Pivot Trading- a new way of Trading

[traderniftybank]

Are you referring to my pm and is it inactive

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[vivektrader]

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Wasn't knowing about that, shall tweak my settings.
Thanks

 

[Vipul_84]

Thanks Mr Smart_Trade sir, Shubhadip sir, Vivek, MonkeyBusiness for such a prompt reply.

Few things:

1. Yes, the thought was this only, first decide destination and then search for path. Many traders I have seen here making much more points than 120, but I thought of 120 for a simple reason "I am newbie... " Hope I am on right track.

2. As Smart_Trade sir clarified, Pivot method is superior to MA method due to fundamentals of structure. Yes, at the same time MA is simple. So will begin with simple and then move towards detailed method.

3. Will focus on 60/15 combination for NF. Will do some back-testing and then watch for a month before taking any trades at actual

Thanks all again...

Hello Smart Trade Sir and Shubhadip sir,

Many many new concepts in this thread ...

Have some queries though
For a beginner like me, which method is more suitable? Pivot based or MA based? No previous experience as of now for me.

My goal is to make min 120 points in nifty futures, intraday basis. I am following Shubhadip sir's posts in ".... 40 trades", so starting with 3 Lakhs and 2 lots of Nifty. All trades to be intra-day trades. Goal is to make yearly 1500 pts using only Nifty futures. Is it possible?

Which method should I select: Pivot or MA based method ?
If MA, what should be time frame combination? 60 min - 15 min okay? Like Shubhadip sir, I am also working but can keep track of charts on KITE.

You have set your goals without deciding your system?

Decide the destination, path will follow:thumb:

besides he is aiming for 120 points monthly, bit high for beginner but not day dreaming.

Pivot method is definately superior as far as knowing the market structure and profitability but it has many concepts which one needs to master. MA system is comparatively simpler and easy to trade. The choice depends on which system you like and your comfort level.

MA system is also good and it can make a trader profitable. I remember one person who traded another MA system called Swift and was very successful ...so if comfortable with MA system you can follow that. But every system will have drawdowns, wrong trades, stoplosses...there is no escape from that. So ask yourself what you are comfortable and trade that.Dont think that MA method is anyway inferior to other methods.

There are people who just trade on 21 MA and still make good profits. One should understand the method, its various nuances to be successful with it.

Smart_trade

My Dear Friend Vipul, hope you have already got your answer as already answered by ST Sir.

Still want to make some comments;
For beginner like you MA method is more apt; but it needs the basic training of the PIVOT method as well. Both the methods are interdependent.

For your kind information, I have done it in BNF, not in NF as BNF is more volatile & more movement in it.

I believe in “Nothing Impossible”, but I also believe in the following line also “There is nothing called Free Lunch.”

Please back test any method whichever you want to do or want to trade. Some day’s paper trading will be more beneficial also to you in any new method.

 

[RiddhiPD]

There are few things which I think needs further discussion.

Being someone who is trading sometimes profitably and other times in loss (especially while trying out new strategies /ideas) I am always in look out for a trading system to settle in.The basic criteria of a good trading system according to my opinion is

1.It should be/can be traded objectively in all situations.

2.In a month or around twenty trading days it should give a trader clear statistical edge in risk/reward ratios and win/loss ratios.

We can divide most trading idea in two basic categories - Price action based trading and Indicator based trading.Both have their pros and cons but for a trader starting out price action based trading proves more difficult to master due to its subjectivity.It is far more easier for experienced traders to trade on the basis of price action but as a newbie whose main concern is to protect capital,price action based trading proves more difficult in real time.Identifying Pivots,S&R in real time is a difficult proposition.

Thus we come to indicator based approach.I do trade with the help of moving averages and although my ideas have few cosmetic differences but basic thought is same.

Positives of this MA approach,

1.MA system easier to trade.

2.Being objective it makes decision making easier.

Now here are the problems of moving averages based trading.

1.In the time of sideways movement any moving average based trading system would bleed money.

2.We are never sure when exactly price breaks out and thus we in most cases cant catch tops and bottoms and only middle of the movement.

3.Entries are far easier to take then exits in cases of fast moving instruments.Exits are still subjective if we want to maximise profits.


All the charts and paper trade and real trade all points out to same problems or the variations of them.

Proposed solutions ( Few ideas to think about)
===================================

1.Selection of Instrument - First of all before any one one even attempts MA based system we need to acknowledge that all instruments are not suitable to trade with MA based system.
Any instrument where price spends considerable time trading sideways and then spikes up or down and reaches target is not a good instrument to trade.(most thinly traded instrument,few metals show this pattern).

Where price goes up or down in smaller increments with a clear angled patterns(makes regular higher high and higher low in uptrend) are more profitable to trade with MA.For example I also agree with Subhadip that Crude is a good candidate to trade with MA but statistically how good needs to be ascertained by backtesting.I am not good with that.So if someone publishes any result I will be interested t read that.

We as a community can come up and identify from price patterns which instruments are good with MA and which are not.

2.Time to trade- After identifying the good instruments we need to ascertained statistically probable time frame to trade and when not to trade.

For example if someone trade good from 5 to 10:30 P.M he has a higher chance of success than someone who trade from 10 to 3 in morning.We need to ascertain this from each instrument individually.

3.Time period of MA - What I am interested to know that whether changing or tweaking time period of MA instrument wise can have a statistically significant impact upon profit.I have a hunch that not all instrument will be same amount of profitable trading with same MA.We need to tweak MA period based on the instrument.I am open to idea that all instruments should be traded with same MA if can be backtested properly.

4.Time frame of particular instrument to trade.-For example using same amount time frame gives a hugely different result in crude and silver.We need to ascertain depending upon instrument which gives better result in various oft used time frames like 3,15 or hourly.

4.Trading sideway market - I am all eager to read how sideways market can be traded by subhadip.

But even without the document if we can calculate may be in six months profitability of MA system including the sideways market we will be much confident in trading that.

I have a hunch that if we can avoid worst periods(e.g -morning session in Crude) then in trending periods even if we enter the sideways market but can specify rule to Not get out MA system will be a better system.For example if we lose say 40 points in sideways market but can capture 60 points in trend then MA can be profitable to trade.

Other than that using oscillators and not buying in overbought zone and avoid selling oversold zones from stochastic and using Bollinger band to identify sideways movement would be great idea.Hope it will be elaborated later.Secondly finely tuned super trend does a great job to avoid whipsaws.Just a few ideas to be discussed later,if possible.

5.Trading Events - In commodity and in many cases equities react violently to news/events.Before any news event there is an extended period inactivity.

We need to be clear what will be our trading rule in those times.

6.Spikes and abnormal jumps - Anybody who trades crude surely has seen abnormal jumps within a minute and then price comes back and resumes the activity but in those cases it takes away the SL.What are the impacts of those spikes in MA and consequently in profit.

7.Clear and Precise Exit Rule - I am waiting for exit rules to be more clear and precise so that decisions can be taken without subjective bias.

Subhadip has done a great job in coming up with a great trading system and with more discussions on it we hope to make it a better one.:thumb:

 

[wisp]

MA method trades (I dont trade the method, these are paper markings only)

pale green/pink bars are 15 min bars on 3 min chart

Green/Black are htf ema/ma

 

[vijkris]

hi, in my opinion,
1. price action method( especially rally and declines) explained by subhadip
is the easiest, if compared to other books. So a newbie will definitely understand if he reads the thread from the beginning.

2. "Identifying Pivots,S&R in real time is a difficult proposition." - agreed. marking pivots in higher timeframe like 15min or hourly reduces the difficulty.

3. a mechanical system can be backtested by creating afl etc. but this system can only be backtested visually/ using bar playback in amibroker, so no stastical data will be available.( pls correct me if i am wrong !)

3. when not to trade is very imp. pratap sir's vwap thread has more information regarding sideways/when not to trade...
here also in previous posts i think sideways and range trading was discussed briefly.
4 . b4 any event our should be wait and watch, rather than getting "spiked" in all direction.

regards.

There are few things which I think needs further discussion.

Subhadip has done a great job in coming up with a great trading system and with more discussions on it we hope to make it a better one.:thumb:

 

[Subhadip]

There are few things which I think needs further discussion.

Being someone who is trading sometimes profitably and other times in loss (especially while trying out new strategies /ideas) I am always in look out for a trading system to settle in.The basic criteria of a good trading system according to my opinion is

1.It should be/can be traded objectively in all situations.

2.In a month or around twenty trading days it should give a trader clear statistical edge in risk/reward ratios and win/loss ratios.

We can divide most trading idea in two basic categories - Price action based trading and Indicator based trading.Both have their pros and cons but for a trader starting out price action based trading proves more difficult to master due to its subjectivity.It is far more easier for experienced traders to trade on the basis of price action but as a newbie whose main concern is to protect capital,price action based trading proves more difficult in real time.Identifying Pivots,S&R in real time is a difficult proposition.

Thus we come to indicator based approach.I do trade with the help of moving averages and although my ideas have few cosmetic differences but basic thought is same.

Positives of this MA approach,

1.MA system easier to trade.

2.Being objective it makes decision making easier.

Now here are the problems of moving averages based trading.

1.In the time of sideways movement any moving average based trading system would bleed money.

2.We are never sure when exactly price breaks out and thus we in most cases cant catch tops and bottoms and only middle of the movement.

3.Entries are far easier to take then exits in cases of fast moving instruments.Exits are still subjective if we want to maximise profits.


All the charts and paper trade and real trade all points out to same problems or the variations of them.

Proposed solutions ( Few ideas to think about)
===================================

1.Selection of Instrument - First of all before any one one even attempts MA based system we need to acknowledge that all instruments are not suitable to trade with MA based system.
Any instrument where price spends considerable time trading sideways and then spikes up or down and reaches target is not a good instrument to trade.(most thinly traded instrument,few metals show this pattern).

Where price goes up or down in smaller increments with a clear angled patterns(makes regular higher high and higher low in uptrend) are more profitable to trade with MA.For example I also agree with Subhadip that Crude is a good candidate to trade with MA but statistically how good needs to be ascertained by backtesting.I am not good with that.So if someone publishes any result I will be interested t read that.

We as a community can come up and identify from price patterns which instruments are good with MA and which are not.

2.Time to trade- After identifying the good instruments we need to ascertained statistically probable time frame to trade and when not to trade.

For example if someone trade good from 5 to 10:30 P.M he has a higher chance of success than someone who trade from 10 to 3 in morning.We need to ascertain this from each instrument individually.

3.Time period of MA - What I am interested to know that whether changing or tweaking time period of MA instrument wise can have a statistically significant impact upon profit.I have a hunch that not all instrument will be same amount of profitable trading with same MA.We need to tweak MA period based on the instrument.I am open to idea that all instruments should be traded with same MA if can be backtested properly.

4.Time frame of particular instrument to trade.-For example using same amount time frame gives a hugely different result in crude and silver.We need to ascertain depending upon instrument which gives better result in various oft used time frames like 3,15 or hourly.

4.Trading sideway market - I am all eager to read how sideways market can be traded by subhadip.

But even without the document if we can calculate may be in six months profitability of MA system including the sideways market we will be much confident in trading that.

I have a hunch that if we can avoid worst periods(e.g -morning session in Crude) then in trending periods even if we enter the sideways market but can specify rule to Not get out MA system will be a better system.For example if we lose say 40 points in sideways market but can capture 60 points in trend then MA can be profitable to trade.

Other than that using oscillators and not buying in overbought zone and avoid selling oversold zones from stochastic and using Bollinger band to identify sideways movement would be great idea.Hope it will be elaborated later.Secondly finely tuned super trend does a great job to avoid whipsaws.Just a few ideas to be discussed later,if possible.

5.Trading Events - In commodity and in many cases equities react violently to news/events.Before any news event there is an extended period inactivity.

We need to be clear what will be our trading rule in those times.

6.Spikes and abnormal jumps - Anybody who trades crude surely has seen abnormal jumps within a minute and then price comes back and resumes the activity but in those cases it takes away the SL.What are the impacts of those spikes in MA and consequently in profit.

7.Clear and Precise Exit Rule - I am waiting for exit rules to be more clear and precise so that decisions can be taken without subjective bias.

Subhadip has done a great job in coming up with a great trading system and with more discussions on it we hope to make it a better one.:thumb:

hi, in my opinion,
1. price action method( especially rally and declines) explained by subhadip
is the easiest, if compared to other books. So a newbie will definitely understand if he reads the thread from the beginning.

2. "Identifying Pivots,S&R in real time is a difficult proposition." - agreed. marking pivots in higher timeframe like 15min or hourly reduces the difficulty.

3. a mechanical system can be backtested by creating afl etc. but this system can only be backtested visually/ using bar playback in amibroker, so no stastical data will be available.( pls correct me if i am wrong !)

3. when not to trade is very imp. pratap sir's vwap thread has more information regarding sideways/when not to trade...
here also in previous posts i think sideways and range trading was discussed briefly.
4 . b4 any event our should be wait and watch, rather than getting "spiked" in all direction.

regards.

A big question, took almost 15 min to understand the question.

Thanks for all the good words.

What I have understood by interacting with many traders that all want to get the success, but very few want to do the hard work by himself. But my experience tells me that in trading the “MIND” is everything. I know at-least three very profitable setup, which I have already told/ hinted or marked in charts. But none will understand them till they see them in chart in live. This is purely due to not having training. Who will train them? One himself/ herself have to train their eye. The eye will know those which his/ her brain knows.

Now knowledge given/ shared in this thread is more than sufficient for any one’s life to earn big, but none will understand this as every one want a “HOLYGRAIL”/ a method which have no failure----never hit SL. Believe me- there is no method like this in this earth. If it is happens to be there, Reliance or some big company will buy them and earn a big money, but they are not, so it signifies that they do not have one. I can show path only, but you have to travel.

Also regarding not taking the step/ trade/ add during live trading: till you believe in the system, you will have a big HEART beat hearing always. But only remedy I have, for all, is please do back test. Now if in back test data of six month or 1 yr shows you that if you follow the method, you will earn big, then you will believe in the system and you can bet on the method. Till you have TRUST in the method- you will have heartbeat hearing always when in small profit or when SL is hitting. In real time price moves up/ down- you will miss add- till you are comfortable with the adds/ reentry if needed.

These two system I have shared are the most profitable as far I have understood. Believe me I have tested many methods & forgot the counting also. The pivot / MA system gives around 60:40 ratio in profitability. Pivot trading is difficult, whereas MA system is easy, but the basic is same in both the method. You can not understand the whole MA system without the Pivot learning- both are interconnected.


For tonight these much as in trading a SIDEWAYS of Crude....

 

[sangram1705]

& when the high of this candle is taken out, we should go long.

 

[Subhadip]

Wait for pivot high break, as pivot is very near by.

 

[vivektrader]

When a pivot breaks should we allow the 5min candle to close above that pivot and then enter over its top or enter straightaway. If the question appears foolish excuse me for that, coz many a times I entered and it failed immediately.