Let's go back to January to illustrate how I trade the weekly and monthly pivots. The chart below shows the GBPJPY from the first week in January of this year. The trading system is very simple (as most of the good things in life are).
The key is to trade the pair to the pivot. In the example above, I traded two sets of stacked trades, one down to the weekly pivot point and one stack down to the monthly pivot point. My stacks are simply one trading unit each 10 pips above the pivots. I stack no more than 20 positions on any pivot trade and I trade two units for the first 10 positions and 1 unit for the second 10 positions. In the above trade, for the weekly pivot, I had 10 two unit orders and 2 one unit orders. For the monthly pivot, I had the full 10 orders for two positions and 10 orders for one unit. Both closed profitably (weekly on Jan. 4 and monthly on Jan. 5) for a total of 1330 pips on the weekly trade and 2650 pips for the monthly pivot trade (the total pips were actually 3864.8 for both trades due to the spread and slippage).The key to any consistent trading system is to find something that reoccurs more often that it does not and to take advantage of it. Look at the pivot trades for the GBPJPY for the last several years and you'll see what I mean. More on this later.
Happy Trading!
