Stress free trading 4x Trading System For MT4

Stress free trading 4x Trading System For MT4

Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.

 

The Stress-free trading 4x Trading System for MT4 is an excellent yet straightforward trading method that utilizes price action on pivot point levels. The strategy's simplicity owes to its complete lack of technical indicators for recognizing trading opportunities. Its only components are the weekly and daily pivot points, and the setups it identifies are based on how the price trades between those points.

This article explains the proper methodology for trading this system and offers a few examples to illustrate its application.


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What are pivot points?

Pivot points are the average of the high, low, and closing price of the previous period and then plotted as horizontal lines on the current one. These periods are usually based on the daily chart, but they can also be on longer timeframes like the weekly or the monthly.

And the horizontal levels can extend up to three lines above or below the central pivot point and are categorized as layers of support and resistance.

 

How are pivot points calculated?

Here is the formula for calculating the main pivot point:

Pivot Point = (High + Low + Close) / 3.

And the formula for extending the initial support level is this:

S1 = 2 × Pivot Point − High

Conversely, for the primary resistance level:

R1 = 2 × Pivot Point – Low

Here is an illustration of how the weekly pivot point is calculated:


Again, the main pivot point will be manipulated to add more levels. Still, since this strategy only needs the daily pivot point and the weekly pivot point, the first formula shown above is the only one needed.

 

How do traders trade pivot points?

There are a variety of ways that traders use pivot points. Typically, pivot points are combined with oscillators that determine the price's overbought and oversold condition.

Fibonacci levels, candlestick patterns, and custom indicators are also combined with pivot points to create a unique trading method. But regardless of the strategy, the value of using pivot points exist in the fact that it outlines critical support and resistance levels.

And the market pays particular attention to these levels, especially with how the price fluctuates between them. Some pure price action strategies signal a trade just from where the price is situated in those levels. In fact, this system hinges on that same principle but uses a different trigger for a trade.

 

Which pivot point is best?

While the daily pivot level is commonly used, there is some significance in pivot points on the higher timeframes whereby a breach in those levels signifies a tremendous shift in momentum. But that is not to say that the shorter one, like the daily, carries no weight.

Because what is paramount is how pivot points are utilized according to where it is more relevant. For example, the most suitable pivot point with intraday trades is the daily while position traders could find the weekly chart to be much more appropriate.

 

The Stress-free trading 4x Trading System for MT4

Here are a few key reminders about this system:

 

    1. As mentioned, it does not require any other indicator aside from a custom MT4 indicator to detect the pivot point levels.

    2. There will be no other pivot levels that the system uses aside from the weekly pivot point and the daily pivot point.

    3. Trades are based on the price's position relative to the two main pivot points mentioned, thereby acting as a trade filter.

 

Now, the trading mechanics are simple. The first thing to do is to calculate the weekly pivot point.


Next, determine the price's location relative to the weekly pivot point. If the price is above the weekly pivot, only a buy trade will be taken, and if it is below it, sell trades are taken.


After that, switch to the trading timeframe, the 15-minute chart, and look for the daily pivot point. In this case, the daily pivot level is used for placing pending orders at a set number of pips from it. 

For example, a buy trade would have a pending order at 20 pips above the daily pivot and 20 pips below for a sell trade.

 

Trade Management - The Stress-free trading 4x Trading System for MT4

This system is called “stress-free” because it does not require the trader to monitor the charts actively. Trades are placed at the same time each day, which is during the market open, and are subsequently closed after the London session regardless of the trade's result.

Moreover, the strategy is proven to work only on two active currency pairs: EUR/USD and GBP/USD.

 

Buy Trade:

Here are the rules for buy trade:

 

    1. The opening price of the day must be above the weekly pivot point.

    2. If the price is below the daily pivot point, a buy stop is placed at 20 pips above it. On the other hand, if it is above the daily pivot point but not exceeding 30 pips, the same buy order is placed.

    3. Ideally, it is better to have the price within a 20-pip range from the daily pivot point. But if it is greater than that 30 pips, it is best to refrain from placing any order.

    4. Stop-loss is placed at 30 pips below the entry, and Take Profit is placed at 40 pips above the entry.

    5. Terminate each trade at the London Session's close regardless of the outcome.



In the example above, the first step that was taken is to calculate the weekly pivot point and then plot them on the chart. After that, the timeframe was switched to 15 minutes to visualize where the daily pivot point is using the indicator.

The price was clearly above the weekly pivot point upon Tuesday's open and 26 pips away from the daily pivot point (green line). A buy stop was placed 20 pips above the daily pivot point, but it has reversed after hitting the order a few minutes into the London session. The trade is still in play as of writing but will be terminated upon concluding London trading.

 

Sell Trade

Here are the rules for sell trade:

 

    1. The opening price of the day must be below the weekly pivot point.

    2. If the price is above the daily pivot point, a sell stop is placed at 20 pips below it. On the other hand, if it is below the daily pivot point but not exceeding 30 pips, the same sell order is placed.

    3. Stop-loss is placed at 30 pips above the entry, and Take Profit is placed at 40 pips below the entry.

    4. Terminate each trade at the London Session's close regardless of the outcome.

 

 

Warning: When you start trading this system then you should begin with a demo account. Every new trading system requires that you learn new skills. Errors will occur at the beginning and therefore you can save yourself money if you learn on a demo account.

Download the complete system description and the files here:

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