The Pivot Point Squeeze Forex System

The following trading system is a system based on constricted volatility followed by a breakout which co-insides with pivot points.

Indicators used:

Bollinger bands with MA of 18 and deviations of 2 through to 4.2
incrementing by 0.2
Bands 2 – 2.4 Purple
Bands 2.6 – 3 Pink
Bands 3.2 – 3.6 Red
Bands 3.8 – 4.2 Green

MACD with settings:
Short term MA: 5
Long term MA: 13
Signal number periods: 1

Bollinger Bandwidth with settings:
MA periods: 18
Standard deviation: 2

Indicator Settings

Trigger level
Horizontal line at a value which is determined by currency pair
EUR/JPY ~ 0.0056

Pivot Deviation
Distance from a pivot point in which the signal is still valid
14

MACD Threshold
Threshold of the deviation of the MACD that signals an exit
6.2

Making sense of it all

The Bollinger bands are used to visually see the volatility of the underlying security. When they narrow, it shows that the market is not sure which way to push price. I.E no-one is buying or selling with urgency. When there is a lot of traders in the market to sell, you will see the market drop and the Bollinger bands increase in bandwidth. It is the same with an up-trending market as well.

It is the breakout of this constrictive time of the market that I use to enter the market. If this breakout is close to a pivot point, it makes the trade setup even more positive.

Entering a trade

The first thing to look for is the narrowing of the Bollinger bands. When the Bollinger bandwidth crosses under the trigger line, you want to keep an eye out for a low on the histogram followed by an increase in bandwidth. This is a signal that it maybe breaking out and that is the entry point. Enter the market long if the MACD is trending up or short if it is trending down. Put more simply, trade in the way that the market is breaking away.

When I enter a position, I enter a wide stop loss as the EUR/JPY can be volatile and go in the other direction before it trends in the predicted direction.

Exiting a trade

When the MACD histogram is starting to turn in the opposite direction of the trade with a certain threshold of this turn, it can signify an end to the rally. The threshold must be set at a level which is not too sensitive as to make you exit a longer profitable trade but not too lenient as to give much of your profits back. Experimenting with this level is the only way to know which is best for different pairs.

Another way to plan your exits is to stage out at differing pivot levels. Say you enter a trade when it breaks down from the Pivot point. You would exit say half your lots at the 1st support line and then move your stop loss up to entry. Then your remaining lots at the 2nd support.

Some Examples


The top red bars show a short. The bottom indicator pink bars show short entries which do not take into account pivot points. The last trade on the right in which I am still in is turning out quite profitable, I just don’t enter with as many lots as if it did line up with the pivot points. You can see with the restriction of the bands on the right that something big was going to happen, the system tells you when it is time. I set up alarms on the indicator to alert me when to enter a trade. With different pairs I have different voices, so On EUR/JPY I hear “enter long EUROYEN” when the signal is given and “exit EUROYEN”. Pretty cool but enables me not to be glued to the screens, which can be hard to get away from.



Another short term trade short which resulted in a profit of 146 pips



As you can see, the bottom indicator signals multiple entries while the added pivot point signal does not. It still resulted in profitable trades.


Some more great trades

Pablosky Forex System

This forex system was posted by Pablosky at forexfactory.com forum. He said he has created and tested many systems and finally there is one it seems to generate regular profits for him. He only tested it on GBP/JPY and fund that H4 is the best timeframe to spot firm. He said that We have known that trends in GBP/JPY are strong and prolonged, but it's not easy to recognize its beginnings and the right time to exit. He was sure this system should work with other pairs with the right adjustments if needed, as each pair has its own personality.

Target points and Stop Losses for this system are “dynamic”, as he called them, because they change according to the indicators used. You will understand what he means once you read the logics. At first it may look a bit complex, but soon you will realize it's easy to follow and understand. Of course, charts with examples will finally give you the full picture.

This forex system uses visible indicators: ATR Channels and StepChoppyBars v1.1, which needs to work properly StepMA v7 and StepRSI v5.2 indicators.
StepChoppyBars is a great indicator created by Igorad from Forex-TSD.com forum. Legend for StepChoppyBars indicator is the following:

Blue :
Strong UpTrend.
DodgerBlue :
Retrace UpTrend
LightBlue :
Choppy UpTrend
Aqua : B
e ready to change UpTrend
Red :
Strong DownTrend
Tomato :
Retrace DownTrend
Orange :
Choppy DownTrend
Yellow :
Be ready to change DownTrend

Download Pablosky forex system MT4 indikators Here

Buy & Close-Buy Logics
Buy three equal positions when a candle closes between Lime ATR Centre Line and Aqua ATR Line, Step Choppy Bars candle is blue and previous Step Choppy Bar candle is Blue or Yellow. SL for the three opened positions is a candle closing below Yellow ATR line.

Target point for the first position is a candle closing above Aqua ATR line. Once this TP is reached, the Stop loss of the two remaining open positions will be moved to breakeven. TP for the second position is a candle closing above DodgerBlue ATR line. Once this TP is reached, the SL of the remaining open position will be a candle close below Aqua ATR line. If trend continues and price “touches” Blue ATR line, SL of this last position will be now a candle closing below DodgerBlue ATR line. This last position will remain opened till SL is triggered or a candle is painted Aqua.

Note: In the case a candle is painted Red, Tomato, Orange or Yellow during any time of the process, all positions should be closed.

Sell & Close-Sell Logics
Sell three equal positions when a candle closes between ATR Lime centre line and ATR Yellow line, Step Choppy Bars candle is red and previous Step Choppy Bar candle is Red or Aqua. Initial SL for the three opened positions is a candle closing above Aqua ATR line.
TP for the first position is a candle closing below Yellow ATR line. Once this TP is reached, the SL of the two remaining open positions will be moved to breakeven. TP for the second position is when a candle closing below Orange ATR line. Once this TP is reached, the SL of the remaining open position will be a candle closing above Yellow ATR line. If trend continues and price “touches” Red ATR line, SL of the last opened position will be now a candle closing above Orange ATR line. This last position will remain opened till SL is triggered or a candle is painted Yellow.

Note: In the case a candle is painted Blue, DodgerBlue, LightBlue or Aqua during any time of the process, all positions should be closed.

Note: If we see a sell opportunity but the candle is closing between Yellow and Orange lines (instead between Lime and Yellow lines), very close to yellow line, you may:
- Open three positions, apply the TPs and SLs for the 2nd and 3rd positions as usual and use the same TPs and SLs than the 2nd position for the 1st position.
- Open two positions, ignoring the 1st one and applying TPs and SLs for the 2nd and 3rd positions as usual. The same logic applies to a buy opportunity, but doesn't happen frequently.

When taking a position, always wait for the candle to close. A possible variation would be opening only one position and moving the SLs accordingly.

Pablosky said that, what he like about this system is that it generally gives accurate signals and if not, will tell you to exit early avoiding big losses. Also, it's very likely that for not so prolonged trends at least the first TP will be reached, so you will generally exit happy with profits. The system requires attention but not so much, it's enough to take a look at the chart every 4 hours to see how the candle is closing.

Example:

Buy

Sell

Peaks and Valleys (Trading Naked)

Open up a line chart with average price on your ONE HOUR chart. Be sure to pick a color you like! Try and make the zoom pretty far out so you won’t be so distracted by the noise. What you want to look for are MAJOR peaks and valleys. What determines a “major” peak or valley is really up to the trader, but to me, it’s a noticeable change in direction.

Near where the orange arrows are pointing are examples of valleys, and blue arrows point to peaks. The arrows are a bit inaccurate, but it’s the best I can do so bear with me. One could probably set a minimum wave size in terms of pips to determine whether or not a peak or valley would be “major”.

How to Make Pips With Peaks and Valleys

Peaks
• Place BUY orders 3 to 5 pips above each major peak (S/L = 50 pips + spread, no T/P).

When in a PEAK trade (LONG)
• Move your S/L along with each new valley point that exists (most recent valley point).
• Also, continue to place BUY/SELL orders as you go with the new peaks and valleys.

Valleys
• Place SELL orders 3 to 5 pips below each major valley (S/L = 50 pips + spread, no T/P).

When in a VALLEY trade (SHORT)
• Move your S/L along with each new peak point that exists (most recent peak point).
• Also, continue to place BUY/SELL orders as you go with the new peaks and valleys.

What we are effectively creating are trades that have a set allotted risk (50 pips) but have unlimited potential to grow (assuming the trend is your friend).

An Example
Pretend you’ve just woken up one fine morning, and this is the chart you have in front of you. Using Peaks and Valleys, what would I do? By the way, this is a live trade.


Most recently, we have 2 peaks at about the same price range. I usually do the higher of the two when it comes to peaks, and lower when it comes to valleys. We also have those two recent valleys right next to each other. No need for two orders in the same price range, so just do one BUY order by the highest recent peak, and one SELL order by the lowest recent valley. So what happened after we set up the orders? Well, truthfully, I went to sleep, but also we had a successful trade:

As you may or may not see, the pending BUY order I had placed earlier has now been triggered. As I woke up this morning and checked my chart, I realized that I had missed a long opportunity denoted at the green arrow. I also moved my S/L to the next valley just after the green arrow pointing to the peak, AND put in a short order for when/if my S/L is hit. This to me is a sign that the current trend has stopped producing higher high’s and low’s, and MAY be headed south instead.


Kevin Harvell
kharvell @ Forex Factory

Pivot Point Squeeze Technique

The following forex trading system is a system based on constricted volatility followed by a breakout which co-insides with pivot points.

Forex indicators used:

Bollinger bands with MA of 18 and deviations of 2 through to 4.2
incrementing by 0.2
Bands 2 – 2.4 Purple
Bands 2.6 – 3 Pink
Bands 3.2 – 3.6 Red
Bands 3.8 – 4.2 Green

MACD with settings:
Short term MA: 5
Long term MA: 13
Signal number periods: 1

Bollinger Bandwidth with settings:
MA periods: 18
Standard deviation: 2


Indicator Settings

Trigger level
Horizontal line at a value which is determined by currency pair EUR/JPY ~ 0.0056

Pivot Deviation
Distance from a pivot point in which the signal is still valid - 14

MACD Threshold
Threshold of the deviation of the MACD that signals an exit - 6.2


Making sense of it all
The Bollinger bands are used to visually see the volatility of the underlying security. When they narrow, it shows that the market is not sure which way to push price. I.E no-one is buying or selling with urgency. When there is a lot of traders in the market to sell, you will see the market drop and the Bollinger bands increase in bandwidth. It is the same with an up-trending market as well.

It is the breakout of this constrictive time of the market that I use to enter the market. If this breakout is close to a pivot point, it makes the trade setup even more positive.


Entering a trade
The first thing to look for is the narrowing of the Bollinger bands. When the Bollinger bandwidth crosses under the trigger line, you want to keep an eye out for a low on the histogram followed by an increase in bandwidth. This is a signal that it maybe breaking out and that is the entry point. Enter the market long if the MACD is trending up or short if it is trending down. Put more simply, trade in the way that the market is breaking away.

When I enter a position, I enter a wide stop loss as the EUR/JPY can be volatile and go in the other direction before it trends in the predicted direction.


Exiting a trade
When the MACD histogram is starting to turn in the opposite direction of the trade with a certain threshold of this turn, it can signify an end to the rally. The threshold must be set at a level which is not too sensitive as to make you exit a longer profitable trade but not too lenient as to give much of your profits back. Experimenting with this level is the only way to know which is best for different pairs.

Another way to plan your exits is to stage out at differing pivot levels. Say you enter a trade when it breaks down from the Pivot point. You would exit say half your lots at the 1st support line and then move your stop loss up to entry. Then your remaining lots at the 2nd support.

Examples:

The top red bars show a short. The bottom indicator pink bars show short entries which do not take into account pivot points. The last trade on the right in which I am still in is turning out quite profitable, I just don’t enter with as many lots as if it did line up with the pivot points. You can see with the restriction of the bands on the right that something big was going to happen, the system tells you when it is time. I set up alarms on the indicator to alert me when to enter a trade. With different pairs I have different voices, so On EUR/JPY I hear “enter long EUROYEN” when the signal is given and “exit EUROYEN”. Pretty cool but enables me not to be glued to the screens, which can be hard to get away from…


Another short term trade short which resulted in a profit of 146 pips

-GCTrader1 from www.forexfactory-

Daily 95 Pips Forex Strategy

The basis of this system is very simple and has proven to be profitable, though I am adjusting the money management/profit targets.

Overview

This is a pure "set and forget" system where trades are placed at the same time everyday. The option is also there for those inclined to monitor their positions to adjust stop levels as profit targets are reached. Please note that there is currently an Expert Advisor being created that will automate the trading of this strategy, thus keeping to the set and forget objective. Please click on the paperclip at the top right hand side of the screen to find the current versions.

By setting multiple profit targets we are exercising money management, while aiming for 95 pips profit from a 50 pips move in price. We will simply be placing orders 5 pips above the previous days HIGH and 5 pips below the previous days LOW.(Actually, it's more like the previous 17 hrs at 5 pm EST.). Use a 30 pips stop loss for all orders. Orders are placed on Monday, Tuesday, Wednesday, Thursday and Friday.

Execution

1.) At 5pm EST open the 1hr chart (2hrs b4 start of the Asian session) of USDJPY. For those whose brokers spreads are still wide at 5pm EST on Sunday (which is 7am my time on a Monday here in Brisbane), in order to avoid the wide spreads you may need to wait until they reduce to normal before placing the orders for the day. I typically have to wait until around 8pm EST.

2.) Use the high and low of the previous 17hrs. For Mondays orders go back as far as 00:00 EST on Friday for high and low.

3.) Open a total of 6 PENDING orders (for each pair) including 3 BUY STOPS and 3 SELL STOPS that expire within 24hrs (I use 18hrs) as follows:

Buy/Long Orders:
1 - Entry = HIGH+5pips, Take Profit=15pips, S/L=30pips
2 - Entry = HIGH+5pips, Take Profit=30pips, S/L=30pips
3 - Entry = HIGH+5pips, Take Profit=50pips, S/L=30pips

Sell/Short Orders:
1 - Entry = LOW-5pips, Take Profit=15pips, S/L=30pips
2 - Entry = LOW-5pips, Take Profit=30pips, S/L=30pips
3 - Entry = LOW-5pips, Take Profit=50pips, S/L=30pips

That's it!

Once you have placed your orders you are free to go and do something else with your day as this strategy does not require you to be monitoring the trades. Though, as already mentioned, to maximise results you may choose to adjust stop levels when profit targets are reached.

There can be 4 possible outcomes after either the long or short trades are triggered:
1.) All 3 profit targets are reached for a total of +95pips.
2.) The first 2 profit targets are reached (+45pips) and the remaining lot is stopped out (-30pips) leaving a total of +15pips.
3.) The first profit target is reached (+15pips) and the two remaining lots are stopped out for a total of -45pips.
4.) All 3 lots are stopped out for a total of -90pips.
Additional to this is the variable outcomes of when both the long and short trades are triggered.
Also note that for those so inclined to monitor the trades, stop levels may be adjusted on remaining lot/s to protect already achieved profits. Trailing stops may also be used at your discretion.

Please note that as a general rule of thumb you should not risk any more than 3% of your trading account on any one trade. Therefore, with the DAILY95PIPS strategy the order size will need to be divided between the long and short orders. The total potential loss on the long orders (90pips) will therefore add up to 3% of your trading account. Alternatively, you could risk 3% of your trading capital on EACH order, totalling 9% of your trading capital being risked for the long trades. The same applies to the short orders.

By: mikelath
www.forexfactory.com

Fibonacci Forex Trading Signal

The fact that Fibonacci numbers have found their way to Forex trading is hard to deny. Moreover, trading currencies with Fibonacci tool for many traders have become the bread and butter of their whole trading career. So, shall we look at the one of such good Forex trading systems today?

Trading setup and tools we need:
Time frame: 3 hour (or 4 hour).
Currency pairs: any.
Indicators:
Fibonacci tool - our main tool
EMA 100 – green (visual guidance)
SMA 150 – red (visual guidance)
RSI (14) on a daily chart

We will be working with next Fibonacci retracement levels: 0.382, 0.618, 0.250 and 0.750.
Default stop loss – roughly 100 pips and then adjusted according to the most recent swing high/low.
Profit target – no target is set as we will let the profits run.
Trading Rules:
Find the closest to the current price wave with a distance from High to Low over 100 pips.
Apply Fibonacci on it no matter if the wave is going up or down, only size matters.
Some terms we are going to use here:
The corridor between 0.382 Fibonacci retracement level and 0.618 retracement on the chart – will be called a “must channel”.
Fibonacci retracement levels will be numbered always from bottom to top, no matter whether it is an up or a down wave. E.g. at the bottom we will always have 0.250, then next 0.382, 0.618 and finally on top – 0.750 Fibonacci retracement level.
Entry rules:
Always enter only according with both:
1. EMA and SMA trend suggestion (e.g. green on top – uptrend, red on top - downtrend)
2. RSI suggestion (e.g. reading below 50 – only sell orders, above – only buy orders).

Now, after applying Fibonacci on a wave bigger than 100 pips we wait for the price to go inside a “must channel” area (at least to make 1 pip into the channel). Only then next rules will be valid:
- If a full candle (including shadows) is closed below 0.250 Fibonacci retracement, we go short. If we are currently long – it is time to close long position – it is an exit rule as well.
- If a full candle (including shadows) is closed above 0.750 Fibonacci retracement, we go long. If till this time we had short positions open – we close them – and again it is an exit rule as well.

Important: once another wave greater than 100 pips occur, set a new Fibonacci on the new wave. Retracement levels will change and so we will now follow new retracements.
(Optional: for visual aid traders may mark old Fibonacci wave to see the general pattern of consecutive waves on the chart).

click image to enlarge

That’s it. Stay in trade, resetting Fibonacci with each new wave and moving a stop loss according to the last swings high or low (in simple words, a stop loss will be always just below the Fibonacci 0% line) until it is time to close the position according to our rules.

This strategy prevents a lot of “bad” entries, eliminates early exits and allows staying in trade for a long period of time helping to take everything a current move can offer.
Traders may close all good winning positions on Friday evening if they prefer not to hold them over a weekend.

By: Edward Revy
www.forex-strategies-revealed.com

IB Forex Trading - 40 to 100 Pips per Day

This forex system is very simple and requires only one indicator. The system works in anytime frame and with any pair. The Indicator you need is Slow Stochastic setting 8.3.3 some platforms will only allow 8.3 that’s ok.

Next the key part of the system in all trades is the INSIDE BAR or IB. An IB is simply when the current bar is less than or equal to the bar to the left of it. The inside bar can also be the same size as the previous bar.

klik to enlarge the picture

THE INSIDE BAR is a standard technical analysis pattern; however most people over look it. You can also use an outside bar or OB.

HOW TO TRADE THE IB
First look for an IB to form then check if it’s a valid IB with the stochastic indicator set up.

STOCASTIC INDICATOR SET UP
When stochastic are below or around the 20 and oversold and starting to hook round look for an IB to go long, When stochastic are up to 80 and above and starting to hook round in overbought look for an IB to go short you will find them the best in trending markets also range bound markets but if the price action is choppy stay out.

The Stochastic don't have to be exactly 80-20 but it is stronger signal if they are. Sometimes as an example they may at 35 as long as they start to turn and hook up and an IB forms it’s a possible valid trade.

ENTRY
To enter a trade wait for the next bar after the IB to go up 1-2 pips higher than the IB for a buy signal or 1-2 pips lower for a sell signal. Also the shadow of the IB must be inside the prior bar as well in the overall size otherwise it’s not a valid signal.

If after the IB formed you get another bar the same size as the IB and it doesn’t go 1-2 pips either way then you may look at up to 3 more bars after the IB bar to confirm a signal and enter a trade. If you don’t get a signal stand a side and wait for a new IB to form.


STOPS & EXITS
For stops and exits you can trail a stop at the bottom of the prior bar to the IB by 1-2 pips if you’re more Aggressive 2 bars below the prior bar to the IB.

Exit when stochastic cross in the opposite direction but becarefull when going long as when stochastic hits 80 it can hang around a while first before carrying on up or just staying flat in a strong up trend so wait for a hook down and heading under the 80 level or a reversal candle to exit. Also to exit look for the big numbers if you were trading GBP/USD. Try not to enter trades around the big numbers wait for price to go through and retrace to the support or resistance then look for an IB to form and take the trade.

I look at a 1 hour chart first and see what the over all trend for the day is going to be then trade off a 15 min chart for the day.

One of the benefits of this System is it can get you into trades early before the crowd. Once you have demo the system how would you like to trade live


James
Master Contributor and Member of BabyPips.com Forum