126 Pip Pivot Point Profit

Pivot Points are an incredibly useful online forex trading technique. A recent trade of mine yielded a 126 pip profit in only 50 hours, which grew my entire trading account by 10.04%, which is exceptional for 20-30 minutes worth of work!

Why Forex Pivot Points?

Pivot Points are one of the most commonly used methods of online forex trading. The pivot point takes the High, Low, & Close prices from yesterday and generates Support & Resistance target prices.
Forex Pivot Points are uncannily accurate when combined with the right directional entry strategy. In the example below you’ll notice the predictive nature of forex pivot points for online forex trading success.
Spotting Trend Direction
In the Forex Sailing course I explain the fibonacci wave theory for determining trend direction. In a recent post, I also explained EMA/MACD divergence for signaling key trend movements.
While the trade below could have been an excellent Sail, it also would have required a stop of several hundred pips, which would have violated the money management system followed by the LIVE Forex Training class.
For this reason, I used pivot points to capture a shorter term profit of 126 pips in 2 days. Here’s how the trade unfolded.

EUR/USD Daily Trend Moves Down

From Forex Sailing we had a forex umbrella handle form after breaking a longer uptrend on the daily chart for the EUR/USD. I’ve labeled the fibonacci wave with the key points of I, II, II on the daily chart below:

In the chart shot above notice how there is good separation of the EMAs and how the MACD is increasingly negative as prices make new lows. This is a strong signal that prices will continue moving down for several days. We also moved past II, which means we should move to a lower low to reach IV.
To confirm this direction I also looked at smaller timeframes, which lined up nicely as well to indicate downward movement. As indicated on this 4 hour chart below:
In this chart we also had nice EMA separation, and an increasingly negative MACD. While there was a fair amount of divergence, the trend direction was still downward. But a large enough stop was needed to make sure the divergence didn’t retrace too much before the trend continued.
The 15 min chart below also indicated a downward moving trend:

As newer lows were made we maintained a widening of the EMA, we also maintained strong negative MACD divergence as new lows were made.

Downtrend Confirmed -> Let’s Trade

With a downtrend confirmed on these timeframes, it was time to look at our pivot points for good stop/limit prices. For the entry price I used a price close to the pivot and found a EMA/MACD divergence on a 5 min chart.
Initially I set the following trade parameters:
Entry: 1.3397 short
Stop: 1.3547
Limit: 1.3274
This gave us a good reward/risk ratio of 82%. We were below the pivot price of 1.3453, so the stop was less likely to be hit than our limit. This initial trade would have netted 123 pips profit.

24 Hour Adjustment

The next day the pivot points were recalculated because the trade was still in progress.
Entry: 1.3397 short
Stop: 1.3411
Limit: 1.3271
This reduced our risk to only 14 pips, and increased our profit 3 pips from 123 to 126 pips. The next day the trade was exited for a profit. Here’s the picture of what happened during the life of this trade on the hourly chart:

You can see the entry price of 1.3397 (red line). You can see the price at which the limit was hit 50 hours later at 1.3271 (blue line). The stop isn’t included on this chart because that price was never approached
As you can see the price consolidated a bit, but moved downward overall. We managed to get in near the top of this price movement and captured a 126 pip profit in only 50 hours.

How to Use Pivot Points

This trade was a real trade that I not only traded in my own personal forex trading account, but also shared in depth with the LIVE Forex Training class. Pivot Points are one of three key trading methodologies that I teach daily through screen capture video, downloadable trade plans, and Q&A with all participants.
If you’d like to learn how to spot & execute trades like this on a regular basis, enroll in the LIVE Forex Training today and learn personally from a full time professional forex trader (that’s me)

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