First, I thought of taking a short trade on GBPUSD, as the pair had been forming a descending triangle, with yesterday's lows holding as support. However, I was concerned with a previous low at 1.5440, so I didn't jump in right away. Also, it was right before the start of the European session, so I wasn't sure whether it would fade or not. Before I knew it, the pair had dropped all the way to 1.5400.
Then, I missed a trade as price tested the lower bound DATR, which lined up sweetly with the psychological support. The pair then rose another 40 pips!
Now, part of the reason why I didn't take these trades were because I was trying to figure out how the heck MACD works. From what I noticed today, I supposed I could use MACD to help me confirm whether a breakout is in the cards or not, or if we're about to see a reversal. Of course, the problem with MACD is that it is a lagging indicator. I'm going to need to observe it a little bit more and I wanna see how I can integrate it with pivot points.
Speaking of pivot points, I did some back testing to see how pivot point levels held up for EURUSD during the month of August. What I did was that I took note of how price acted whenever it approached / was trading around a PP level. I marked down if
a) it held and price completely reversed
b) it had an initial bounce and then pushed through (I measured how big the initial bounce was)
c) if price consolidated around the level (and I got the range)
d) if the level became S to R or R to s
e) if there was a fake break.
As of now, my data sample is really small, but thanks to the pivot point indicator of my charts, I think i'll be able to go back more and get more data. I'll be keeping a google spreadsheet of this now and CONTINUE it (I stopped last time I tried). I think I have more knowledge of pivot points now and I think it fits my trading style because I like trading horizontal support and resistance levels.
Leave A Comment
Please sign in to comment.