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I have been experimenting with an idea of a trading system based on pivots for a few months now. It certainly looks very promising however my biggest frustration is my total inability to code what I want. I hope that what I post here might generate enough interest from one or more of the members who has programming skills to help me/us develop an indicator and subsequently (if it proves to be worthwhile) an EA which we can all benefit from.
I have used some of the existing pivot indicators which I found on the Yahoo Metatrader site and have commented out some of the lines so that I can only see the pivot lines. Have a look at the attached image. I have also attached the “customised’ indicators for you to have a look at. While playing around with this I saw that on many occasions when the daily pivot moves over the weekly pivot it is the beginning of a large move. See the images attached – it is a 1hr chart and only shows daily and weekly pivots I don’t have the other pivots. The yellow line is the RSTL which looks like a good trend indicator.
You will see that the entry of this system (daily pivot crossing weekly pivot) could sometimes be very choppy. This led me to the idea that if one can add to this the pivots for the shorter time frames i.e. 4 hrs and 1 hr and use them to determine the entry point coupled with a good trend indicator i.e. the RSTL or something to that effect we might have the makings of a very good and solid system.
My idea is as follows:
1. Any time frame from 1 m to 4 hrs will work (attached images show 1 hr chart)
2. Put a trend indicator on the chart i.e. RSTL or SMA (the attached images shows the RSTL)
3. Put a weekly, daily, 4hr and 1 hr pivot on the chart (pivot line only)
4. Look at the cross over of the pivots and the trend line for entry and exits.
5. Take entries only in the direction of the trend.
I don’t put the R1, R2, R3 or S 1, S2, or S3 lines on the chart – I believe they don’t help much for what I have in mind. However I might be wrong.
My questions:
1. Do you have any comments on how this system could be improved?
2. Is there anybody that is prepared to code an indicator (s) that will do this?
3. Can this possibly be converted to an EA and back tested?
Look at the attached image of the GBP 1 hr. The same chart as before but I have added some arrows to show where you could have entered and exited.
I will try to describe a short setup:
1 - The purple line is the weekly pivot. The white line is the daily pivot.
2 - The yellow line is the RSTL which I use for a second trend indicator.
3 - The first trend indication is when the daily pivot (white line) goes below the weekly pivot (purple line) - that means the trend has changed to short.
4 - The second confirmation is when the prices (in other words the candles) are below the yellow (RSTL) line.
5 - As long as the daily pivots (white line) are below the weekly pivot (purple line) you will take only short trades. See the arrows on the chart
6- Every time when the market breaks the daily pivot and the yellow trend line in the opposite direction you exit - look at the crosses on the chart
8- Re-enter for short when the market goes below the daily pivot and yellow trend line.
I hope this makes it more clear. Please let me know if you have any questions.
I think that if you could add the 4hr and 1 hr pivots to this system you might be able to get much better entries and exits.
I would also like to see what the other members say of this idea. Perhaps other indicators could be used with this i.e. MACD, RSI, etc?
Hi Alex and Forexts,
Thanks for that. I will try to learn but I am enormously studip when it comes to programming and know my limitations!
I do believe this does have good potential - if we can just get a 4hr pivot programmed at first. After that we can look at how to use the 3 pivots with some other indicators to get good entries and exits.
It would really be great if someone can program the 4 hour pivot so that it works like the daily and weekly one. That will give us the capability to start "visual backtesting" and experiment with extra indicators untill we can get the best combination.
Cheers
Kal: First of all you might have something here, but on your screen shot, you have the daily & weekly livots on a 1hr chart, thats not right I think, correct me if I am wrong. The way it looks to me is that you should have the weekly & daily pivots on the daily chart.
The other thing, is that at your first green down arrow, it crosses on the vertical part of pivot line, that vertical line is only there to connect the previous periods pivot to the next periods pivot line. So if its to be a proper crossing of 2 different pivot time frames, it should happen on the horizontal level.
I dont really like your yellow line, its too noisy, but there are a number of indicators like maybe Keltner channel, CCI, Macd, EMA's, LSMA, TM, etc. The indicators would be the easy part to set up.
This might be alot better running it on the 4hr/1hr chart combo.
(i have now much fx projects) sorry
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