The Daily Pivot trading system belongs to the class of breakout strategies, that is, signals for deals are generated if the price passes some calculated levels. The developers of the system recommend using it on the GBP / USD currency pair. In addition, it is recommended to use it for an hourly time period. At the same time, trading is carried out within the day, which is quite convenient for many players in the forex market.
If you decide to trade according to this strategy, then you will need only one indicator, its name coincides with the name of the strategy, namely, the Daily Pivot indicator. It can be noted that it is not difficult to deal with it, but its essence lies in the fact that ten levels are drawn on the chart, according to which decisions are made about concluding deals, maintaining them and exiting purchases or sales.
However, there are modified options in which a different number of levels can be used. In the standard version, they have the following names: R3, R2.5, R2, R1.5, R1, R0.5, Daily Pivot, S0.5, S1. S1.5.
The rules for trading by Daily Pivot levels are as follows:
1. When the hourly period candlestick touches the R0.5 level, open a long position.
2. In the same case, if the hourly timeframe candlestick touches the level S0.5, then a short position is opened. At the same time, there is no need to wait until the candle closes, the deal is opened upon touch.
3. After opening a position, a stop loss order is placed, limiting possible losses. The size of the order is about 20-50 points, which is determined based on the individual preferences of the player.
4. Potential profit is protected by placing a take profit order. This order is placed either at R2 or S2, depending on the direction of the deal.
5. In the case when the price reaches the R1 or S1 levels, we close half of the position, thereby minimizing the likelihood of potential risks. In this case, the stop loss order is transferred to the level at which the transaction was opened, that is, to the breakeven zone.
