Pivot Based Trading (modified) 1:1 risk reward ratio

[radha55]

Hi All,

I want to modify the existing pivot based trading theory based on experience of last 3 months.

I describe the steps as below.

1. Firstly calculate the pivot values by entering previous day high, low, close in the file attached here. Download the Pivot Trading.zip file and extract it and the open the file.

2. Now based on this values choose values of your type(either normal or fibonacci)

3. Now divide the day into six ranges
1. R3-R2
2. R2-R1
3. R1-Pivot
4. Pivot-S1
5. S1-S2
6. S2-S3

4. Look at the price of futures/stock/underlying/commodities/currency at 10:25-10:30 am half hour after market opens.

5. The price will fall in any 1 (out of 6) ranges mentioned above.

6. Each range has upper limit and lower limit.

7. We buy above upper limit and sell below lower limit keeping strict profit target of 0.5% and stoploss of 0.5%.

8. Lets say price is in the range R1-Pivot. So we buy above R1 and sell below pivot.

9. Now the day does not ends here.

10. One you enter trade, you will either make profit or stoploss will hit.

11. At whatever price the profit is boooked or stoploss is triggered now becomes the base price.

12. Now we put this base price in any one (out of 6) ranges.

13. In whatever range it falls, apply the same rule of buy above upper limit and sell below lower limit.

14. Process continues till 15 min before market closes.

The main idea behind this is we keep booking small profit or small loss.
So we do multiple trades in a day.

Also note: The previous pivot theory also works well, but is good only in trending market.

This modifed theory is good for both trending as well as volatile market.

The worst will come when market is very volatile and market starts falling when u buy and starts rising when u short.

 

[bandlab2]

whats yr stoploss and target levels? 0.5% or 0.8% or 1%..

in this case SL, Target are at equal distance.

position size remains same in all trades? or it increases if we hit SL in prev trade

calculating the pivots, R1-3, S1-3 and entry rules are same as earlier? except we enter multiple times. is that correct?

i am not a TA guy, but imo, resistence, support are functions of prev hi, lo , close values , not where u booked yr profit/loss. if i book at 0.5% i may get dierent set of numbers and i u book at 0.8% then u get different set. any explanation on this?

any back test results?

 

[vicky_ag]

Bandlab,

I think there is a mention to 0.5% of profit and S/L.

What radha meant was, once target or S/L is hit, you need to look for the next level ie the new price now acts like the price @ 10.30 wherein, you look for the nearest levels to buy and sell.

@Radha

The major issue, from my point of view, is how to maintain the buy above and sell below ?

My point being, I have tried entering limit orders of both buy and sell at once but that doesnt seem to work on my broker(Sharekhan). Is it that you watch the price ??

 

[kakaji]

some call it spam ....i remove it...not intrested to share at all

 

[radha55]

see this chart Pivot based....


This is a spammer

Please ban this person MODERATOR.

I saw this message in Pride's thread as well.

MODERATOR PLEASE LOOK INTO THIS. THIS IS AGAINST FORUM RULES

 

[radha55]

Bandlab,

I think there is a mention to 0.5% of profit and S/L.

What radha meant was, once target or S/L is hit, you need to look for the next level ie the new price now acts like the price @ 10.30 wherein, you look for the nearest levels to buy and sell.

@Radha

The major issue, from my point of view, is how to maintain the buy above and sell below ?

My point being, I have tried entering limit orders of both buy and sell at once but that doesnt seem to work on my broker(Sharekhan). Is it that you watch the price ??

Vicky, you are right fot the first two point. I exactly meant what u told.

The advantage with this, i see is we follow with the trend.

To answer your query, i am part time trader, so i cant look into the values all the time continuously, i have other work pressures too.

I place a stoploss buy and stoploss sell order.

Once that get executed, i remove the pairing (buy or sell order) and wait for 0.5% or 0.5% stoploss to hit.

Then at whatever price my profit or loss is booked, i take that price as base and try to find the nearest buy and sell values.

Again i place stoploss buy order and stoploss sell order. Repeats... Repeats....Process repeats.

 

[radha55]

I could not explain this thoery for today's market, because for todays market the prices were outside the range R3-S3. So no calls triggered today.

 

[vicky_ag]

Radha which broker you are on? Cause on mine i cant put both buy and sell at once. Either, it is buy or sell not both.

 

[radha55]

Radha which broker you are on? Cause on mine i cant put both buy and sell at once. Either, it is buy or sell not both.

I use Indiainfoline.

You can place two orders. It should accept. However, it will consider the two orders as different order, os your margin will be blocked on both sides.

 

[radha55]

Let me explain with today's Nifty Future Example.

I am a paper trader.

As mentioned in first post, R1,R2,R3<Pivot,S1,S2,S3 are calculated and their values are as follows.

R3 R2 R1 Pivot S1 S2 S3
4275.9 4205.45 4159.15 4088.7 4042.4 3971.95 3925.65

At 10:25-10:30 Nifty Future was 4128 - 4135

This is between R1 and Pivot.

So we buy above R1 (4159)
R1 buy trigerred.
0.5% profit=4179

Now, we take 4179 as the base value.
4179 is between R1 and R2.

So we sell below R1 and buy above R2.
R2(4205) buy trigerred.
0.5% profit = 4226

Now we take 4226 as the base value.
4226 is between R2 and R3.

So we sell below R2 and buy above R3.

No Calls triggered.

Total Profit.
1. 4179-4159 = 20 points.
2. 4226-4205 = 21 points.

Total Profit = 41 points.