Range-pivots trading system

mt4eas

Member
Pivots, how to buy and sell
I’d like to explain pivots and range pivots. These are probably the most basic yet most important rules I have learned in my years of experience trading the markets. It is a fact that a declining stock/ market can not go higher without a bullish pivot or bullish range pivot. Conversely, a stock or market in an uptrend will not head lower until after a bear pivot or bearish range pivot. Pivots and range pivots are the first sign of strength or weakness. Pivots are not a setup criteria. A setup criteria, such as ( overbought/ sold, valuation , seasonal, etc) tell you what to trade. Pivots tell you when to trade.

Pivots:
A bullish pivot occurs while in a down trend and is a day when the low is higher than the prior days low and the high exceeds the prior days high.
A bearish pivot occurs while in an uptrend and is a day when the high is less than the prior days high and the low is less than the prior days low.
Please see the chart below labeled pivots for a visual aid. The green highlight bars are bullish pivots and the red highlight bars are bearish pivots. The green arrows indicate a long trade and the red arrows indicate a short trade. I used a 10 day moving average to determine trend.

Range Pivots:
A bullish range pivot occurs in a downtrend and is a day when the stock or market rallies an increment of the prior days range ABOVE today’s opening price.
A bearish range pivot occurs in a uptrend and is a day when the stock or market declines an increment of the prior days range BELOW today’s opening price.

As an example if we are trading GE and yesterdays high was 20 and yesterdays low was 19 the range is ( high – low) = $1 , today GE opens @ 20.5, I will buy GE if it rises 30% of yesterdays range above today’s open. ( yesterdays range = 1 * 30% ) + 20.5 today’s open = enter long @ $20.8.
For a visual aid the chart labeled Range pivots highlights a strategy of entering the market on a bullish range pivot or shorting the market on a bearish range pivot . The thin green line that tracks above the open shows the spot for long entry’s and the thin red line shows the spot where shorts may be entered. The green arrows indicate a long trade and the red arrows indicate a short trade. I used a 10 day moving average to determine trend.

Below you will find performance report statistics based on the pivot and range pivot concepts explained. As a comparison I also show the performance report statistics of a random entry and 7 day exit. I used a 7 day exit because that is the average trade length of the Pivot / range pivot in shorts and longs. Each backtest was run on, every one of the S&P 100 stocks since 1962 , than all of the performance reports were combined for the statistics shown below. You can see that bullish/ bearish pivots and bullish range/ bearish range pivots clearly do outperform the random market entry, in all of the most important performance measurement criteria’s listed.

Take some time and look at some charts of any stock or market, you will clearly see that every major top and every major bottom is accompanied with a pivot and or range pivot. The next time you are looking to enter or exit a trade remember these very simple rules and your trading results will almost certainly improve.

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Hello,
Thanks for sharing !!!
However I am not able to access any of the pics or links you have posted. Can anyone help with this? Thank you.

FI
 

Matt Dye

New member
Is anyone aware of a Metastock addon (and/or) expert advisor that is based on the pivot point/range as presented by mt4eas?
 

mt4eas

Member
URLS =







 

mt4eas

Member
Conclusion
Our analysis, based on recent data from a large archive of
economic news releases and high-frequency asset prices, distills
some lessons about the response of financial markets to economic
news. In line with much of the earlier research, our study suggests
that only a handful of economic announcements—those con-
tained in the Employment Situation Summary, GDP advance
release, and ISM Manufacturing Report—affect asset prices in
significant and systematic fashion, while most other releases tend
to generate erratic or insignificant price responses. The strongest
impact of these announcements is on interest rates and the weak-
est is on stock prices. Asset responses for the most part show the
same patterns of sign and magnitude over different intraday
intervals, and generally support the view that asset prices rise in
response to news of positive growth and faster inflation. However,
researchers and practitioners seeking a reliable basis to analyze
the impact of economic news on financial markets will find
the immediate impact to be more precisely measured than the
full-day impact.
 
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