Pivot Point To Forex Trading Success With A Simple 3 Day Roll Strategy
December 18th, 2007 by LoadRunner
Successful forex trading involves the proper use of pivot points. Finding a trend early and riding it when forex trading is the key to success. We have all heard that the trend is your friend but good friends are hard to come by in forex trading. Anyone who has read several of my articles is aware that I love Pivot points. The problem most face when trying to use pivot point and ride a trend to profits in forex trading is knowing when to go long or short a currency pair. When to follow a strong trend and when that ship has sailed.
I am going to discuss a simple way you can setup some 3 day rolling pivots using our forexflows software to put yourself on the right side of the table and catch a ride to some forex profits. This is a simple little trick many professionals involved with forex trading use often.
Firstly you want to setup 3 consecutive days of central pivot points with the standard pivot calculator inside the software. Once they are setup you will see a string of the 3 central pivot points listed. then you look at these 3 numbers as a range with the highest number being the top of the range and the lowest being the bottom. Now when we are trading above the high of this 3 day range it is believed to be better to enter on short trades or sell that currency pair. When we are trading below the lowest number of the range it is believed to be better to enter long trades or buy that currency pair. Lets look at some numbers and do a quick example.
lets look at the USDCAD on July 18 2007
OK we setup our central Pivots and we end up with the following numbers.
July 13 1.0478
July 16 1.0445
July 17 1.0436
So our 3 day roll gives us a range of 1.0436 - 1.0478
We also notice that we are trending down with lower central Pivots on each of these consecutive days. Another thing we notice by looking at this 3 day roll is that our momentum of the Trend to the downside is slowing down. This is evident by the tight numbers on the Central Pivot of July 16 ( 1.0445 ) and July 17 (1.0436). Now armed with this simple information and just by looking at a simple 3 day Pivot roll in forexflows we can plan a trade. We can look to go long on the next day if we get below the bottom of this 3 day range.
Let’s see what happens by looking at some 10 minute ticks for USDCAD on July 18 2007
06h30GMT 1.0422 (+0.0002)
06h40GMT 1.0421 (-0.0001)
06h50GMT 1.0422 (+0.0001)
_______________
07h00GMT 1.0421 (-0.0001)
07h10GMT 1.0411 (-0.001) < ---- Buy Signal to go long
07h20GMT 1.0407 (-0.0004)
07h30GMT 1.0414 (+0.0007)
07h40GMT 1.0420 (+0.0006)
07h50GMT 1.0421 (+0.0001)
_______________
08h00GMT 1.0428 (+0.0007)
08h10GMT 1.0430 (+0.0002)
08h20GMT 1.0429 (-0.0001)
08h30GMT 1.0431 (+0.0002)
08h40GMT 1.0436 (+0.0005)
08h50GMT 1.0437 (+0.0001)
_______________
09h00GMT 1.0433 (-0.0004)
09h10GMT 1.0436 (+0.0003)
09h20GMT 1.0437 (+0.0001)
09h30GMT 1.0443 (+0.0006)
09h40GMT 1.0438 (-0.0005)
09h50GMT 1.0432 (-0.0006)
_______________
10h00GMT 1.0433 (+0.0001)
10h10GMT 1.0435 (+0.0002)
10h20GMT 1.0428 (-0.0007)
10h30GMT 1.0430 (+0.0002)
10h40GMT 1.0432 (+0.0002)
10h50GMT 1.0432 (+0)
_______________
11h00GMT 1.0430 (-0.0002)
11h10GMT 1.0467 (+0.0037)
11h20GMT 1.0471 (+0.0004)
11h30GMT 1.0466 (-0.0005)
11h40GMT 1.0473 (+0.0007)
11h50GMT 1.0476 (+0.0003) < -- Market trended up nicely
_______________
12h00GMT 1.0476 (+0)
12h10GMT 1.0465 (-0.0011)
12h20GMT 1.0473 (+0.0008)
So there you have it a simple 3 day pivot roll can tell you a lot about a markets trend if you know what to look for. You can also take some basic knowledge about market timing and use this together to put a nice signal for going long or buying when forex trading any particular currency pair. Look in our resource box or download a copy of forex flows to watch a video on this trading style with more in depth commentary from me about how and when to use this strategy.
For more information visit at http://www.digital-intuition.com and Download your free copy of forex flows the best forex trading software available using computerized A.I.
Watch some of our videos here:
http://www.youtube.com/view_play_list?p=FE856782219FEDFC
Tags: daytrading, forex trading, investing, Pivot point
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