Pivot Trading Pro trading system or how professionals trade
Hello friends traders!
By the numerous requests of readers of the portal, today we will analyze the Pivot Trading Pro trading system designed for swing trading. Pivot Trading Pro is a system, not a trading strategy. Strategies are distinguished by clear entry-exit rules and tight limits, while a trading system (for example, Pivot, VSA, Elliott waves) leaves the trader room for maneuver and the ability to make decisions independently based on their own experience. Strategies are more suitable for market beginners who do not have enough experience for full-fledged independent trading.
For professionals, the trading system is more suitable. An experienced trader can not only successfully improvise where the system gives freedom, but also improve the TS over time, making it even more effective. The Pivot Trading Pro trading system, which we will analyze in this article, has recently been very popular with traders. Is this vehicle really so effective, and how exactly should it be used to maximize profits?
Platform: MetaTrader 4
Currency pairs: USDCAD, AUDCAD, EURCAD, NZDCAD, EURAUD, EURGBP, AUDUSD, GBPUSD, NZDUSD, AUDNZD, EURUSD, CADJPY, NZDJPY, AUDJPY
Timeframe: M15 - D1
Trading time: around the clock
Recommended brokers: Alpari, Exness, RoboForex
Before proceeding directly to the consideration of the system, I would like to thank the author with a nickname Davit for sharing his idea with the forex community. The original discussion thread is located on the ForexFactory forum here.
The main idea of the trading system
The trading system under consideration belongs to the category of advanced TS intended for professionals. The author of the system does not recommend trading with Pivot Trading Pro for beginners who do not know the basics of Price Action and do not have at least two years of experience in real trading on Forex. Also Davit recommends that you first study the basics of the psychology of trading (in particular, read M. Douglas’s book “Trading in the Zone”), as well as analyze harmonic patterns.
The idea of a trading system is to search for price rebound points from Pivot levels (trend reversal points or corrections). This rebound should be confirmed by the Price Action pattern or by the behavior of the price as a whole, as well as by the angle of the TDI indicator. If all conditions are met, you can enter the market towards a reversal.
In the indicator of the Pivot-levels (zones) of the author of the strategy, the values of these levels are updated once a week.
One of the most important is the Pivot level itself - the further the price goes from it, the more likely the correction. If the price has reached the level of 100 and there are fundamental factors confirming this movement, then there is a strong trend in the market, which is likely to continue. Otherwise, the price is likely to unfold around the level of R100 (S100).
Within the framework of this system, it is possible to open deals both against the trend and according to the trend, however, trading on corrections is the main idea of the TS. Pivot Trading Pro is great for trading in the sawtooth market.
Composition of trading system tools
The TS is based on two tools - a set of Pivot levels and a TDI indicator.
There are only 15 Pivot levels - the main Pivot and 7 up and down from it. The importance of Pivot and levels of 100 has already been noted, but levels 61 and 78 are also important - this is the last chance for the price to turn around to level 100 and rebound towards the weekly pivot, which means that a trend change in the area of these zones is a powerful signal.
The TDI indicator is an advanced oscillator known by the Trading Made Simple system. In the trading system, TDI will be used to confirm price behavior.
Entry and exit rules for the vehicle
To enter the market for a rebound (and this is the main direction of opening transactions on Pivot Trading Pro), the following conditions must be met:
- The price approached the Pivot level and slowed down near it;
- On faster timeframes (M15 and M30), the Price Action reversal pattern formed. This does not have to be an ideally beautiful figure or candle (for example, a pin bar), but the price movement as a whole should indicate the presence of preconditions for a reversal. To determine these price signals, you will need trading experience;
- The TDI should turn towards the expected reversal. Even better, if the fast line of the oscillator crosses the slow line in the same direction.
The main timeframes for trading are M15 and M30. However, in order to better present the overall picture, it is worth looking at higher TFs like H4 or D1.
The author of the system suggests entering the market not immediately with the whole lot, but in parts; Leave the position as the situation develops.
There are several options for taking profit on the system. In general, the author believes that any profit of more than 50 points is sufficient. A signal to close a position with a profit may be approaching any of the Pivot levels, and the closer the level is to a weekly pivot, the stronger it is. You can also wait for a signal to open a transaction in the opposite direction.
When exiting a transaction, fundamental factors must be taken into account. Possible exit at local extremes. A signal to exit the transaction may be given by the TDI indicator, having entered the opposite overbought or oversold zone.
The author of the strategy sets Stop Loss at a great distance from the order, solely in order to protect against force majeure. Also, given the specifics of trading in micro lots, a trader can afford to survive a pullback of 200-300 points, although this is not optimal.
You can also use the ATR indicator to set stop losses, multiplying its value by 2 or 3, and setting a protective order at the received distance.
Additional conditions and nuances
Before you open a deal by the main signals, you should pay attention to additional nuances:
- Pivot levels are not lines, but zones with a spread of 10-20 points on both sides;
- Before opening a deal, you should check with the economic calendar - the release of important news can move the price in the opposite direction, and quite sharply;
- Considering that it is necessary to analyze several timeframes at the same time, it is not recommended to trade on several pairs at once. 1-2 assets - the optimal amount, especially at the beginning of work on the vehicle;
- The author of the system opens 80% of transactions on a pair of USDCAD - we can assume that it is best amenable to analysis on this TS;
- False breakdowns often form around the main Pivot level - this is due to its importance, the price rarely passes it quickly and often rolls back.
The author recommends opening a deal with a volume of 2-3% of the deposit (for all orders in total). In this case, the position may consist of several orders opened by micro lots (this is how he trades Davit) You can trade with one transaction, but the specifics of the system is such that opening several positions, as you progress through the grid of orders and increase confidence in the trend, is optimal.
Pivot Trading Pro Trading Examples
In order to better understand trading using the Pivot Trading Pro system, consider a few examples of transactions opened on this TS.
The first deal was opened on May 10 on the EURGBP pair. The price rebounded from the S61 level, the last candle took the form of a pin bar. In addition, a “double bottom” graphic analysis figure was formed on the chart. TDI lines turned up, fast moving crossed slow. Together, these signals gave good conditions for entering the purchase.
In order to make sure the signal strength, we switch to faster time frames. A pin bar was also formed on the M15, a U-turn was clearly read in the context.
At 15:00, a buy transaction was opened, which closed at take profit set in the Pivot line, an hour later, after a powerful upward movement. The price managed to reach the level of R38, after which it was adjusted and returned to the main pivot level.
On the hourly chart, at first glance, no Price Action pattern is visible, however, according to the long upper shadows of the candles, it can be understood that the price is lowered over and over again, preventing the bull trend from continuing. Long tails begin to form after the price has broken one of the levels from the bottom up, and then its movement slowed down. In addition, the TDI indicator, having entered the overbought zone, turned down.
The author entered a position on these signals with two orders, and held them until the TDI reached the oversold zone, and the price broke through level 78. The deal brought about 150 points of profit.
Another example from the author is the EURUSD deal on May 3, 2016.
In this case, on the M30, again, no specific candlestick pattern was formed, however, the trader noticed that the breakdown of the R78 level is false. In addition, the price has already moved quite far from the original Pivot level, and this increases the chances of a reversal. TDI just reached the overbought zone and began to turn down.
Pivot Trading Pro is not a strategy, but a trading system. It does not have strict limits and clear rules, giving the trader the freedom to express himself and experiment. Try it, add your nuances to the system - perhaps this particular technique will be key to your trading.
P.S. I strongly recommend watching the video version of the review of the strategy for its better understanding, as the text presents only the direct squeeze, the key points of the system.
Download Strategy Files Pivot trading pro