Magpie Trader
Thursday, October 06, 2005
3 day pivot strategy with MACD
As can be seen from 'A', it's not a 'given' that the price will continue, but used in conjunction with ACD day signals, or your own system, or even just basic trend lines, the alert to reverse is there - and if it doesn't materialise, then the trend will continue for a few days at least.
This strategy revolves around a day trading strategy providing the entry signal and the 3 day pivot range and MACD keeping the trade going.
I use a combination of bollinger bands across all time frames. the 8, 17, 34, 68, 170 EMAs, historical support and resistance, MACD (settings 9,19,6), chart patterns, fibs, the ACD method (Mark Fisher, who wrote the book 'The Logical Trader') and the FXovereasy strategy very kindly released by Perky.
Money management for this strategy revolves around a multi lot initial entry that takes 30 to 50 pips on a limit initially depending on the pair, then moving the stop to break even then below the previous days 3 day pivot range. When indications are that the trend is coming to an end I'll either scale out or close entirely (my broker doesn't use trailing stops).
This chart shows the USDJPY pair, but there's a long term trend line just under the last bar, plus there's divergence north on the 30 min chart, so I'll sit and wait for confirmation, which will probably be tomorrow now. If price does stay above the 3 day pivot range then the up trend will continue, price is at long term resistance currently and seems to be stalling.
// posted by Magpie @ 12:08 am 
