Pivot reversals

In this section we look at what might be deemed as the counter trades. In general our preference is to be trading with the trend, however there are occasionally opportunities to take counter trend trades which can be very profitable.

The very nature of the forex market with the regular reversals and cyclical nature lends itself to reversal opportunities. What we are generally looking for here is multiple confluence of different technical signals to provide us with higher probability trades. We will not look at all of the possible different indicators that are out there, but will consider a few along with our own Inflection point indicator (based on Power of Three CD’s) which will be offered to members at a reduced rate.

The example below shows where there has been a reaction to both the 4 hour R2 and the 4 hour R3. It was taken from the EURUSD on 3rd March 2016. There was initially some 5 min divergence into the R2 which gave a 15 pip target. Then when it pushed up further there was a fair amount of confluence at this point as the price had already broken the daily R3 and had tested the daily 50sma. It was late in the London session with a new 4 hour pivot due below. It offered a target back to the R2 area of 29 pips.

There are several rules and ideas surrounding this reversal strategy which are of course included on the CD’s. The analysis we have originally carried out within this section looks at the ranges and probability of closing outside the various ranges.