23# Stress free trading 4x Trading System
Pivot Points Levels Set and Foreget forex strategy
Submit by Immi S. (written by Immi S.) 07/10/2013
I began another research and came across “Set and Forget” Trading system. People use different ways to trade with Set and Forget style. I started testing it and developed my own style and after months of testing I finally got my “STRESS FREE TRADING SYSTEM”.
It uses 3 most important concepts of trading that almost all the Professional traders follow.
Daily High Low Close
Usage of pivot points has been done through the ages by floor traders as it gave them an easy method to obtain an idea of where the markets are headed on any given day utilizing a few simple calculations. The pivot points and the support and resistance levels calculated from them are known as pivot levels.
They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.
The high, low and close of a market on a daily basis is the data that is used to find out the daily pivot points. The market opening and the pivot point can determine the type of trading to be expected for the day. If the opening of the market is above the pivot point then you can expect a day of long trades and if it opens below the pivot point then the bias is towards short trades.
Weekly Pivots are more precise as the longer the time frame the more robust and clear their potential as level of support and resistance. As long as the price is above them, you take only Buy orders and if the price is below them, you take sell orders.
Combining both Daily and Weekly Pivots can give better results.
I have attached a free daily pivot indicator that I got from Internet that automatically calculates the Pivot Levels based on previous day’s High and Low so you do not need to make the calculations for daily pivots. You need to copy it in Experts > Indicators Folder of Meta trader and you just have to open it on 15 min chart.
For weekly pivots, you can switch to weekly chart on MT4 platform and then note down the calculations from the candlestick bar.
How to Trade?
We trade only 2 currencies – EUR/USD and GBP/USD.
Example of a EUR/USD Trade:
Data on Weekly chart was as follows:
High – 1.3565 Low – 1.3463 Close – 1.3522
H + L + C / 3 = 1.3517
That is our Weekly Pivot. (Same from Monday to Friday)
As long as the price is above 1.3517, we will buy EUR/USD and if we get entry points below 1.3517, we will sell EUR/USD.
Now the daily pivot points:
Last day of the week will be Friday so we will take that to find out the daily pivot from daily chart.
You can attach Daily Pivot Indicator on M15 Chart and it will update the Daily Pivot levels automatically so you do not need to make the calculations.
High – 1.3565 Low – 1.3475 Close – 1.3522
H + L + C / 3 = 1.3520 is the Daily Pivot.
Now we have both weekly and daily pivot point so we will switch to 15 min chart to get the entry points.
On Monday, let’s say the market opens at 1.3525.
It’s above weekly pivot so we will take buy orders. Pending order after market open:
1) Buy Stop – 1.3540 (20 pips above Daily PP)
Take Profit – 1.3580 and Stop Loss – 1.3510.
Weekly Pivot is used to identify overall trend and market sentiment and Daily Pivot is used to get the entry points.
You need to open the trades depending on your broker’s time zone. It will be same time every day when the market opens and you can close the trade just after London Session close irrespective of Profit or Loss (if the take profit or stop loss is not hit).
You do not need to monitor the trades the entire day or wait for hours to get entry points. You just need to set pending orders at the beginning of the day.
Example of GBP/USD trade:
Weekly Pivot – 1.6081 (It will be same from Monday to Friday).
Daily Pivot – 1.6061.
On Monday, the price opens at 1.6051 so we will take Sell order as it is below Weekly Pivot.
1) Sell Stop – 1.6041 (20 pips below Daily PP).
TP – 1.6001 SL – 1.6071.
Assume Daily Pivot for Wednesday is 1.6185.
On Thursday market opens at 1.6170.
The price is below daily pivot; however it is above weekly pivot (1.6081) so we will take Buy Stop Pending order.
Order will be:
2) Buy Stop – 1.6205 (20 pips above Daily PP).
TP – 1.6245 SL – 1.6175
SUMMARIZE THE STEPS TO SET PENDING ORDERS:
(Steps are the same for both EUR/USD and GBP/USD starting from Monday ending on
1) Open MT4 Platform and switch to Weekly Chart.
2) Note the High Low and Close of the last candlestick and get the Weekly Pivot.
3) Switch to M15 Chart and daily pivot will already be calculated (Daily Pivot Indicator).
4) If PRICE above Weekly Pivot then BUY STOP ORDER 20 pips above DAILY PP.
5) If PRICE below Weekly Pivot then SELL STOP ORDER 20 pips below DAILY PP.
1 PENDING ORDER FOR EUR/USD and 1 PENDING ORDER FOR GBP/USD every day.
NOTE: Some days the market might open 30-40 pips above or below daily pivot point. In such scenarios, you should not take any orders for that day as it will be below the entry points. If you have time, you can wait for the price to come near the Pivot point and then place pending order.
Account Size, Margin Per trade, Stop Loss and Take Profit:
It is ideal that you have a minimum of $500 or $1000 Account size.
Advantages of Stress Free Trading 4x:
1) No complicated charts and indicators.
2) No need to monitor trades entire day and wait for entry or exit signals.
3) Use of Pivot Points, S/R levels and daily high lows. This data is used by almost every professional data to make trades.
4) Use of Money management and risk management that is directly proportional to disciplined trading.
5) Good ROI every month.