trading Instructor
More...
-
How to Use Yearly Pivot Points to Forecast USDJPY Targets
Talking Points:
- In 2013, USDJPY tested and rebounded from yearly pivot points numerous times.
- USDJPY could retest the Central yearly pivot down at 99.08
- USDJPY has traded between 102.00 and 103.50 for 6 days while other yen pairs have broken down
In this article, we will continue this examination of the not-so-often discussed USDJPY yearly pivots. Yearly pivots may show the end of this correction and reveal a potential trade setup to catch the resumption of a very powerful USDJPY uptrend in its earliest stages.
Learn Forex: USDJPY 2013 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
As evident in the USDJPY daily time frame chart, that yearly pivots provided traders with several good entry points in both trending and ranging environments. The February break higher above the R1 pivot (90.33) led to the move to the New Year’s high of 105.43. However, the move higher was not in a straight but had several retracements at yearly pivots.
Since many traders are not paying attention to these invisible areas of support and resistance, they were caught off guard when USDJPY stalled in a particular areas or bounced from other areas. USDJPY behavior can be easily explained once yearly pivots are applied to the chart.USDJPY close above the R3 pivot in December 2013 at 101.09 led to over a 400 pip run into 2014.
Learn Forex: USDJPY 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
USDJPY Yearly Pivot Trading Plan
As you can see in the chart above, I have manually created yearly pivots using the formula found in the first article and the 2013 USDJPY high, low and closing price. Currently, USDJPY is trading at 102.30 between the central pivot at 99.08 and R1 at 111.63. If USDJPY correction continues to move down to 99.08 and rebounds from this area, we could see a move to 111.63 and beyond. The central pivot also coincides with a 61.8% Fibonacci retracement area as well. January’s US Employment report could be the catalyst. Another weak job number could spark more risk aversion and a flight into Yen.
On the other hand, a close below P (99.08) could lead to a run down to the S1 92.75 level. Notice how these pivots have several hundred pips of space between them and are ideal for longer term trading but can be very effective in short-term day trading in providing high probability entries and exits near these levels. This allows traders the opportunity to trade in and around a core position.
In sum, USDJPY yearly pivots are worth adding to your charts so you can be ready for the next leg up in USDJPY.
---Written by Gregory McLeod Trading Instructor
More...
-
How to Trade AUDUSD Forex Yearly Pivot Points
Talking Points:
- Significant Support and Resistance levels provide excellent risk/reward trades
- Longer time frame support and resistance is more reliable than shorter time frame support and resistance levels.
- AUDUSD is in the middle of a 1155 pivot range and is poised to move to the P or S1 yearly pivots
This fourth installment of the Forex majors yearly pivot series takes a look at AUDUSD, commonly known as the Aussie. Since trading above the 1.0600 handle area back in 2013, AUDUSD some 1900 pips. This decline was not in a straight line as price made “pauses” along the way.
These pauses were great opportunities for traders to catch a “ride” on this southbound train! Forex yearly pivots helped to identify these areas of consolidation. Using Forex yearly pivots, traders had choice to enter new positions, take profits on existing positions, or pyramid profits with additional positions.
Learn Forex: AUDUSD 2013 Yearly Pivots
http://media.dailyfx.com/illustratio...s_body_707.png
In the above chart, notice how the Aussie was in a choppy trading range for the first 4 months of the year. Notice how there were a few false breaks below the central pivot level indicated by line “P”. As price failed to make a new high, there was another big push to test the resolve of the central pivot. Finally, on May 6th a breakout below the March 4th low led to a 578 pip run down to the S1 pivot.
If Forex traders missed that move down, there was nine days of consolidation at the S1 pivot that allowed traders to pick up another 695 pips on a run down to the yearly S2 pivot at 0.9005. Traders may have been stopped out a couple of times trying to short below S2 as price snapped back up.
However, the resulting double bottom chart pattern led to a 695 pip rind back to the S1 pivot. A bearish engulfing Japanese candlestick pattern at S1 on October 23 capped the rally leading to the Aussie closing at the lows of the year just below the S2 pivot at 0.8865.
Learn Forex: AUDUSD 2014 Yearly Pivots
http://media.dailyfx.com/illustratio...s_body_708.png
AUDUSD Yearly Pivot Trading Plan
After a slow and choppy start in 2013, AUDUSD showed the direction it wanted to go; down. Once the first pivot was penetrated and cleared, AUDUSD took off in a fairly obvious direction punctuated by long, wide ranging red bars signaling that the bears were in full control. It paid to wait and stand aside for the “real” move. Fast-forward to 2014, and we can see Aussie heading to yearly highs near 0.9076.
A close above the yearly high opens up a move to the central pivot at 0.9444. If the Aussie bounces down from this resistance point, then a very good shorting opportunity has revealed itself and Forex yearly pivot traders would take special note of this level.
On the other hand, look for a break below the 2014 low of 0.8659 for a move down to the S1 yearly Pivot at 0.8289. The downtrend would have shown itself strong and we could eventually see a test of the S2 yearly pivot at 0.7666.
Remember, Aussie is prone to large retraces that look like reversals. If the pair is not trading above the October 23, 2013 high of 0.9756, then such moves higher should be treated as opportunities to short at better levels. It may take a little time and patience for price to hit yearly forex pivot levels, but the reward may be worth the wait!
---Written by Gregory McLeod Trading Instructor
More...
-
How to Trade USDCAD Forex Yearly Pivot Points
Talking Points:
- Yearly Pivot Points are one type of Forex support and resistance used by traders.
- Bounces from yearly pivots usually lead to several hundred pip moves.
- USDCAD has broken above the R1 Pivot and is now less than 96 pips from the R1 pivot
This is the fifth in a series of articles dedicated to yearly pivots points. Yearly pivot points is a remarkable method for creating a long term trading outlook based solely on price action and its behavior at or near a significant level of support or resistance. We have already looked at the Euro, USDJPY, GBPUSD, and AUDUSD.
USDCAD the next currency pair that we will look at how effective trading using 2013 yearly pivots. Then we can plot 2014 Forex yearly pivot points on USDCAD. Since these are yearly pivot points, they are only drawn once. They predict potential areas of support and resistance that traders can use to enter and exit trades. They are rigid and do not float, move or repaint because these levels are created using the pivot point formula and the High, Low, and Close of the year.
Pivot Point = (Previous High + Previous Low + Previous Close) / 3
The other levels are created using the aforementioned Pivot value. Marketscope contains the pivot point indicator for daily, weekly and monthly levels, but yearly has yet to be added. The lines on my chart are drawn manually for your use.
Resistance Level 1 = (2 * Pivot Point) - Previous Low
Support Level 1 = (2 * Pivot Point) - Previous High
Resistance Level 2 = (Pivot Point - Support Level 1) + Resistance Level 1
Support Level 2 = Pivot Point - (Resistance Level 1 - Support Level 1)
Resistance Level 3 = (Pivot Point - Support Level 2) + Resistance Level 2
Support Level 3 = Pivot Point - (Resistance Level 2 - Support Level 2) |
Learn Forex: USDCAD 2013 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
As you can see in the above USDCAD daily chart, price rallied in late December and into January stopping at the central pivot (P) and reversing. From January 23rd to February 18th, USDCAD consolidated in a chopping range popping up above the central pivot and back down below the central pivot. A breakout of that range takes USDCAD just short of the R1 pivot. Then the pair returns back within a few pips of the central pivot on May 9th.
One important concept to understand is that these support and resistance areas are not concrete barriers but more like zones of support and resistance. Price may come within 50 pips of a yearly pivot on either side and then turn around. This would be considered a valid touch.There were a number of touches and breaks of the R1 pivot for 5 months before the October 25th 360-pip breakout to the 1.0725 area. To finish out 2013.
Learn Forex: USDCAD 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
The 2014 USDCAD Yearly Pivot Trading Plan
With USDCAD so close to the yearly forex pivot at 1.0969 area, the current correction may find support at the R1 pivot (1.0969) or turnaround from current levels. The first target would be the old yearly high of 1.1223. A close above this high could open a path to the R2 pivot at 1.1602 and the R3 pivot at 1.1892.
Friday’s 8:30AM ET US Employment number could be the spark that ignites a massive rally to the upper pivots. On the other hand, USDCAD could sell off if the employment number comes in lower than expected. Over the course of a few weeks, price may move below the R1 pivot and move down to the central pivot down at 1.0392.
As with any type of support and resistance, Forex traders are looking for breaks or bounces from these key areas. These areas are watched heavily by Forex traders around the world and often are used as option levels as well. So you may want to print this article out and pin it on your wall or just simply place a couple of the nearest yearly pivots on your charts for reference.
---Written by Gregory McLeod Trading Instructor
More...
-
How to Trade Gold Yearly Pivot Points
Talking Points:
- Commodity pit traders have used pivot points for decades to determine potential support and resistance areas.
- Gold yearly pivot points from 2013 forecasted significant turning points
- Gold is approaching the 2014 central yearly pivot point at 1360.82
In this continuing series highlighting the seldom mentioned topic of yearly pivots, gold will be covered in detail. We will look at how yearly pivots in 2013 marked significant turning points in gold as well as the levels to watch out for with the new set of 2014 yearly pivots.
The year 2013 was not very kind to the shiny metal. Gold plunged 27% or just over $450/oz. in one of the biggest declines in many years. However, after hitting a three year low of 1178.86 back in December 2013, gold has managed to crawl back higher in 2014.Yearly pivots marked gold's decline with pinpoint accuracy.
Learn Forex: Gold 2013 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
The sudden and severe $141/oz. drop in gold in the beginning of 2013 caught many gold traders off guard. However, traders who watched gold yearly pivots knew ahead of time that a close below the central pivot (P) at $1661.75/oz.
Notice in the chart above how price hugged the central pivot red line. The close below the yearly central pivot marked the beginning of a year-long decline to 3-year lows.
Even after reaching a low of 1208, the subsequent gold rally in July was stopped dead in its tracks at the S2 yearly pivot at $1392.79/oz. Gold went on to make the low of the year at 1179.86. Yearly pivots were useful for determining the beginning of the decline as well as locating areas to re-enter or add more to a position. You may now be wondering what the 2014 yearly pivots have in store for gold.
Learn Forex: Gold 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
Gold Yearly Pivot Trading Plan
Gold starts 2014 higher than where it left off in 2013. Crossing above the psychologically important $1300 level, gold is a long way from the lofty highs in the $1900 area. The first major yearly pivot hurdle is just $40.00 away at the central yearly pivot at 1360.82. This was also the highs of October 2013. Pivot points often act as magnets “pulling” price up or down to the nearest pivot.
The current weekly Japanese candlestick pattern is an indecision doji/spinning top. This gives us a “fork in the road” or decision point; price could break higher or lower from this point and continue to trend in the breakout direction. A new candle is due out next Monday and if it can break above the 1332 high of the doji candle could lead to an explosive move toward the R1 pivot and beyond. Moves above the central pivot are regarded as bullish.
On the other hand, a break below 1307.26 low of the weekly doji candle opens move toward the lows of 2013 in the 1186 area and a test of the S1 yearly pivot at 1024.25. Remember that yearly pivots represent potential support and resistance. Using the pivot point calculation on the high low and close of 2013, these levels can be created. Yearly pivot levels can help traders determine price targets for taking profit as well as entry and stop areas.
---Written by Gregory McLeod Trading Instructor
More...
-
How to Trade EURJPY with Yearly Pivot Points
Talking Points:
- EURJPY is just 3.7% off of its 5-year high of 145.89
- On 2/14/2014, EURJPY rebounded from the forex yearly pivot area at 134.65
- Rebounds from Forex yearly pivot zones usually take price to the next yearly pivot. In this case, R1(155.75) is the next level for EURJPY
While a strong uptrend in the second half of 2012 which carried EURJPY into 5-year highs in 2013, EURJPY has been fairly tame in 2014. EURJPY was fueled by a loose Japanese monetary policy affectionately called “Abenomics” named after the Japanese Prime Minster, Shinzo Abe. His “three arrows” plan of fiscal stimulus, monetary easing, and structural reforms was designed to awaken the economy that has been sluggish for 20 years.
EURJPY rocketed over 30% from the lows of July 2012. There were pauses along the way and forex yearly pivots could have been used to climb aboard this strong trend.
Learn Forex: EURJPY Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_2.png
Notice in the chart above that the R1 pivot is the first level EURJPY hits at 121.41 in January. Savvy Forex yearly Pivot point traders would have had two days of consolidation to enter long as the currency pair tested support from the top side. From R1, price runs up over 700 pips stopping just short of the R2 yearly pivot at 128.35.
For traders who missed this move up, there was a second and third opportunity to get long EURJPY in the form of a double bottom just below the 121.41 (R!) support. A bullish engulfing candle in April signaled that the uptrend was resuming unlocking another 800 pips.
Finally, EURJPY had built a base on the forex yearly R2 pivot at 128.35. This sideways movement along support paved the way for the massive breakout to the R3 pivot located at 142.00. There was one last break out above R3 to a 5-year high of 145.89.
We can see how yearly pivots can help traders see potential areas of support and resistance. Next we will fast forward to current EURJPY price action and see how we can use yearly pivots to find trading opportunities.
Learn Forex: EURJPY 2014 Yearly Pivots
http://media.dailyfx.com/illustratio..._Picture_1.png
As you can see the chart above, EURJPY drifted from 145 down to 136.22 near the central yearly pivot at 134.65. Sometimes a currency pair hits the pivot exactly, other times it may move a few pip beyond. So rather than thinking of support and resistance levels like pivots as a concrete wall, think of them more like permeable and stretchy zones Yearly pivots have wider margins of error due to their size, so if price comes within 100 or 200 pips of a yearly pivot and changes direction, then we would consider it a “touch”
EURJPY could rally up to R1 near 155.75. However, the old 2013 high at 145.89 stands in the way. Forex yearly pivot traders will be looking at the old high before considering big bullish bets.EURJPY come down to retest the central pivot again forming a double bottom formation for a move higher.
On the other hand we could see seasonal yen strength due to the end of the Japanese fiscal year which happens at end of March. Japanese multinational corporations usually repatriate yen back to Japan to close their books. If these flows are substantial, EURJPY could visit the S1 Pivot at 123.61 before moving back to new highs. A falling stock market and falling US 10 year interest rates could trigger flows into yen as well. These are markets that are highly correlated to yen moves. Watching yearly pivots on EURJPY can help demystify the upcoming moves in 2014.
---Written by Gregory McLeod Trading Instructor
More...
-
How to Trade NZDUSD Yearly Pivot Points
Talking Points:
- The Reserve Bank of New Zealand may raise rates 25 basis points at their next meeting
- NZDUSD is at 2014 high after rebounding strongly from a yearly pivot
- Forex yearly pivot pints can show key areas to trade
In this next in a series of articles focused on forex yearly pivot levels, we take a look at how we can apply yearly pivots to trade the New Zealand Dollar versus the US Dollar currency pair. By using these specialized support and resistance levels, forex traders can anticipate probable turning points in price. In addition, forex traders can predict future price targets using these forex yearly pivot levels.
Learn Forex: NZDUSD Weekly Chart with Yearly Pivots
https://media.dailyfx.com/illustrati..._Picture_2.png
First of all, let’s take a quick trip back in time to take a look at how forex yearly pivots worked to create an operational trading framework for NZDUSD price action. As 2013 NZDUSD trading got underway, price action was trapped in a fairly tight range for the first three months of the year.
However, in March, NZDUSD staged a rally from a low of 0.8161 up to test the R1 yearly pivot at 0.8678. Failure to close above this yearly pivot led to a subsequent 610-pip decline to the central pivot (P) at 0.8068 in June.
The Kiwi was unable to stage a successful rally from the central pivot. Price broke below the pivot and collapsed another 409-pips down into the area of the S1 pivot at 0.7659. From the yearly S1 pivot, NZDUSD staged a couple of rallies in July and August back to the central pivot forming a very visible double bottom chart.
This double bottom bounce form the S1 pivot led to a powerful 831-pip move into the 0.8500 handle. As you can see, yearly pivots marked the beginning of powerful moves. But could forex history repeat for NZDUSD in 2014?
Learn Forex: NZDUSD 2014 Yearly Pivots
https://media.dailyfx.com/illustrati..._Picture_1.png
Unlike 2013 where NZDUSD got off to a slow start before rallying, Kiwi immediately moved down to test the 0.8190 yearly pivot at the start of 2014. After two weeks of trading at the yearly central pivot, NZDUSD broke out with a bullish engulfing candle. NZDUSD has been up trending ever since and currently sits at the 0.8468 area.
This is roughly the midpoint between the R1 pivot at 0.8697 and the central pivot at 0.81900. The bullish engulfing candlestick pattern is a great reversal candlestick pattern. It represents a shift in the overall market sentiment from bearish to bullish. A daily close above the R1 yearly pivot could open a path to 0.9436.
Today at 4:00PM ET the Reserve Bank of New Zealand (RBNZ) coming out with their rate decision. It is widely expected that New Zealand’s central bank will hike rates 25 basis points from 2.50% to 2.75%. Since investors and traders follow yield, NZDUSD could move higher toward the R1 pivot at 0.8697.
On the other hand, if the RBNZ fails to raise rates, we could see a Kiwi sell-off back toward the central pivot at 0.8190. Though Forex traders only put yearly pivots on their charts once, yearly pivots can produce several good trading setups over the course of the year.
---Written by Gregory McLeod Trading Instructor
More...
-
Should You Adjust Where You Start Your Fib Retracements?
Talking Points:
- Primary Way of Drawing Fibs
- Taking Key Impulses on the Chart to Draw Fibs
- Looking For Confluence Price Targets
It’s easy to feel like you’ve found the Holy Grail when you’re first introduced to the Fibonacci sequence and furthermore, the Fibonacci ratios. The common Fibonacci ratios of 38.2%, 61.8% & 76.4% can help you spot a turn-around in a correction off the prior trend. However, the way you’ve likely been taught to apply Fibonacci retracements to the chart is the only way to squeeze value out of this great tool.
Primary Way of Drawing Fibs
Fibonacci seems so easy at first. All you have to do is pull up a chart and then draw a Fibonacci retracement from the highest high to the lowest low. However, if you’re familiar with Elliott Wave, you know that a lot of trends and corrections happen within the highest high to lowest low. Therefore, the primary way of drawing fibs (highest high to lowest low) may not be the most helpful way for trading.
Learn Forex: Traditionally, Fib Retracements Are Drawn From Low to High
https://media.dailyfx.com/illustrati..._Picture_2.png
Taking Key Impulses on the Chart to Draw Fibs
The key idea to focus on here is that charts are fractal and so are trend moves. Fractal is a fancy way of saying that within one large move higher (or lower) there is many smaller bullish (bearish) trends and bearish (bullish) corrections. Fibonacci retracements are great to help you see where the correction against the trend could run out of steam so we can dissect the moves to help fine-tune some of the levels you should be focusing on.
Learn Forex: Fibonacci Retracements Applied to Individual Impulses
https://media.dailyfx.com/illustrati..._Picture_3.png
As you likely learned in a prior article, traders would do well do look for confluence of Fibonacci levels. Fibonacci confluence develops when a Fibonacci expansion and Fibonacci retracement come together. The chart above shows not only a combination or cluster of Fib levels around 1297 but also the 55-dma & 200-dma could act as support. One thing is for sure, a lot of traders using different tools could well be looking to buy XAUUSD from these levels.
Looking For Confluence Price Targets
Confluence can help you do two things. First, if you’re trading the correction, you can look to exit the trade at strong Fibonacci confluence levels or bring your stop to break even so that you can ride out the correction or new trend with little risk. Second, if you focus only on trading in the direction of the overall trend, a key price action signal off of a Fibonacci confluence level can help you to re-enter the trend at a great level.
Learn Forex: Strong Fib Confluence on EURUSD should keep your attention
https://media.dailyfx.com/illustrati..._Picture_4.png
Closing Thoughts
Adjusting your Fib start and end points can be very helpful. Look for strong impulsive moves to start drawing your fibs as opposed to extreme highs and extreme lows. Regardless of your newfound knowledge, continue to manage your risk and I hope you find yourself entering into the trend earlier than before.
Happy Trading!
---Written by Tyler Yell, Trading Instructor
More...
-
1 Attachment(s)
The Three Most Popular Indicators for Day-Trading
Talking Points:
- Price action is an extremely common tool for day-traders’ (scalpers) risk management approaches.
- Moving averages and psychological support and resistance can assist with entry and trade management.
Price Action
The first indicator is more than an indicator, and closer to a ‘field-of-study’ within technical analysis. Because trading on short-term time frames exposes traders to the complexity of ‘lag’ within a market, price action is one of the more popular ways of performing technical analysis with a short-term approach.
The reason this is so popular is because price action removes technical indicators from the equation and instead focuses on price and price alone. Price action can be used to grade trends, identify support and resistance levels, and to show traders potential entry opportunities in markets.
Where price action can come in as especially valuable for a short-term trader is in the realm of trade and risk and trade management. By noting price levels with which reversals or changes in market direction have taken place in the past, traders can look to place stops on positions so that if the market breaks against them (if a new low is put in while in a long position, or a new high while in a short position), the trade can be closed in an effort to mitigate the loss.
Price action can be a valuable tool for risk and trade management
https://media.dailyfx.com/illustrati..._Picture_3.png
If the market does trend in the direction that you’re looking for, price action can also help with adjusting stops and profit-taking.
Short-term traders will often look to execute a quick break-even stop to remove their initial risk from the trade. And after prices do continue to move, traders can look at moving the stop even deeper in-the-money as the trade works in the trader’s favor.
Moving Averages
Another indicator that’s simple to use and attempts to marginalize the lag that is ever-present with the usage of indicators, the moving average is a common chart component of short-term traders.
Moving averages are commonly used for trend diagnoses, so that if prices are above the moving average the trend is diagnosed as being ‘up,’ and if prices are below the trend is considered being ‘down.’ This can work phenomenally with a multiple time frame approach in which trends are being graded on a longer-term chart (like the hourly or 4-hour), and entries performed on the shorter-term chart.
Traders can also use moving averages to trigger into new positions. The moving average crossover is one of the more common ways of doing so and with this method; traders are simply looking for price to cross the moving average to initiate the position.
This strategy uses Moving Averages for trend filter and entry trigger, and price action for risk management
https://media.dailyfx.com/illustrati..._Picture_2.png
Support and Resistance via Psychological Whole Numbers, and Pivot Points
Have you ever been in a trade that’s working out great, only to see that up-trend stop dead-in-its-tracks? And after price struggles to continue moving up, it begins to oscillate before reversing and moving down.
This is the story of support and resistance, and to short-term traders this can take on extreme importance because failure to see ‘the bigger picture’ can lead to confusion and losses on the shorter-term charts.
There are numerous ways to identify support and resistance, and traders can use price action to validate any particular level; but this really only comes into play after-the-fact. Of particular interest to short-term traders are ‘psychological whole numbers.’
Psychological whole numbers are simply even, rounded values on the chart. As an example 1.3900, 1.3800 and 1.3700 are ‘round’ whole numbers in EURUSD, as each of these prices end in ’00.’ But we can take this a step further with the values mid-way between these three levels, 1.3850 and 1.3750 are also ‘rounded whole numbers.’
Take a look at the most recent move in EURUSD in the chart below, and notice how even in a strong-trending market the level of 1.3850 offered temporary support as the pair could not break through. Eight hours later that momentum came back in the market as the level finally yielded to selling, only to see 1.3750 come in as support shortly thereafter.
Psychological levels can have a huge bearing on price action
https://media.dailyfx.com/illustrati..._Picture_1.png
At this point, the pair has still failed to break below 1.3750 as support has come into the market after the most current 200+ pip run to the down-side.
Will every price ending in ‘50’ or ‘00’ elicit support or resistance? No. But short-term traders need to remain cognizant of the potential for support and resistance to develop at these values as trends move into new territory.
If a trend appears as though it may have run into a brick wall of support or resistance, traders can use this opportunity to scale out of a position, adjust stops, and or plan re-entries after prices finish retracing and continue moving in the trend-side direction.
--- Written by James Stanley
More...
---------
Psychological Levels
- PsyLevels_v2 indicator with template is here.
- PsyLevels_Dashboard_v1 indicator is on this post. Indicator is having the ability to watch the breakout and/or bounce levels on any number of currency pairs. Plus you can watch the candle direction on any number of time frames. The dashboard also have the popup/email alerts when the breakout/bounce direction matches with all candle directions.
- PsyLevels_v2.1 indicator is here. This version works with Metatrader 4 build 600 and above.
Attachment 6964
-
Should You Exit Your FX Trade On Strength Or Weakness?
Talking Points:
-Why Traders Neglect the Exit
-Two Exit Approaches
-Specific Tools for Both Exit Strategies
“You can’t control what the market does, but you can control your reaction to the market. I examine what I do all the time. That’s what trading is all about.”
-Steve Cohen, Hedge Fund Manager
In my experience, the more years a trader has under their belt, the more attention they pay to the exit on their trade. It’s not that the entry isn’t important, it’s just that there’s a direct profit impact based on your exit. This article will breakdown two methodologies for exiting your forex trades so that you can choose the one that aligns best with your personality & goals.
Why Traders Neglect the Exit
As a trader, it’s easy to focus on entering the trade. After all, you’ve got to be in it to when it and the only way to be in it is to find an entry. And when it comes to entering into a trade, your mind is likely to race to different outcomes about whether or not this trade will be a home-run that “can’t fail” or whether you’re not 100% sure on the trade and therefore, should either hold-off or enter with a smaller trade size. For what it’s worth, regardless of your analysis, the second attitude used as an example is the healthier approach.
https://media.dailyfx.com/illustrati...h_1790700c.png
However, it’s probably best to take the pressure of yourself regarding the entry. Why? Because, you likely will get at best a decent entry unless you’re counter-trend trading. It’s an irony or paradox of trading that most new traders fret about the entries but where they decide to exit is the most crucial point.
Learn Forex: EURUSD SSI overlaid on EURUSD Spot Price
https://media.dailyfx.com/illustrati...ent_Shifts.png
This is an opportunity to offer you some tough love. You’re likely going to have poor entries. According to the trend of EURUSD (higher from July 9th, 2013) and trading positioning (net short since July 10th, 2014) most traders have had pretty poor entries seeing that a majority were short in an uptrend. However, the key difference between those who lost capital and survived to trade the next day or better yet trade with the trend and against the majority likely had clear exits planned out.
Two Exit Approaches
This part is simple. As far as I’m concerned, there are only two ways that you can decide to exit a trade (well, three if not having a plan is a way to exit). The first method benefits short term traders and that is exiting on strength in the direction of your entry. Therefore, if you’re buying, you can look for clear resistance points or other methods to exit when others are jumping in. The drawback to this methodology is that you could be exiting as the move is just getting started.
The second method is to the benefit of swing style or longer term traders. The preferred exit methodology for longer-term traders is to exit on weakness or a correction in the trend that you’re entering. Exiting on weakness has two distinct drawbacks and that is you either get taken out on a wick low before the trend resumes and / or, you find yourselves leaving a large portion of your paper profits on the table.
Specific Tools for Both Exit Strategies
We just discussed that you can either decide to exit your trades on strength or weakness. To exit on strength, here are a few methodologies you can use that I’ve found favorable over the years:
My preferred methodology is Pivot targets. In a normal uptrend, I’ll look to exit at the weekly R1 level and in a strong uptrend, my preferred exit is the R2 (reversed for downtrends with S1 & S2). The other two methods have been used successfully by many traders.
For exiting on weakness, the most favored methodologies is a daily close below (above in downtrend):
Emotionally, I believe it’s harder for new traders to exit on weakness. The reason is that it’s easy to beat yourself up for letting so much of your paper profits go away. In order to be comfortable exiting on strength, it’s best to not look at the chart after you exit for a few hours because you don’t want to beat yourself for taking money out of the market. That’s what we’re doing here in the first place!
Happy Trading!
---Written by Tyler Yell, Trading Instructor
More...
-
Static Support and Resistance in the Forex Market
Talking Points:
- Traders can use support and resistance to grade market conditions, define trends, and enter positions.
- We discuss ‘static’ methods of support and resistance in the below article.
- We delve into pivot points, and psychological support/resistance analysis.
One of the first aspects of technical analysis that most new traders learn is the field of support and resistance.
After all, if price has hit a floor with which it may have difficulty breaking through (support) or a ceiling with which it may not be able to rise above (resistance); this can offer a plethora of trade ideas and setups.
Unfortunately, most new traders learn one or two ways of identifying support or resistance; and when they see that it doesn’t work all-of-the-time, they abandon such studies in hopes of finding ‘holy grails’ elsewhere.
Well, holy grails don’t really exist. It often takes the new trader some time to learn this lesson the hard way: There is no strategy or approach or indicator that will allow a trader to always win, no matter how strong the analytical method being employed. Rather, trading is about probabilities and attempting to get them on your side or in your favor as much as humanely possible using this analysis.
Support and resistance has a special role in this analysis. It can be used to grade market conditions, determine trends, identify entry and exit points along with a bevy of other options.
Pivot Points
This is one of the more common mannerisms of identifying support and resistance, and it’s also one of the oldest. Pivot points originated before computers became common in financial markets as floor traders need a quick and easy way to see if prices were ‘cheap’ or ‘expensive.’
So these floor traders developed a short-hand manner of getting support (cheap) and resistance (expensive) levels.
These floor traders would take the previous day’s high, low, and closing prices and would average these
values together to find the ‘pivot’ for the next trading day. Price action trading above this pivot would be ‘bullish’ while prices below would be ‘bearish.’
While this is fine and good, it doesn’t tell us much about support or resistance yet; so to take this a step further, traders would then multiply the pivot by two, and would then subtract the previous day’s low to get the first level of resistance (R1). They can then do the same to find the first level of support (S1), multiplying the pivot value times two and then subtracting the previous day’s high.
After the R1 and S1 values are solved, traders can then move on to the next levels of support and resistance. To find the second level of resistance (R2), traders can add the pivot value to the difference between R1 and S1; and the second level of support could be found by subtracting the difference between R1 and S1 from the pivot value. The full equation is below:
https://media.dailyfx.com/illustrati..._Picture_4.png
As you can see from the equation, pivot points use very basic math to find potential support and resistance levels. Luckily for traders, most charting packages will automatically do this math for us while plotting the support and resistance levels at appropriate intervals.
Pivot Points can be generated for a variety of time frames, and the longer-term pivots will often work best as more traders may be seeing and reacting to those levels.
As with most forms of technical analysis, the longer the term being used in the analysis the stronger the response that may be elicited. Pivot points of monthly and weekly flavors will often attract significant interest, and should be followed by traders even if using shorter-term hourly and four-hour charts.
Monthly and Weekly Pivot Points can bring value on long as well as short time frames
https://media.dailyfx.com/illustrati..._Picture_3.png
Psychological Levels
One of the most alluring aspects of technical analysis is the ability of statistics and mathematics to show patterns in human behavior. Nowhere is this more prominent than in the study of ‘psychological’ levels in financial markets.
Most human beings think in even rounded whole numbers. We can’t help it; our species has evolved to value simplicity. As an example, ask someone how much they paid for their car or their jacket, or even their latte.
They’ll likely round their answer up (or down) to the nearest round number. This type of rounding will often happen in markets as well; as traders place their stops or entry orders at or around these levels in the same way that most human beings will respond when asked how much they paid for their coffee.
GBPUSD Weekly chart with ‘Major,’ and ‘Less Major’ levels identified
https://media.dailyfx.com/illustrati..._Picture_2.png
As you can see, these levels can come up quite often in a market, particularly during strong trends as new prices run into fresh resistance levels (or support levels in the case of a down-trend).
This study of support and resistance can be taken a step further with the ‘minor’ prices that are set in 25-pip increments; known as the ‘minor’ psychological levels. In the chart below, we’ve moved down to the hourly chart in the same market looked at above (GBPUSD) with the addition of these more granular ‘minor’ levels:
Hourly GBPUSD with Minor psychological levels added (25-pip increments)
https://media.dailyfx.com/illustrati..._Picture_1.png
With psychological levels taking place every 25 pips, there are numerous opportunities for traders to ‘catch swings’ in a market.
To put more power behind psychological levels or pivot points, traders can look for confluence amongst these analytical methods; including the dynamic support and resistance mechanisms that we’ll investigate in our next installment.
--- Written by James Stanley
More...
-
Allow Pivot Points to keep your Emotions in Check for Better Entries
Talking Points:
- Emotions Gone Wild
- Using Pivots to See Common Chart Points
- Finding Great Range Entries of Pivots
There’s a common belief that most market moves are the result of two emotions, greed and fear. However, it may be appropriate to look at greed as another side to the same coin of fear because greed is often acted on in the fear of missing out of a ripe trade. Naturally, emotionally entries are rarely good entries and we’ll take a look at using pivots to keep your emotional reaction out of trading so that you can objectively find good entries on the emotional extremes of others.
Emotions Gone Wild
https://media.dailyfx.com/illustrati..._Picture_1.png
Recently, a very important question was asked. The question could be boiled down to, why do low balance traders consistently underperform high-balance traders across the board? The answer is important for traders of all balances.
The answer summed up is that traders with a low balance are more likely to need the money in their account for other expenses and thus are more likely to act on fear. The antithesis is the high balance accounts that have a specific advantage over the little balanced traders. In one phrase, they do no need the money or the markets and can therefore, act with little or no emotion. Put another way, traders who don’t need the market are “Fearless.”
Using Pivots to See Common Technical Extremes
Without pivots, it’s easy to chase price. If you’re not familiar with the concept of chasing price, it is akin to entering on an extended move. However, a similar flaw that many traders come up against is fading a strong trend. These seem like opposing forces and therefore, at least one of these groups of traders should overall be successful. However, if traders are emotionally guided, they will continue to enter and exit on excitement, which can be fatal to growing an account balance.
Learn Forex: Weekly Pivots on USDCHF Allows Traders to See the Forest for the Trees
https://media.dailyfx.com/illustrati..._Picture_2.png
This morning saw one of the more aggressive USD selling routs of 2014. While there are a handful of explanations to the selling, the emotional pull to chase price and sell on an extended move warrants caution. As you can see above, the weekly pivot S2 level was hit on Monday morning of the week of June 30th. This means an extended move opening the week and chasing that price could prove costly when you consider recent extreme moves in relation to weekly pivots.
Learn Forex: Historical Pivots on USDCHF Favor Fighting the Temptation to Chase
https://media.dailyfx.com/illustrati..._Picture_3.png
Finding Great Range Entries of Pivots
One way to be methodical is to wait for a favorable entry that aligns with a technical convergence through pivots and or other levels. Only then, you can take a low risk: high reward trade that over time can help you trade your way toward your trading goals.
Learn Forex: Many Levels Align on EURUSD for the Patient FX Trader
https://media.dailyfx.com/illustrati..._Picture_4.png
Over time, waiting for set-ups like these to unfold can help the market come to you as opposed to you chasing the market.
Happy Trading!
---Written by Tyler Yell, Trading Instructor
More...
-
Trade Breakouts with Pivot Points
Talking Points
- An increase in volatility can cause price to breakout
- Camarilla Pivots can be designated for planning order entries
- Traders can use 1x extension of the trading range for profit targets
While price may spend the majority of its time reversing between lines of support and resistance, there will also be periods of volatility when price breaks out. A price breakout simply refers to the price of a traded asset moving through a pre-designated area of either support or resistance. Savvy traders can then prepare to look for these opportunities by finding these values on their graph. To help plan for a breakout, we will continue our review of camarilla pivots.
AUDNZD Breakout
https://media.dailyfx.com/illustrati..._Picture_2.png
Support, Resistance, & Breakouts
We will first need to identify existing points of support and resistance. When added Camarilla pivot points to the graph, these pivots will allow traders to spot a breakout using the R4 and S4 lines now available on their graph. Now traders can consider a series of options for trading.
The easiest way to trade breakouts is through the use of a series of order entries. Entry orders set above resistance will be waiting to buy the market in the event price moves to higher highs.
Conversely, orders to sell below the S4 line of support will be triggered upon the market moving to lower lows. Traders that would like more confirmation may also consider waiting for a candle close, then triggering a market order. The key is to get into the market on a new surge in price, which generally transpires along with an economic announcement.
AUDNZD Entry and Target
https://media.dailyfx.com/illustrati..._Picture_1.png
Risk & Profit Targets
As with any trading strategy, traders should spend as much time planning their exits as they do their entry orders. Through the use of Camarilla Pivots, traders again can develop a very systematic methodology for exiting the market. Since the market is breaking out, risk can be managed by placing stop orders inside of the designated trading range. The rationale behind this is that if market conditions change, traders should close their positions and look for other opportunities.
Once a stop is found, traders can then set a profit target. Since our pivot points are calculated using a fraction of the previous day’s trading range, we can again use the designated values for profit targets. Traders can look for a minimum of 1 times the denoted range, which in the example of the AUDNZD above would be 28 pips. This would equate to a 1:2 risk reward ratio when used with a standardized stop.
---Written by Walker England, Trading Instructor
More...
-
Pivot Points for Risk Management
Talking Points
- Pivots Can Identify Changes in Trading Conditions
- Stops Should Be Used When a Trade Idea is Invalidated
- Traders Should Look for a 1:2 Risk/Reward Ratio or Better
Managing risk is a concept all traders need to come to grips with when creating an active trading plan. This is especially important when trading a scalping or day trading based strategy. Market conditions can change rapidly, and when the market is moving against you, it is better to already have a plan to exit losing positions. This way you know exactly when and at what price you wish to close your trades before the market gets to that point. Today we will continue our look at camarilla pivots by learning how to manage risk in both range and breakout price reversal scenarios.
Let’s get started!
GBPJPY Breakout
https://media.dailyfx.com/illustrati..._Picture_3.png
Risk and Breakouts
For traders implementing a breakout strategy, a false breakout is always a major concern. A false breakout consists of a trade which is entered on price moving through a value of support or resistance, and then moving immediately back through this value. While there is no way to prevent a false breakout, traders can set stops to exit the market in the event breakout conditions end.
Above we can see an example of how risk can be contained in the event of a breakout. Stop orders can be set inside of the previously identified trading range using camarilla pivots. This area has been selected for stop order placement, because it identifies an area where market conditions are changing. When the market is ranging, traders should not be holding onto breakout positions. This means in the event price drops back below the R3 value, any existing breakout positions should be closed.
GBPNZD Range
https://media.dailyfx.com/illustrati..._Picture_2.png
Risk and Ranges
Traders using camarilla pivots also have the ability to identify and trade daily ranges. Just like our breakout example, risk should be monitored and contained through the use of a stop loss. While breakout traders look for breaches of support and resistance, range traders look for price to stay inside of these pre identified price levels. In the event of a price breakout, traders should be able to identify the changing market conditions and again manage risk on any existing positions.
Above we can see a range reversal playing out on the GBPNZD. Price is continuing to ping between values of support and resistance. While price targets can be set at the opposing side of a range, positions should be exited in the event of a breakout. Traders can use the S4 and R4 camarilla pivots for this task. Stops can be set at these values and if price makes a higher high or lower low, any existing range trades can be closed.
https://media.dailyfx.com/illustrati..._Picture_1.png
Risk and Reward
The next step to managing risk is understanding Risk/Reward ratios. A Risk/Reward ratio simply compares the amount of pips your risk on a trade, relative to your profit target in pips. For instance in the example above, traders would be risking 33 pips while looking for a 66 pip profit target on the GBPNZD. When we ultimately look at the ratio, it creates a 1:2 Risk/Reward ratio. This means we were looking for 2x as many pips in profit for every pip placed at risk.
More...
-
FX Reversals: USDCAD Tests Support
Talking Points
- USDCAD Tests S3 Support
- Range Resistance Found at 1.0992
- Prices above R4 Signal a Breakout
USDCAD 30min Chart
https://media.dailyfx.com/illustrati..._Picture_1.png
As seen in the chart above, the pair has retraced to its daily range support found at the S3 camarilla pivot near 1.0951. If support holds, traders may look for price to bounce back towards resistance. Range resistance is currently found at 1.0992, which can also be used as a primary target for range reversal traders.
Next, traders should pay attention to today’s two breakout values. A break of price above R4 at 1.1012 would show a strong bullish continuation with the creation of new higher highs. This directly contrasts with a break below S4 at 1.0931. A move below last support would potentially expose the market to a broader market reversal. In the event of a breakout, it should be noted that market conditions are changing and signal an end of range bound markets. Traders can then consider positioning themselves with new market momentum.
https://media.dailyfx.com/illustrati..._Picture_4.png
---Written by Walker England, Trading Instructor
More...
-
FX Reversals GBPJPY Begins Week at Highs
Talking Points
- GBPJPY Starts Week Breaking to Highs
- R4 Resistance Sits at 171.36
- Range Resistance Begins at 171.08
GBPJPY 30min Chart
https://media.dailyfx.com/illustrati..._Picture_2.png
The GBPJPY has started the trading week breaking above todays R4 camarilla pivot at 171.36. This movement towards high highs is at odds with last week’s trend with the majority of GBP crosses closing near weekly lows. Intraday momentum traders can take advantage of this directional reversal and continue to look for areas to buy the GBPJPY in the event prices progress towards higher highs.
In the event that upward momentum subsides, traders should look for a false breakout back in the direction of the prevailing trend. A move back below R3 resistance would signal and end of today’s breakout and suggest a return towards key values of support. Currently the USDJPY range measures 56 pips, with the R3 camarilla pivot at 171.08 and S3 range support found at 170.52. If price enters into the day’s trading range, traders should consider concluding breakout positions and look to trade in the markets new direction. A move below the S4 support line at 170.24, would open up the possibility of another breakout back in the direction of last week’s trend.
https://media.dailyfx.com/illustrati..._Picture_3.png
More...
-
Hello Forecastle,
just want to know is it the same way or method you are using to calculate the daily, weekly and monthly pivot point?
Also what does this /3 stand for ? is it divided by 3 or what and 2* is it multiply by two or what. if it is possible can you please make some sample with illustration of the candle to shoul how you get all those figures for pivot point, support and resistance levels.
Many thanks
Pivot Point = (Previous High + Previous Low + Previous Close) / 3
The other levels are created using the aforementioned Pivot value. Marketscope contains the pivot point indicator for daily, weekly and monthly levels, but yearly has yet to be added. The lines on my chart are drawn manually for your use.
Resistance Level 1 = (2 * Pivot Point) - Previous Low
Support Level 1 = (2 * Pivot Point) - Previous High
Resistance Level 2 = (Pivot Point - Support Level 1) + Resistance Level 1
Support Level 2 = Pivot Point - (Resistance Level 1 - Support Level 1)
Resistance Level 3 = (Pivot Point - Support Level 2) + Resistance Level 2
Support Level 3 = Pivot Point - (Resistance Level 2 - Support Level 2)
-
Calculation:
OHLC
Very simply OHLC is an acronym for Open, High, Low and Close. It describes these metrics for the previous trading day/week/month. The OHLC whilst offering its own very valuable input for Support and Resistance is also the basis for a wide range of calculations derived from it which will be described in the next section.
Calculated Pivot Points
Pivot Points are generally mathematically derived Support and Resistance levels, from the OHLC of the previous trading day, using a variety of formulas with names including, Standard, Camarilla, Woodie, Floor and DeMark.
Standard Pivot Point Calculation
To calculate the Standard Pivots the formulas below are used. This formula uses the range of the given time frame, daily, weekly, monthly etc. Which is calculated by (High-Low), R1-R4 denote Resistance Levels, PP describes the Pivot Point, S1- S4 are Support levels.
R4 = R3 + (H - L)
R3 = R2 + (H - L)
R2 = PP + (H - L)
R1 = (2 * PP) - LOW
PP = (HIGH + LOW + CLOSE) / 3
S1 = (2 * PP) - HIGH
S2 = PP - (H - L)
S3 = S2 - (H - L)
S4 = S3 - (H - L)
Camarilla Pivot Point Calculation
To calculate the Camarilla Pivots the formulas below are used. This formula uses the range of the given time frame, daily, weekly, monthly etc. Which is calculated by (High-Low), R1-R4 denote Resistance Levels, S1- S4 are Support levels. The actual Camarilla number set does not have a PP and includes the Close (C) in its calculation
R4 = (H - L) * 1.1/2 + C
R3 = (H - L) * 1.1/4 + C
R2 = (H - L) * 1.1/6 + C
R1 = (H - L) * 1.1/12 + C
S1 = C - (H - L) * 1.1/12
S2 = C - (H - L) * 1.1/6
S3 = C - (H - L) * 1.1/4
S4 = C - (H - L) * 1.1/2
Woodie Pivot Point Calculation
To calculate the Woodie Pivots the formulas below are used. This formula uses the range of the given time frame, daily, weekly, monthly etc. Which is calculated by (High-Low), R1-R4 denote Resistance Levels, PP describes the Pivot Point, S1- S4 are Support levels. This formula also includes the Open.
R4 = R3 + (H - L)
R3 = H + 2 * (PP - L)
R2 = PP + (H - L)
R1 = (2 * PP) - LOW
PP = (HIGH + LOW + (OPEN * 2)) / 4
S1 = (2 * PP) - HIGH
S2 = PP - (H - L)
S3 = L - 2 * (H - PP)
S4 = S3 - (H - L)
Floor Pivot Point Calculation
To calculate the Floor Pivots the formulas below are used. R1-R3 denote Resistance Levels, PP describes the Pivot Point, S1- S3 are Support levels.
R3 = (P - S1) + R2
R2 = (P - S1) + R1
R1 = (2*P) - L
PP = (H + L + C)/3
S1 =(2*P) – H
S2 = P - (R1 - S1)
S3 = P - (R2 - S1)
DeMark Pivot Point Calculation
To calculate the DeMark Pivots the formulas below are used. This calculation method differs slightly from the others in terms of its structure, The PP is not an official DeMark Number but is required to calculate the formula.
The value of X in the formula below depends on where the Close of the market is.
If Close < Open then X = (H + (L * 2) + C)
If Close > Open then X = ((H * 2) + L + C)
If Close = Open then X = (H + L + (C * 2))
R1 = X / 2 - L
PP = X / 4
S1 = X / 2 - H
read more here
=======================================
AllPivots
- AllPivots_v3 indicator is on this post.
- AllPivots_v3.1 indicator is here. This is updated version of AllPivots with ability to plot Woodie's Pivots (PivotMode = 5 and BasePrice = 7).
- AllPivots_v3.2 indicator is on this post.
- AllPivots_v3.3 indicator is on this post.
- AllPivots_v3.4 indicator is on this post.
- AllPivots_v3.5 indicator is on this post. This is the version improved by new parameter - DescriptionPlace
- How to use this indicator by settings - read this post.
- AllPivots_v3.6 indicator is on this post. Two new parameters to the new version for sessiona start/end for stock market.
- AllPivots_v3.7 indicator is on this post. In this version - we can with plot Yearly Pivots
- SDK-Pivots-v1.3 indicator is on this post.
- SDK-Pivots-nmc indicator is on this post. This version works with Metatrader 4 build 600 and above.
- Camarilla AlertwFibs indicator is on this post
- AllPivots_v3.8 indicator is on this post. This version works with Metatrader 4 build 600 and above.
- AllPivots_v3.9 600+ indicator with 'no Sunday bar' is on this post. This version works with Metatrader 4 build 600 and above.
Premium section:
RINA Pivots are on this thread:
- RINA Pivots_v1 600+ indicator is on this post. This version is for the build 600 and above
DB Strategy
- manual about how to trade is on this post.
- DB_Strategy_v4.6 600+ indicator is on this post. This version is for the build 600 and above
- DB_Strategy_v4.7 600+ indicator is on this post. This is updated DB_Strategy indicator with ability to plot the Trader's Pivots and the arrow descriptions. This version is for the build 600 and above
-
The Pivot Point Cheat Sheet
Talking Points:
- Camarilla Pivots Establish Daily Support & Resistance Lines
- The Pivot Range is Found Between the R3-S3 Pivot
- Trend Traders can Develop a Bias First, Before Trading
Trading poses unique challenges, and technical traders can apply a variety of indicators to help them along the way. Day traders often chose pivot points, such as Camarilla pivots, to aid in their analysis of support and resistance. Once added to the chart, these values can assist traders by establishing key pricing points to monitor and help confirm trading decisions. To bring you up to speed with Camarilla Pivots, we will begin with a review of three ways the indicator can be used in your day trading. Let’s get started!
Pivot Range
A range is known as a sideways market with price trading in between established lines of support and resistance. Range traders can benefit greatly from Camarilla Pivots, as each day the indicator will offer a new range for trading. As seen below traders looking for short term range reversals should primarily focus on price moving between the S3 and R3 pivots. This area is known as the daily trading range, and can allow range traders clear areas to plan their market entries.
Traditionally, range reversal traders will look for price to move toward either a point of support or resistance. If resistance holds range traders will look to initiate sell based positions near the R3 pivot, with the intent of price moving to support. Conversely, if price remains supported above the S3 Camarilla Pivot, range traders will look to initiate buy based positions near the S3 pivot with the intent of price moving back towards the R3 resistance pivot. However, it should be noted that price can stay range bound throughout the day.
https://media.dailyfx.com/illustrati...0000_i1025.png
The Breakout
A breakout is a strong directional move that pushes price either through a key line of resistance or a specific point of price support. These areas on the graph can easily be identified by finding either the R4 or S4 pivot on your graph. If either of these points is met, it will symbolize an extremity in price. This will allow traders to then initiate new positions anticipating that price will continue in the direction of the identified price break.
Breakout trading is all about momentum as the market must continue in a singular direction once an entry order is initiated. Below is an example of a sample breakout trade, where an order can be initiated once price moves above and breaks out of the R4 pivot. As price moves to higher highs, traders can set take profit orders to exit positions based on an extension of the daily trading range. Additionally, stops should be placed below entries in this example to prepare for the possibility of a false breakout.
https://media.dailyfx.com/illustrati...0000_i1026.png
Market Trends
Camarilla Pivots can also allow traders to initiate trades in the direction of a strong market trend. Once a directional bias has been created, traders can then look to sell a currency pair in a downtrend or buy as price advances in an uptrend. This procedure is different from the previously mentioned range or breakout scenario, as traders must first consider market direction prior to looking for a retracement or a breakout for their entries.
A retracement is a pullback in the trend, and normally considered the first way to trade a directional market. In the example below, notice how traders are only looking to sell the EURNZD inside of the trading range on a pullback to the R3 camarilla pivot. By only initiating sell positions, traders will profit in the event that prices move back in the direction of the trend. Also, traders can look to initiate another directional trade upon a breakout of the S4 pivot. At this point, traders can also consider selling the market much like a traditional breakout trader. The only caveat is, in a downtrend no buy based positions should be considered!
https://media.dailyfx.com/illustrati...0000_i1027.png
Getting Started with Pivots
As you can now see, Camarilla Pivots can be beneficial to a variety of day traders across multiple market conditions. The key is to have an idea of what you are looking for in your trading plan and then applying your pivot points appropriately. In order to practice what you have learned here today, you can begin by applying for a FREE demo with FXCM. This way you can apply pivot points to your charts, while practicing your day trading strategy in real time.
More...
-
Strategy Series, Part 5: Day Trading Reversals
Talking Points:
- Day Trading can Offer Multiple Daily Positions
- Camarilla Pivots can Determine Intraday Support & Resistance
- Reversal Ranges Offer Clear Areas to Manage Risk
Day trading is a popular approach to Forex trading; with many strategies available traders have the opportunity to take multiple positions each day. This can allow traders that don’t wish to hold for the long term to take advantage of intraday market moves, between lines of support and resistance. Today we will continue our conversation on strategies, by reviewing trading intraday reversals with the “DT Pivot” strategy. Let’s get started!
Learn Forex – USDCAD Reversal Range
https://media.dailyfx.com/illustrati..._Picture_1.png
Pivots for Support & Resistance
Markets are prone to turn at existing points of support and resistance, so the first step is to identify these points on your chart. To simplify the process, for today’s “DT Pivot” strategy, we will be adding camarilla pivots to the chart. These lines are calculated using percentages of the previous day’s trading range which, when added to the graph, creates a clear idea of where price may be supported or reach a barrier of resistance.
As seen above, Camarilla Pivots label resistance lines R1-R4, and support lines S1-S4. R4 and S4 are considered extremities in price—demoting a breakout. Traders looking for short term reversals should focus on price movements between the S3 and R3 pivots. This is known as the trading range, and can afford traders short term day trading possibilities if price stays between these values. Let’s look at how a short term turn in the market can be traded.
Learn Forex – USDCAD Range Entry and Target
https://media.dailyfx.com/illustrati..._Picture_2.png
Trading Range Reversals
Now that support and resistance have been identified, through the use of camarilla pivots, traders can begin planning their entry. The key is to sell the market at resistance. This can be done once price has touched the R3 pivot and a 30 minute bar closes inside the pivot range. Conversely, traders should look to buy the market after price touches the S3 pivot, but only after a 30 minute bar closes inside the pivot range. Since candle confirmation is used with the “DT Pivot”strategy, traders can enter into a trade using market orders.
Above we can see several sample entries using this order logic. First, Entry 1 would be considered after the first highlighted wick passes through the R3 line of resistance. However, execution would not occur until the bar closed inside of the range on the 30 minute chart. At this point traders would look to sell the market in anticipation of a reversal back to support. For Entry 2 the same rules apply, however traders will look to buy at support. After price tests the s3 pivot, and price closes inside of the range, traders will execute a new buy position. Once a trade is entered it is time to plan the exit strategy.
Learn Forex – USDCAD Stop Placement
https://media.dailyfx.com/illustrati..._Picture_3.png
Stop and Limit Orders
Traders should always have a plan for managing their position. Eventually the range will come to an end and any existing trades should be exited. When initiating a buy order, stop orders should be placed at the S4 pivot. That way if prices break to a lower low, all buy trades will be closed. Conversely if a trader is selling resistance at the R3 pivot, stops can be placed at the R4 pivot as seen above.
When it comes to profit targets, the “DT Pivot” reversal strategy looks for a full extension of the range. This means if you are selling resistance at the R3 pivot, your take profit point will be the S3 pivot. Conversely, if you buy at the S3 pivot, traders will target range resistance at the R3 pivot. Using pivots for these orders will allow traders using the “DT Pivot” strategy, to achieve close to a 1:2 Risk/Reward profile on most positions.
Learn More
The “DT Pivot” reversal trading strategy is just one installment of an ongoing article series on market strategies. If you missed one of the previously mentioned strategies, don’t worry! You can catch up on all of the action with the previous articles linked below.
Strategy 1: Trading Inside Bars with OCO Orders
Strategy 2: The Easy MAC
Strategy3: The CCI Swing
Strategy 4: The HI-Low Breakout
---Written by Walker England, Trading Instructor
More...
-
EURUSD Moves on Lower Lows
- EURUSD Opens to a Lower Low
- Range Support Sits at 1.0652
- Counter Trend Reversals Begin Over R4
EURUSD 30 Minute Chart
https://media.dailyfx.com/illustrati..._Picture_1.png
The EURUSD has opened Wednesdays trading with the creation of a new weekly lower low. This decline is significant as the pair has declined as much as 347 pips week to date. However, despite its weakness the EURUSD is attempting to trade back above todays S4 Camarilla pivot at 1.0607. While this does not negate the current downtrend, traders will watch to see if price moves back into today’s trading range starting at the S3 pivot near 1.0652. In the event price breaches this point, traders may begin looking for a move back up towards range resistance at 1.0741.
In the event that price begins to again gain momentum, trend traders may elect to look for a breakout again under the S4 pivot. This would signal a potential increase in USD strength and traders would look for further declines at this point. Conversely if price trades through todays range, towards the R4 pivot at 1.0786, it would suggest price beginning a larger counter trend move with the creation of a new higher high.
--Written by Walker England, Trading Instructor
More...
-
2 Attachment(s)
EURUSD Morning Reversal
Talking Points
- EURUSD Opens to a False Breakout
- Price Breaks below its 63 pip range
- S4 support Sits at 1.0906
EURUSD 30Minute Chart
https://media.dailyfx.com/illustrati..._Picture_1.png
The EURUSD has opened the day with a false breakout in early London trading. Prices moved above resistance found at the R4 Camarilla pivot near 1.1031, but quickly slipped back into the pivot range. Range resistance begins at the R3 pivot found at the psychological 1.1000 price point. Immediately price continued to decline down to range support found at the S3 pivot at a price of 1.0937.
Attachment 12483
Attachment 12484
Currently price is again trading outside of its 63 pip range. In the event that price begins to decline further, trend traders may elect to look for a breakout under the S4 pivot. This would signal a potential increase in USD strength and traders would look for a reversal back in the direction of the markets predominant trend. Conversely, if price moves back inside of range support, this may temporarily suspend any further attempts at a market breakout.
https://media.dailyfx.com/illustrati..._Picture_2.png
---Written by Walker England, Trading Instructor
More...
-
EURUSD ECB Support and Resistance Update
Talking Points
- EURUSD opens in a range despite News
- Range resistance it’s at 1.0702
- A break below S4 support has bearish implications
EURUSD 30 Minute Chart
https://media.dailyfx.com/illustrati..._Picture_3.png
The EURUSD has opened the day moving towards support in early London trading. However, despite the ECB holding its banking rate announcement today, the pair has yet to breakout. Currently price is found near range support at the S3 Camarilla pivot near 1.0606. In the event that price remains supported, traders will begin to look for a bounce in price towards levels of resistance, including the R3 pivot found today at a price of 1.0702.
Despite price opening inside of a 96 pip range, statements from the ECB still have the ability to progress price to a breakout point. A EURUSD decline below the S4 pivot at 1.0557 would suggest a return to USD strength and raise the possibility of the creation of future lower lows. Conversely, if price moves back through its trading range, and breaches the R4 pivot at 1.0751, this would open the market for a potentially broader bullish move.
https://media.dailyfx.com/illustrati..._Picture_4.png
---Written by Walker England, Trading Instructor
More...
-
EURJPY Day Trading Range
Talking Points
- Today the EURJPY has opened in a 99 pip range
- Price sits near its central pivot at 129.45
- A break below 128.46 would suggest a broader reversal
EURJPY 30 Minute Chart
https://media.dailyfx.com/illustrati..._Picture_1.png
The EURJPY has been slowly advancing this week rising as much as 266 pips off of Tuesdays low of 127.45. However, price has found resistance going into Friday’s close beneath 130.00. Currently, the pair is trading near its central pivot at 129.45. Price moved to this point after previously testing both sides of its daily trading range. Today’s trading range begins at the S3 Camarilla pivot at a price of 128.95 and ends at the R3 pivot point at 129.94.
In the event that price continues to range, and any attempted breakout fails, traders should continue to watch support and resistance values inside of todays 99 pip range. If a late breakout does occur, price above the R4 pivot at 130.44 would signal a significant continuation of this week’s trend. Alternatively, a move below the S4 pivot at 128.46 opens the possibility of the week ending in a broader price reversal.
https://media.dailyfx.com/illustrati..._Picture_2.png
---Written by Walker England, Trading Instructor
More...
-
2 Attachment(s)
FX Reversals: EURUSD Breakout Fails
Talking Points
- An Initial bullish breakout fails for the EURUSD
- Range reversals begin at 1.0964
- Range support starts at 1.0934
After traversing its daily 30 pip range, the EURUSD has opened the US trading session with a false breakout. Prices attempted a move above today’s R4 Camarilla pivot at 1.0979, but this bullish breakout quickly reversed. Prices are currently tradingback inside of today’s pivot range. As seen below, the EURUSD’s trading range begins at resistance found at the R3 pivot, at a price of 1.0964. If price continues to decline through values of support, traders will begin to look for price to target the S3 pivot found at a price of 1.0934.
Even though the EURUSD is trading back inside of today’s range, changes in market conditions may always keep the possibility of another breakout open. In the event that price begins to again advance above the R4 pivot, this would suggest another attempt at bullish momentum for the day. Conversely, if prices completely reverse, then traders will look for the EURUSD to trade below the S4 pivot found at 1.0919.
more...
-
1 Attachment(s)
AUDUSD attempts 3rd Daily Breakout
Talking Points
- Today’s AUDUSD trading range measures 56 pips
- R3 range resistance is found at .7026
- Bearish breakouts begin under .6943
AUDUSD 30 Minute Chart
Attachment 16039
The AUDUSD is threatening to breakout to new weekly lows this Thursday. As of the US Open the pair has already tested the S4 Camarilla pivot, found at a price of .6943. In the event that the pair trades below this value, it would be considered a bearish breakout. So far, the AUDUSD has declined in the three previous trading sessions, and a breakout here would be the third bearish breakout in the four previous trading sessions. If prices continue to decline, traders may use a 1x extension of today’s 56 pip range to measures a preliminary pricing target. As measured from the S4 Camarilla Pivot, this places initial targets at a price of .6887.
Alternatively, if prices re-enter into today’s trading range, starting at the S3 pivot found at .6970, it may open up the pair to a potential price reversal. This scenario includes prices attempting to move through values of resistance including the R3 range resistance pivot found at a price of .7026. A full bullish reversal would also be considered if prices broke above the R4 pivot at .7054. In either reversal scenario, the current short term bearish momentum would be invalidated. At which point, trend traders should at least temporarily consider putting any sell based positioning on hold.
https://media.dailyfx.com/illustrati..._Picture_2.png
more...
-
1 Attachment(s)
The EUR/USD Retraces to Daily Pivot Resistance
Talking Points
- The EUR/USD tests resistance in a 68 pip range
- Range resistance starts at a price of 1.0828
- Bearish breakouts are signaled beneath 1.0727
Attachment 16472
The EUR/USD has opened Thursday’s trading range bound, traveling between its R3 and S3 Camarilla pivots pictured above. At present, price is again working on traversing its 68 pip trading range after testing resistance in early trading at a price of 1.0896. If price continues to trade inside of the pivot range, it opens the EUR/USD to move back towards key values of support. Currently, range support is found at the S3 pivot found at 1.0828. A move back towards support would be considered significant, as prices would be trading back in the direction of the pair’s primary trend.
In the event that the EUR/USD fails to remain supported above today’s S4 pivot at 1.0795, it opens up this morning’s price action to be interpreted as a retracement in a broader downtrend. Traders may begin looking for opportunities to trade fresh breakouts at this point, as the pair would be creating new weekly lows below S4.Traders, looking to target a 1X extension of todays 68 pip range on a breakout, may initially start looking for targets at a price of 1.0727. In the event that the current trend fails to continue, traders may begin looking for a bullish reversal over the R4 pivot point at 1.0931. In this scenario, the current downtrend would be considered at least temporarily suspended. At this point active traders may consider concluding any open sell based positions, or changing their trading bias with the market conditions.
more...
-
1 Attachment(s)
USD/CAD Pivot Points Analysis
D1 price is located to be above yearly Central Pivot at 1.3157 for the primary bullish market condition:
- The price is on ranging within Central PP at 1.3157 and R1 Pivot at 1.4670;
- Ascending triangle pattern was formed by the price to be crossed to above for the bullish trend to be continuing;
- "The USD/CAD is attempting to breakout to a higher high this morning, potentially ending the range bound conditions that have been developing for the last five trading periods. Today’s bullish breakout is marked by the R4 Camarilla pivot point, which is found at a price of 1.4030. In the event that prices continue to rise above this value, traders may extrapolate today’s 85 pip trading range to place initial breakout targets near 1.4105."
- "Breakout traders should continue to monitor the R3 pivot point found at 1.4086. A move in price back inside of range resistance would suggest that the current breakout attempt has been invalidated. It should be noted at this point that the USD/CAD has already failed one breakout attempt today. In this scenario, traders may look for bearish momentum to carry the pair back towards values of support. This includes today’s R3 pivot, which is displayed above as range support at 1.4041."
Attachment 18455
Instrument
|
S1 Pivot
|
Yearly PP
|
R1 Pivot
|
USDCAD |
1.2314 |
1.3157 |
1.4670 |
more...
-
2 Attachment(s)
Dow Jones Industrial Average Trades Heavy into Resistance
Talking Points
-Dow Jones has been trading sideways since last Wednesday as SSI shifts towards bulls
-Triangle pattern is our technical roadmap for price suggesting another 5-7% selloff
-DJIA support near 16,500 and possibly 15,750
Dow Jones Industrial Average (DJIA) has been trading sideways for the past 3 trading sessions. DJIA closed yesterday near their closing level for March 23. Running into a holiday weekend, it makes sense that activity and volume was muted.
Attachment 19876
The sideways price action in the US30, a CFD which tracks the DJIA, also provides a clue about the market’s respect for the technical pattern noted in previous reports (see links at the bottom). We have previously highlighted a potential triangle pattern that may trigger a selloff of nearly 5-7% towards 16,500 and possibly 15,750. Prices don’t have to fall, but using the triangle as the road map, look for some softening in the coming days.
Attachment 19877
Above 18,000 we can consider the triangle pattern to be voided and we’ll shift our roadmap to our alternative technical patterns.
https://media.dailyfx.com/illustrati..._Picture_3.png
more...
-
1 Attachment(s)
Large Gain in Dow Jones Industrial Average Presses Resistance
Dow Jones Industrial Average closed up over 200 points on Tuesday. The move higher pressed into a zone of resistance near 17,928. Though we think prices will eventually dip into support zone 2 identified in last week’s report, the wave structure allows for price to bump up to 18,340 and still be considered corrective.
Attachment 20902
In essence, we are looking for a downward corrective structure that eats up more time than price.
In the meantime, we look for clues about near term support or resistance.
Therefore, a break and close above yesterday’s high would open the door to higher levels up to 18,340. Remember, this could be a ‘B’ wave which tends to be sucker waves. In this case, below 18,340 keeps the ‘B’ wave option on the table for an eventual retest towards 17,550 and possibly lower.
As a result, we are cautiously bullish on the short term. A shorter term trader may consider a breakout above Tuesday’s high, while targeting the April 20 high. The overnight low could be the risk near 17,830.
Below 17,830 and to the May 6 low of 17,550 becomes no man’s land. If price prints into that zone, we’ll await more clarity while anticipating an eventual dip to support zone 2.
more...
-
2 Attachment(s)
Gold Prices Rebound After Yellen’s Testimony Concludes
Attachment 23552
The price of Gold is rebounding this afternoon after posting daily lows at $1,317.89. This morning’s decline was coupled with a rising US Dollar as Fed Chair Janet Yellen testified before congress. Yellen’s testimony yielded little in the way of future policy, but the Chair did note that the Fed has no “fixed timetable” for adjusting their current stance on monetary policy. With little information being yielded on the fundamental front, traders may turn to short term technical values to help determine the direction of Gold Prices
Attachment 23553
more...
-
1 Attachment(s)
Dow Jones Industrial Average Flirts with 20,000
Based on the consolidation that began December 14, it does appear as though DJIA may dip slightly to finish the consolidation pattern. A dip appears poised to move towards 19,750-19,840. At this point, we do not think it will extend much, but could work its way back down towards 19,000-19,250.
Attachment 25027
The medium term pattern does appear incomplete to the upside. Therefore, we anticipate the dips would be supported near one of the previously cited levels.
If price moves below 19,000 it may become an early warning signal that another pattern is at play and we will have to reassess the wave relationships. Below 18,600 we will abandon the pattern altogether.
If prices are supported and move higher, the next level of wave relationships show up near 21,378. It would take a successful breakout above 20,000 for us to consider focusing on the higher level.
more...
-
1 Attachment(s)
USD/CAD Weekly Trend: price is ranging near and below Yearly Central Pivot at 1.3575
The USD/CAD is trading to fresh monthly highs this morning, despite Canadian GDP data being released above expectations. Today’s CAD GDP (YoY) (Dec) was expected in at 1.7% but was released at an actual 2.0%. While the USD/CAD's rally temporarily stalled on this news, the pair's weekly trend now spans 311 pips from high to low since Monday.
Attachment 25853
Technically, the USD/CAD is now trading directly below a critical point of daily resistance. This point is the January 20th swing high, seen in the graph below at 1.3388. While the USD/CAD is trading well above its 10 day EMA (exponential moving average) and 200 day MVA (simple moving average), if prices fail to breakout higher it may suggest that the USD/CAD is prepared to retrace some of this week’s gains. Alternatively, a breakout above 1.3388 should be seen as a strong bullish continuation signal. A daily close to a higher high above this point would suggest that the current USD/CAD uptrend may have more room to run.
more...
-
3 Attachment(s)
RINA Pivots based on Dynamic Zones algorithm
This is the the RINA Pivots that are based on the Dynamic Zones algorithm:
Attachment 27633
Attachment 27634
Attachment 27635
----------------
Premium section links:
RINA Pivots are on this thread:
- RINA Pivots_v1 600+ indicator is on this post. This version is for the build 600 and above
-
3 Attachment(s)
Pivotal Points - indicator for MetaTrader 5
Pivotal Points - indicator for MetaTrader 5
Attachment 32216
Attachment 32217
Attachment 32218
Quote:
Pivotal points as described in the March 2009 SFO magazine article "Trading FX Like Jesse Livermore Traded Stocks" by Jamie Saettele.
Livermore's strategy was based on what he termed "pivotal points". Most traders today are aware of pivot points, and many traders use some form of pivot points (of which there are too many to count) in order to identify support and resistance, which aids in entering and exiting trades. Livermore was the first trader to refer to a pivot concept. If he was not the first, then he certainly was one of the first.
Livermore defined pivotal points as days that contained heavy volume. After a prolonged move, significantly increased volume was a key signal to him that the market was at the end of its major move. Rather than exit his position instantly, he would wait for the market to roll over and confirm that what he saw was what he referred to as a reversal pivotal point. At the end of a trend, a reversal pivotal point may be referred to today as a blow off top or a panic bottom.
However, not all pivotal points lead to reversals. Heavy volume is often present not just at the end of a major move but also toward the middle of a trend. Take a look at a stock chart to see for yourself. If, for example, heavy volume occurs and the market in question does not roll over right away (or bounce right away), then a continuation pivot point may have occurred. When a continuation pivot point occurred, Livermore added to or even initiated his position.
-
2 Attachment(s)
Weekly Trading Forecast: Trade Wars and Growth Replace Event
Australian Forecast: Australian Dollar Could Face First RBA Rate Cut Since August 2016
The Australian Dollar heads into a new week battered by more feeble data and with more to play for at an RBA meeting than usual.
Attachment 35399
GBP Forecast: Sterling (GBP) Price Outlook: Brexit Anger May Dampen Sterling Strength
UK politics look set to re-assert themselves and Sterling is very likely to suffer.
Attachment 35400
Gold Forecast: Prices May Fall as Dollar Gains on Fed Policy Bets, Risk Trends
Gold prices may fall as a downbeat view on global growth coupled with fading hope for imminent Fed stimulus sours sentiment, boosting the US Dollar.
Euro Forecast: EURUSD at Risk to Bearish Euro Sentiment and EU-US Trade War Fears
The Euro struggled appreciating despite Italy climbing out of a technical recession and improving Eurozone data. Fears of an EU-US trade war and sentiment signals may sink EUR/USD.
Equity Forecast: Dow Jones, S&P 500, DAX 30 and FTSE 100 Price Outlook
After a loaded week for US equities, event risk looks to subside as the S&P 500 and Dow Jones look for the path of least resistance.
more...
-
1 Attachment(s)
Brean Crude Oil: weekly bearish breakdown; 25.71 is the key
Crude oil prices remained close to eighteen-year lows on Monday as administrations all over the world extended lockdown procedures to try and stem the spread of the coronavirus outbreak which has already seen energy-demand forecasts cut to the bone.
Attachment 38841
The price of a barrel of crude has plummeted by 60% this year, the falls made worse by a price war between Saudi Arabia and Russia rooted in the two major exporters’ inability to agree about production cuts earlier this month. Current reductions from the Organization of Petroleum Exporting Countries and allies including Russia only run on until the end of March.
Even under current conditions investors and specialists seem to have trouble visualizing sub-$20 prices for any extended period. February 2016’s lows in the $27.57 area look like reasonable near-term resistance on the monthly chart, but the sort of sentiment revival needed to bring them back into view remains elusive.
more...
-
1 Attachment(s)
Euro Forecast
Attachment 43887
The European Central Bank will consider it a job well done if there is no movement in EUR/USD or the Euro crosses before, during or after Thursday’s policy announcements by its Governing Council.
more...