Full Review of the Pivot Point Bear Binary Options trading Strategy
Pivot Point Bear Strategy Review
The Pivot Point Bull Strategy is a forex strategy being applied to binary options. This strategy tries to predict short-term market direction utilizing Pivot Points. This strategy is not reliable and produces numerous losing trades. It is not a recommended strategy for newbies or expert traders of any type.
The Pivot Point Point Bull Strategy: Unreliable and pretty Tricky to deploy
The pivot point strategy is a binary options trading strategy that uses the position of the trading day’s opening candle relative to the pivot point to determine the trade bias for the day and consequently, it enables the trader to predict the direction of the traded asset. The trader first identifies the open of the new trading day which occurs at 2100hrs GMT, then identifies a bullish trend by watching the behavior of the candlesticks relative to the pivot point on the 15 minutes chart.
What Is A Pivot Point?
Pivot Points are a simplified method of short term trend determination. The Pivot Point itself is the average of the previous days closing, high and low price. This level is then considered to be the crucial level for the following days trade. If prices are above the pivot point then the day is considered to have a bullish bias, if prices are below the pivot point the day is thought to have a bearish bias.
How Do You Use The Pivot Point Bull Strategy
The strategy is fairly simple. If the day opens above the pivot point then it is bullish and you can trade. You must wait first for the opening rally to subside and for prices to calm down. The reference point is when the opening price for the day is at least 30 pips from the Pivot Point. The trader waits for a pull back towards the Pivot line before taking a position. The trick is to wait for the pullback candle to bounce on the central pivot point, and then go bullish on the open of the next candle. At this time the system would be signaling a call buying opportunity.
Why does the Pivot Point Bull Strategy Suck?
This strategy only works when the opening price for the day is at least 30 pips from the central pivot point. Anything outside this makes this strategy unreliable. Another reason why the strategy sucks is because it has to be executed by watching the position of the 2100hrs GMT candle on the 15 minute chart of the asset to be traded. If you are in a part of the world where this time meets you during sleeping hours, it would be difficult asking the trader to interrupt his sleep pattern merely to pick this trade. The strategy also makes no efforts to predict potential turning points or resistance levels that could negatively impact the trade. It is also a very short term signal, positions should not have more than 15 minutes to an hour until expiration.
Why the Pivot Point Bull doesn’t Suck
The degree of accuracy of the strategy when the open price for the day falls within the 30 pip window is quite high. If the trader is able to meet the 2100hrs GMT time requirement for monitoring the trade setup, then the chances of success are good if the trade entry setup is met. Furthermore, this strategy can be used to trade the RISE, UP or ABOVE binary options contracts as well as the Touch/No Touch trade. Another sidekick trade setup is for boundary binary options. The trade actually sets up if the open price for the day is beyond the S1 or R1 pivot points. In this situation, the asset is likely to range trade and so can be used to trade the boundary trade type.
Conclusion
The Pivot Point Bull strategy is a tricky system to deploy, and false signals easily occur. Traders must take time to spot the position of the open price candle relative to the pivot point, and only determine when to trade the asset when the pullback candle HAS CLOSED on the pivot point (not when it touches the pivot point). When these rules are obeyed, then the chance of success is increased with this strategy. This strategy could suck, or it may not suck depending on how you play it. I personally don’t plan on using this strategy. The signals are weak and do not take trend or support/resistance into the equation.
Please note that the Pivot Point Bear strategy is the opposite of Pivot Point Bear.
Red Inverted Hammer indicates Bear – Turning Point = 5154
Green inverted Hammer indicates Bull – Turning Point = 5299