Daily Pivot Point Trades | MT4 EA Download
Hello! Thanks for stopping by and checking out this thread. Here I would like to share with you a simple method that I have been researching and backtesting. I had issues with overtrading and not setting realistic profit goals, and as a result my trading was terrible. To combat overtrading, I started committing to one trade a day, and if it failed, that was that. Obviously, this reduced my losses, but it didn't help me take profits.
This is where Daily Pivot Points (DPP) come into play. With DPP I can determine the daily deviation (long or short) and a reasonable stop loss/take profit. Even better, it can be easily backtested using just the daily high, low, and closing prices. This is exactly what I did Oanda GBP/USD MT4 historical data going back to 2005.
My test rules are as follows:
Using the highest price, lowest price, and closing price, calculate R3, R2, R1, pivot, S1, S2, S3
R3 = High + 2* (Pivot - Low)
R2 = Pivot + (High - Low)
R1 = (2*Pivot) - Low Pivot = (Highest Price + Lowest Price + Closing Price)/3
S1 = (2*pivot) - high
S2 = Pivot - (High - Low)
S3 = Low - 2* (High - Pivot)
If the closing price (aka the opening price) is lower than the pivot point, it is a short bias, and higher means a long bias.
For shorter offset days:
If the new high is higher than R1, it is a loss, otherwise it is a profit.
In case of win, Pivot - Low will be listed as pip change. In case of loss, Pivot - R1 will be the pip change.
Other ways to have long deviation days
At the end add the point change rows and get the result. With some simple Excel data analysis, I got the results attached.
I'm not doing any optimization, just accepting every trade. On the tables and charts, I labeled three outcomes: best, expected, and worst. Basically, the "best" is the best case scenario, selling at all highs and losing no more than the initial stop loss. "Expected" is simply the winning points and 75% of the initial loss. The "worst" is a 75% profit point and a 125% loss point.
To trade manually, I simply get the DPP for the next few days at midnight EST (you can get these values online, no calculations required) and put in a buy/sell order based on the deviation and a stop loss (SL) of R1/S1, with no take profit. Since I was in Texas, I just went to bed. When I wake up in the morning, I check my order to see if it was successful, and if not, I cancel it. If it does happen and it looks good, I'll abandon it until about an hour before the London market closes.
Anyway, there you have it. I know there are some optimizations that can be done, such as not trading on certain news releases, but for a purely mechanical system it doesn't get any easier than this.
I'd love to hear comments, suggestions, complaints. If you would like my spreadsheet for your own analysis, please PM/email me and I will send it to you. It's set up so you can use your favorite currency and it automatically generates everything.
This is where Daily Pivot Points (DPP) come into play. With DPP I can determine the daily deviation (long or short) and a reasonable stop loss/take profit. Even better, it can be easily backtested using just the daily high, low, and closing prices. This is exactly what I did Oanda GBP/USD MT4 historical data going back to 2005.
My test rules are as follows:
Using the highest price, lowest price, and closing price, calculate R3, R2, R1, pivot, S1, S2, S3
R3 = High + 2* (Pivot - Low)
R2 = Pivot + (High - Low)
R1 = (2*Pivot) - Low Pivot = (Highest Price + Lowest Price + Closing Price)/3
S1 = (2*pivot) - high
S2 = Pivot - (High - Low)
S3 = Low - 2* (High - Pivot)
If the closing price (aka the opening price) is lower than the pivot point, it is a short bias, and higher means a long bias.
For shorter offset days:
If the new high is higher than R1, it is a loss, otherwise it is a profit.
In case of win, Pivot - Low will be listed as pip change. In case of loss, Pivot - R1 will be the pip change.
Other ways to have long deviation days
At the end add the point change rows and get the result. With some simple Excel data analysis, I got the results attached.
I'm not doing any optimization, just accepting every trade. On the tables and charts, I labeled three outcomes: best, expected, and worst. Basically, the "best" is the best case scenario, selling at all highs and losing no more than the initial stop loss. "Expected" is simply the winning points and 75% of the initial loss. The "worst" is a 75% profit point and a 125% loss point.
To trade manually, I simply get the DPP for the next few days at midnight EST (you can get these values online, no calculations required) and put in a buy/sell order based on the deviation and a stop loss (SL) of R1/S1, with no take profit. Since I was in Texas, I just went to bed. When I wake up in the morning, I check my order to see if it was successful, and if not, I cancel it. If it does happen and it looks good, I'll abandon it until about an hour before the London market closes.
Anyway, there you have it. I know there are some optimizations that can be done, such as not trading on certain news releases, but for a purely mechanical system it doesn't get any easier than this.
I'd love to hear comments, suggestions, complaints. If you would like my spreadsheet for your own analysis, please PM/email me and I will send it to you. It's set up so you can use your favorite currency and it automatically generates everything.
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