Pivot RSI - A trading strategy using Pivots Rel Strength
This strategy uses a new concept called Relative Strength of Pivots.
The concept emanates from the fact that the market weakness starts from bottom to top when it comes to pivot as against top to bottom in conventional indicators.
It signals long if the daily pivot shows better strength than monthly pivots and short if the daily pivot shows weaker strength than monthly pivots.
The Strength of pivots is defined better if :
a) if relative strength of lower pivots are higher than higher pivots or crosses higher pivots.
b) if relative strength of lower pivots are sloping upwards and is above mid point (50).
This strength of pivots is combined with pivot shift indicator for additional confirmation which means that if pivot shift indicator is sloping upwards and the strength of pivots satisfies the above definition, then the long is signalled.
How to use this in trading?
The best way is to have this indicator along with the following
a) 50 period ema
b) 200 period ema
c) Daily CPR / Weekly pivot / monthly pivot (MUPS indicator preferred - Please refer to the same in public library)
d) Pivot Shift Indicator (IndianPivotBossPivotShiftIndicator - Please refer to the same in public library)
When a long is signalled, ensure that there are no immediate nearby resistances in the form of EMAs or Pivots. Similarly when a short is signalled, ensure that there are no immediate nearby supports in the form of EMAs or Pivots.
In other words when a long is signalled and if there is a nearby resistance, just wait for the resistance to break convincingly before going long and vice versa for shorts.
In general a blue color indicates that the strength of daily pivot is better alongwith a bullish pivotshift which facilitates a possible long and HENCE STRICTLY SHOULD NOT BE ON THE SHORT SIDE.
In general a red color indicates that the strength of daily pivot is better alongwith a bearish pivotshift which facilitates a possible short and HENCE STRICTLY SHOULD NOT BE ON THE LONG SIDE.
Please ensure that you use this with a proper Risk Management and Money Management guidelines.
The concept emanates from the fact that the market weakness starts from bottom to top when it comes to pivot as against top to bottom in conventional indicators.
It signals long if the daily pivot shows better strength than monthly pivots and short if the daily pivot shows weaker strength than monthly pivots.
The Strength of pivots is defined better if :
a) if relative strength of lower pivots are higher than higher pivots or crosses higher pivots.
b) if relative strength of lower pivots are sloping upwards and is above mid point (50).
This strength of pivots is combined with pivot shift indicator for additional confirmation which means that if pivot shift indicator is sloping upwards and the strength of pivots satisfies the above definition, then the long is signalled.
How to use this in trading?
The best way is to have this indicator along with the following
a) 50 period ema
b) 200 period ema
c) Daily CPR / Weekly pivot / monthly pivot (MUPS indicator preferred - Please refer to the same in public library)
d) Pivot Shift Indicator (IndianPivotBossPivotShiftIndicator - Please refer to the same in public library)
When a long is signalled, ensure that there are no immediate nearby resistances in the form of EMAs or Pivots. Similarly when a short is signalled, ensure that there are no immediate nearby supports in the form of EMAs or Pivots.
In other words when a long is signalled and if there is a nearby resistance, just wait for the resistance to break convincingly before going long and vice versa for shorts.
In general a blue color indicates that the strength of daily pivot is better alongwith a bullish pivotshift which facilitates a possible long and HENCE STRICTLY SHOULD NOT BE ON THE SHORT SIDE.
In general a red color indicates that the strength of daily pivot is better alongwith a bearish pivotshift which facilitates a possible short and HENCE STRICTLY SHOULD NOT BE ON THE LONG SIDE.
Please ensure that you use this with a proper Risk Management and Money Management guidelines.
Notes de version:
Added an extra parameter to increase the performance.
Longs will have extra confirmation of current daily pivot rsi above last 9 period rsi.
Similar logic with shorts.
Longs will have extra confirmation of current daily pivot rsi above last 9 period rsi.
Similar logic with shorts.
Notes de version:
A significant improvement inorder to reduce drawdowns and increase profit %.
The signal is applied only when there is an evidence of a trend as per MUPS system (Refer my MUPS strategy for the definition of trend).
The signal is applied only when there is an evidence of a trend as per MUPS system (Refer my MUPS strategy for the definition of trend).
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