So it is a trend day and you were not awake when the trend started. Where do you jump in???
CCI to the rescue!
I have developed a simple system that utilizes CCI divergence, TMA bands and 13 pip range bars to trade pullbacks, allowing you to enter trades in the direction of the trend.
On the chart 1) is a bullish CCI divergence.
2) Confirmation of the trend/trade direction
3) Entry signal – piercing of TMA bands.
It is important to wait fot the the TMA bands to be pierced. If they are not pierced, then no trade.
To keep this a low risk trade – use a 6 pip stop and target at least 12 pips.
Just a couple of examples. In the first one during the London session price actually dropped about 80 pips from the pivot. I am a scalper so I only collected 5.
10.13 london session 4hr pivot
In the second image, you had to be quick as only 8 pips were offered. I have a take profit of 5 for this trade so it worked out well for me.
Really there is nothing earth shattering here. I was talking to a trading buddy of mine and recalled my most profitable trades were done using 4 hour pivot points and… oh yeah thats it!
The strategy is so simple that many will just brush it aside, but give it a try and you will see how profitable it can be with minimal risk. All you do is pull up a naked chart – any time frame you like (or this example I used 1 minute) and plot the 4 hr pivot points. You can do this
4 hour pivot point strategy
in a spreadsheet, by hand or using an indicator (send me a message if you need help here). Once plotted, enter your trades. We will be fading the market so for short entries enter a limit sell 1 pip below the upper pivot and for long entries enter 1 pip above the lower pivot. For example in the chart to the right R1 is 1.3833 so your order should be to sell at 1.3832. Set a stop that you can live with and take your profit after a 5 – 12 pip bounce.
There are instances when you can hold this for a swing trade, but that requires a little more homework and risk so i’ll table that for another day.
In my opinion pivot points are not magic lines but rather levels that so many traders use that they become self fulfilling levels of action. At the end of the day I could care less, I just want to see green on the last line of my brokerage statement and I hope you fell the same.
The key to this technique is to get comfortable with it and add size as you see how predictable the market is around pivot levels.
Today’s price action is closing in on an inside day. No new breakouts as .price was contained within yesterdays trading range. This usually means that the market is consolidating, but I also like to think of it as an opportunity for a longer term swing trade.
An inside day is a signal to get ready for an explosive move. The direction of the move is unknown, but that really doesn’t matter. What matters is that we prepare to take action once the market tips it’s hat.
Since we have not seen 3700 since September 21 – there is a low risk entry short if price tests that level again. If price can get a 30 minute close above 3700 – then I would look for the first pullback as an opportunity to get long with no resistance until 3800, and even that is minor.
As stated earlier the downside offers a simpler low risk entry at the round number (3700) – with the first real support being almost 150 pips away. If you miss the 00 entry look for pullbacks at the quarter levels – preferably 75 or 50.
Remember to have a roadmap, but to be open to detours.
A little late this morning, and currently the Euro is surging, although I wouldn’t get to excited as there is a serious zone of resistance from 1.3660 - 1.3680 capped with a virgin POC at 1.3680.
Trading range: 1.3470 – 1.3680 (don’t be too shocked if we hit 3700)
Well – thanks to the Fed, we are finally out of the trading range we have been stuck in for the past few weeks. And while there are several resistance levels above – there is a lot of thin air below. No range that I can identify so I will be employing a scalp and run – SHORT ONLY – technique today.
Yesterdays low was within 2-3 pips of our trading range low, making for a pretty low risk long entry.
Price action is still a little choppy, but trading above the daily pivot so I have a slight bas for the long side today, at least till we hit the virgin sitting at 1.3792.
A large gap opening makes for an interesting Monday!
The gap opened below daily support level 1 and has since traded below daily support level 2. Also of interest, the gap took aout a virgin POC at 1.3702. This gap effectively took out all of the support levels mentioned in Friday’s post. Daily support level 3 and last weeks lowest POC exist around 1.3590 so expect firm support, but below that is nothing but thin air.
There is a virgin POC above current PA at 1.3792 – be aware of it just in case we get a strong reversal, but I seriously doubt we will get there today.
Note: President Obama is speaking at 9 a.m. CST – be alert!
At 7:30 am CST the EURUSD pair is currently trading below the pivot at 1.3772 so my bias is for the short side. However, I expect a bumby ride as we are headed through several support zones. The daily pivot support is at 1.3740 with 4 hr support just above that at 1.3752. Additionally we have a virgin POC (yesterday) at 1.3723 and yesterdays value area low at 1.3707. If price does happen to get thru all of these levels then we still have another virgin waiting at 1.3680. Be quick to take profits today!
Just to be prepared, on the upside there is daily resistance at 1.3973 followed by a week old virgin at 1.4063.
