Day Trading Strategy For Pivot Points Traders (Forex Trading System For Beginners)

What’s up Traders, in this article, we’re going to be talking about Day Trading Strategy for Pivot Points Traders (Forex Trading System for Beginners). Traitors face all kind of problems, when they trade some traders struggle, with establishing the main trend other have problems, with their market entries. 

But, what if you developed a trading strategy, that would solve both problems. 

Hey traders if you stick with me a couple of minutes, I will share with you a great day trading strategy, that will keep you on the right side of the market the corrupt strategy.

Relies on a leading indicator pivot points and accumulation. and distribution line, an underrated volume based indicator not used by many traders, let’s dive right into the strategy and see how it works here’s. 

 

Buy/Sell at the Central Pivot Point

 

• High Probability that the PP will be reached
• Based on Price
• We already know the price to enter the market at the beginning of the day

The first rule of this strategy, we aim to buy at the central pivot point in, an uptrend and sell at the central pivot point in a downtrend. 

The central pivot point is the most important part of the whole setup, the location of the main pivot point on the Chart represents.

High Probability that the PP will be reached

An important information to be aware of because there is a high probability that it will be reached, have you ever wondered why pivot points are. 

So popular among traders, well that’s because the what points are an accurate indicator, and most market participants are watching. 

 

Based on Price

 

• Bullish
• Bearish

And trading these key levels part of what makes the pivot point, so reliable is the fact, that they are based purely on the price in our strategy. 

We’ll consider the central Pivot point, as the intraday point of balance between the buyers. 

And the sellers in this area will assume, that the largest amount of trading volume takes place. 

 

Bullish

Now this is how I read the central pivot point in our setup, if the price is above the central pivot point, I consider the outlook as being bullish. 

Bearish

And considered taking only long positions, if the price is below the central pivot point, I consider the outlook as being bearish and I only look.

To short the market, if the price decreases below the pivot, the first target will be S1, and if the price continues to decrease the next target. 

Will be S2 if the price rises above the but the first target is R1 and if the price continues. 

 

We already know the price to enter the market at the beginning of the day

To increase the next target is R2 this strategy is very simple, what is one of the most powerful ways. 

That you can use the pivot points by using the central pivot point, at the beginning of the day, we already know at.

What price we will enter the market, we just need to type the market, and enter in the direction of the main trend. 

But how do we establish the main trend with the accumulation, and distribution line here comes. 

 

Determine the trend with A/D line + 200 EMA

 

• A longer-term Moving Average (MA) is more reliable
• Back test the optimal Timeframe
• The right side of the Market
• Be disciplined
• Don’t Trade Stocks with this Strategy

The second rule of this strategy we establish the main trend, with the crossover of the A/D line, and the 200 exponential moving average. 

We added a moving average on the indicator, in order to eliminate the noise offered by the eddy line.

A longer-term Moving Average (MA) is more reliable

You can test other Moving averages, but from my experience longer term moving average added on the A/D line, will work better than a short term moving average. 

Now here’s how we take the signals, we aim to buy at the center of pivot point if the crossover of the A/D line. 

And the 200 EMA indicates an uptrend, this means that the 200 EMA is below the A/D line, and we also aim to sell at the center pivot point. 

If the crossover of the A/D line, and the 200 EMA indicates a downtrend this means that.

The 200 EMA is above the A/D line very important, we only take signals around, the pivot point that’s the main rule of our system. 

Here’s the EURO/USD on the 15-minute chart in this chart, we have four trading days during which, we had a downtrend a small range. 

And an uptrend during the first day, we had a buy signal generated in the first part of the day as the price rejected the central pivot point, and the crossover between the A/D line. 

And the 200 EMA indicated an uptrend during the New York session, we had a sell signal as the price broke below the central pivot point. 

And a 200 EMA crossed above the 80 line, the second day the price didn’t retrace to the central pivot point. 

So we didn’t open my new position the third day offered a short signal during the London session, you can see the price closing below the central pivot point move confirmed by the A/D line. 

And the 200 EMA Crossover in the last part of the day this system generated a buy opportunity, as the price breached above the central pivot point. 

And A/D line crossed above the 200 EMA during the fourth day, we had two opportunities to enter long on the market, when the price retraced to the central pivot point. 

The first signal was generated, at the end of the Tokyo trading session.

And the next one during the London trading session, here’s another example the GBP/USD this time.

Back test the optimal Timeframe

We have five trading days during which at least three days are trading, in a range please keep in mind, that you have to adjust the time frame if in the previous chart. 

We used a 15-minute time frame on this pair, we used a 30-minute chart you have to back test, and see which time frame offers the higher probability setups. 

Now as you can see despite the fact that during first two days the price action was extremely choppy, this setup offered a few short Signals below the central pivot point. 

This was due to the fact that the A/D line was below the 200 EMA suggesting a downtrend the third day. 

We had two good signals as the price retraced to the central pivot point observe how the ad line is moving lower. 

And lower confirming the downtrend, the fourth day started with a short signal below, the central pivot point offering on excellent trade. 

The end of the New York session, brought a buy signal above the Central pivot point confirmed, also by the A/D line in the 200 EMA the fifth day was a no-trade day, as the price reached new highs. 

And failed to retrace to the by area meaning around, the central pivot point by, now I hope you are convinced by the power of this setup. 

 

The right side of the Market

You will be on the right side of the market, most of the times of course you will take some losses. 

But if you stick to the rules at the end of the week, you will be in profit remember, to take the trades only around a central pivot point stick to this important role. 

 

Be disciplined

As it will benefit you in the longer term, you will be tempted to take your trades, in other areas of the chart. 

But my advice is to be disciplined and enter the market at the central pivot point take a part of your profits at s1 or r1 levels. 

And leave the trade run to its full potential by moving your stop-loss, to break-even backtest other currency pairs commodity, or even cryptocurrencies.

 

Don’t Trade Stocks with this Strategy

And see which time frame is suited for them, and very important don’t trade stocks with this system, because the A/D line does not include gaps in its calculation.

And the signals will not be 100% reliable test the strategy for a couple of weeks, and come back here and share your results. 

If you have any other filters or tools to improve this setup, I look forward to hear from you in the comment section, if you got any value from this article please consider.

 

Final words

Okay, so that’s it I’ve come to the end of this presentation, I hope you’ve enjoyed it and if you really do please write a comment and click the share buttons smash it right, and click to subscribe bell to Allow notifications be updated.

Whenever, I publish content like, this and finally any questions or feedback let me know below and I’ll do my best to help, so with this guide, I hope you got value out of this presentation, I wish you good luck and good trading and I’ll talk to you soon you.

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