Pivot Points Trend Strategy For MT4

Pivot Points Trend Strategy For MT4

The Pivot Points Trend Strategy For MT4 is a trend following strategy to find the short term trend reversal technique towards the major trend. Moreover, this strategy uses momentum trading, where we should follow the direction of major market participants.


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The Pivot Points Trend Strategy For MT4


The Pivot point is one of the major trend identifiers that use the supply and demand of the price.

When the supply is higher than the demand, the price will fall, and when the demand is higher than the supply, the price will move up.

Before proceeding further, let's have a look at trading tools for this strategy:


  1. Daily Pivot Points

  2. Moving Average Convergence and Divergence (MACD)- value (12, 26, 9)

  3. Exponential Moving Average (EMA)- value 50



Let's plot these indicators in the chart and see how it looks like:





How does The Pivot Points Trend Strategy For MT4 work?


In this trading strategy, we will use multiple indicators to have an overall outlook on the price. Let's have a look at what these trading elements say about the market:


Daily Pivot Point


This trading indicator shows the equilibrium point where the supply and demand remain almost the same. If the price comes to the equilibrium point, it is likely to start a new movement.

Moreover, this indicator shows a specific support and resistance level from where the price is likely to reverse. Therefore after making a move from the Pivot Point, we have to wait for the price to test the support and resistance level, and we will close the trade if the price rejects any support or resistance level.


MACD


MACD is an indicator of the Oscillator class that provides the possible market reversal point. The primary use of the MACD is to identify the Divergence point where the price and the MACD do not follow the same direction.

Moreover, the MACD Histogram provides the market momentum by moving above or below the zero lines.

If the Histogram moves above the zero lines, the price is likely to move higher. On the other hand, if the price moves below the zero lines, the price will likely move lower.

This strategy will use the MACD as a trend continuation indicator by determining whether it moves above or below the zero lines.


Exponential Moving Average


The Exponential Moving Average or the EMA is a trend identifier that provides the market's average outlook. If the price moves above the EMA, the trend will continue higher in the coming days or sessions.

The main difference between the EMA and the SMA is that the EMA focuses on the most recent price actions that help traders provide a better price outlook.

For example, if the price moved above the 100 EMA in the daily chart, it indicates that bulls became stronger than bears based on the last 100 candles activity. On the other hand, if the price moved below the 100 EMA, it indicates that bears became stronger than sellers based on the last 100 days' activity.

The moving average is the world's most used trend identifier used by professional and institutional traders. However, the main drawback of this indicator is that it is a lagging indicator. Therefore, you should use other indicators beside it.



Pivot Points Trend Strategy For MT4 - Bullish Trades


This trading strategy is based on intraday trend continuation; therefore, it is suitable for the m30 or H1 timeframe. Moreover, this strategy uses the Pivot Point, so using a higher than the H1 timeframe might make trading harder.

Moreover, this trading strategy is suitable for EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, NZDUSD, and USDCAD.


Bullish Trading Conditions


Before taking an entry, make sure to follow these trading rules:


  1. The price is above EMA 50, indicating that the overall market context is bullish.

  2. The MACD Histogram moved above the zero lines and aimed higher.

  3. The price corrects to the Pivot Point and starts to move higher.



Entry


After confirming all conditions enter the trade as soon as the price rejects the Pivot Point. In that case, the rejection might be with the candlestick pattern with a bullish candle above the Pivot Point. Make sure to enter the trade after the candle closes.




Stop Loss


The ideal stop loss for this strategy is below the recent swing low. Therefore, move your stop loss below the Pivot Point and swing low with a 10 to 15 pips buffer.


Take Profit


There are multiple resistance levels in the Pivot Points from where the price is likely to move lower. Therefore, the first take profit will be at R1, where you should close 50% of the trade. Later on, close the full trade when the price reaches the R2 level.



Pivot Points Trend Strategy For MT4 - Bearish Trades


This trading strategy is based on intraday trend continuation; therefore, it is suitable for the m30 or H1 timeframe. 

Like the bullish trading strategy, this trading strategy is suitable for EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, NZDUSD, and USDCAD.


Bearish Trading Conditions


Before taking an entry, make sure to follow these trading rules:


  1. The price is below EMA 50, indicating that the overall market context is bearish.

  2. MACD Histogram moved below the zero lines and aiming lower.

  3. The price corrects to the Pivot Point and starts to move lower.



Entry


After confirming all conditions enter the trade as soon as the price rejects the Pivot Point towards the downside. In that case, the rejection might be with the candlestick pattern with a candle close. Make sure to enter the trade after the candle closes.




Stop Loss


The ideal stop loss for this strategy is above the recent swing high. Therefore, move your stop loss above the Pivot Point and swing high with a 10 to 15 pips buffer.


Take Profit


There are multiple support levels in the Pivot Points from where the price is likely to move higher. Therefore, the first take profit will be at S1, where you should close 50% of your trade. Later on, close the full trade when the price reaches the R2 level.



Pivot Points Trend Strategy For MT4 - Summary


Let's summarize The Pivot Points Trend Strategy For MT4:


  • This trading strategy is an intraday trend following strategy that can provide a nice movement in the London or New York trading session.

  • The entry-level will be based on the rejection from the Pivot Point.

  • The stop loss is based on the current swing levels.

  • The take profit is based on the Support or Resistance levels on the Pivot Point.



Overall, this trading strategy is profitable, and traders can make a decent profit from it from all levels.

Download the complete system description and the files here:

FREE Pivot Points Trend Strategy

Download the FREE Pivot Points Trend Strategy for MT4.

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