2 MA Pivot Forex Trading Strategy aims to make use of bounces off of the pivot points by using a crossover strategy as a confirmation of the bounce.
Prior to an actual reversal off a pivot point, price could stall or sharply reverse off of it. It could have a reversal pattern, whether it be a pin bar, engulfing, or whatever pattern around it. But not all traders are proficient or confident in using these patterns. Traders could make use of the fast moving averages as a confirmation of the reversal. Also, wait for the actual crossover of the moving averages and take the trade accordingly.
Since crossovers are a bit lagging, it is also important to take note of the space from the entry and the next hurdle based on the pivot point levels. If the reward-risk ratio based on the levels is higher than 1:1, then take the trade.
Another advantage of using moving average crossovers is that sometimes these hurdles could be broken out of. By using moving average crossovers as an exit strategy, traders can squeeze more pips out of the trade. Also, you have the flexibility of exiting the trade if in case price doesn’t quite reach the next pivot point level.
Timeframe: 1-hour chart
Currency Pair: any
Trading Session: any
How to trade with 2 MA Pivot Forex Trading Strategy?
Buy (Long) Trade Setup Rules
Entry
- Price should be above the Pivot Point (PP) or any Support level (S1, S2 or S3)
- Price should touch the Pivot Point (PP) or Support level (S1, S2 or S3)
- Price should bounce off it and cause the moving averages to crossover and print an arrow pointing up
- Enter at the close of the candle with the arrow pointing up
Stop Loss
- Set the stop loss a few pips below the low of the candle
Exit
- Close the trade as the moving averages crossover signaling the end of the trend
Sell (Short) Trade Setup Rules
Entry
- Price should be below the Pivot Point (PP) or any Resistance level (R1, R2 or R3)
- Price should touch the Pivot Point (PP) or Resistance level (R1, R2 or R3)
- Price should bounce off it and cause the moving averages to crossover and print an arrow pointing down
- Enter at the close of the candle with the arrow pointing down
Stop Loss
- Set the stop loss a few pips above the high of the candle
Exit
- Close the trade as the moving averages crossover signaling the end of the trend
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the bottom of the post.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select “2 MA Pivot Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.
