5 min scalping with Pivot points levels is a trading system based on pivot points, tool, used by traders in all sorts of markets.
Pivot points are support and resistance levels based from the previous periods high, low, and closing values. There are a many of pivot values with which to trade, thay are: monthly, weekly, and daily values. In 5 min scalping with pivot points Ill use daily pivot points for the purpose of
this forex strategy because the focus is day trading. All trading platform have a tool or indicator che draws on the chart the pivots point levels.
As example Ill show you how to calculate pivot values.
Pivots = (H + B + C) / 3
S1 = (2 X Pivot) – H
S2 = Pivot – (H – B)
S3 = B – 2X (H – Pivot)
R1 = (2 X Pivot) – B
R2 = Pivot + (H – B)
R3 = H + 2X (Pivot – B)
Support levels =S1, S2, S3. Resistance levels= R1, R2 and R3 . H=the highest price the day before, B= the lowest price the day before and C= the closing price.
The pivot values are plotted as horizontal levels they are like lines of support and resistance. The pivot point it self can be thought of as the days mid-point. Its where the buyers (bulls) and sellers (bears) meet to determine the days trend in a currency pair. The support and resistance levels that are plotted around the pivot point are just that: potential support and resistance.
The idea: Pivot points are great levels of support and resistance. The moment price comes and touches them it bounces off like a tennis ball.
Usually You can expect: 69-79% winning trades.
Currency Pairs: majors with lowest spreads (EUR/USD GBP/USD GBP/JPY USD/JPY, AUD/USD, NZD/USD, EUR/JPY.
Charts: 5Min
Target: 5-10 pips
A pivot point level is often turning point in the direction of price movement in a trending market. For example: in an up trending directional market, the pivot point and the resistance levels are a ceiling level in price above which the uptrend is no longer sustainable and a reversal may occur;In a down trending market, a pivot point and the support levels may represent a low price level of stability or a resistance to further decline.
Setup:
Determinate current short trend .
For determinate the trend add two mowing averages (21 EMA and 50 EMA and trend line tool)
Trend line pointing up, 21 EMA > 50 EMA trend is up.Trend line pointing down 21 EMA<50 trend is down.
Calculate Daily pivot points or add a indicator pivot point for your favorite currency pair.
Watch your 5 minute chart. Place order in the direction of the the trend.
Buy
Trend line pointing up.
11EMA > 50 EMA, when the price touches pivot point levels and the candle price close above place a buy order.
Sell
Trend line pointing down
11EMA <50 EMA, when the price touches pivot point levels and the price candle price close below place a sell order.
Set stop loss 3 pips + spread on the other side of the pivot line.
Take profit with profit target 5-10 pips.
Trade example.
In first example GBP/USD 04/11/2014 5 min chart market go Sideways do not trades, trend line is weak, not trending direction.For this strategy to find market trends.
The second example AUD/USD the short trend is up. We place only buy order with profit target 5 pips. In this example 4 trades win.
