Hi all,
Hope your trading day was a good one, and more to come. As I live in Australia, the markets tend to be somewhat slow during my daytime hours, and so I have a little time to fiddle around with different things. Today I thought I would test out the following statement in regards to pivot points:
"If price opens the day above the daily pivot, the bias should be for long trades, if it is below, then look for shorts".
It is granted a little bit of a general statement, and I have taken a simplified interpretation of it, however one that is seen just about everywhere when pivot points are explained. It seemed an easy thing to program into Metatraders backtester, so, after downloading the latest data from Alpari since 2004, I ran a backtest with the following criteria:
Hope your trading day was a good one, and more to come. As I live in Australia, the markets tend to be somewhat slow during my daytime hours, and so I have a little time to fiddle around with different things. Today I thought I would test out the following statement in regards to pivot points:
"If price opens the day above the daily pivot, the bias should be for long trades, if it is below, then look for shorts".
It is granted a little bit of a general statement, and I have taken a simplified interpretation of it, however one that is seen just about everywhere when pivot points are explained. It seemed an easy thing to program into Metatraders backtester, so, after downloading the latest data from Alpari since 2004, I ran a backtest with the following criteria:
- If price opened above the pivot point, we enter long, going for R1, with a stop at the daily pivot. The reverse applied for short trades, where we go for S1, with a stop at the daily pivot.
- We enter with one standard lot, and close it on the opening of the following day if it is still open.
- Stop is placed one pip above or below the pivot depending on the trade direction (spread is taken into account).
- Pivot points taken off the Alpari demo feed and timezone.
Attached are the results for cable, the yen and the eur/yen cross, of course there is talk about the accuracy of MT4's backtester, for a simple system like this one however, it is fairly accurate. I manually verified 6 months of the results on the charts also for each pair. Interesting indeed. What do we think?
An average of around 30-35% success rate is hardly spectacular. Like I said it is a simplified view of the above statement, but a view many beginners would certainly take. Thought it might have been of some interest.
Attached File(s)
Pivot_EURJPY.zip
23 KB
|
763 downloads
Pivot_GBPUSD.zip
16 KB
|
647 downloads
Pivot_USDJPY.zip
24 KB
|
447 downloads
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