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Chapter 15, Part II. How to use Pivot points. Page 8

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Commander in Pips: The reason for that is a growing volatility during breakout, because there are a lot of orders for execution that come around the border and if you place your stop too close – you could be stopped out occasionally and maybe not even stay in once. Here you see that it could be done during WPP breakout (first rectangle) by rearview, but in a real time environment you will not have enough confidence to do it. Also the aggressive way is very sensitive to false breakouts:

    Chart #3 | 60-min EUR/USD and Weekly Pivots

    See – the same as with any support/resistance or rectangles. Applying here the aggressive entry tactic will lead you to loss. Although, I have no doubts that you’re a very smart guy and possibly will move your stop to breakeven during the second breakout. Also, take a look – the market has shown a breakout just due to accomplishment of 1.0 Fib extension target. I just want to keep you up, so that you do not relax too much. Remember, we’ve discussed this already?

    Pipruit: Yes, Sir. I do. If some target stands very close but beyond some level – there is a solid probability of false breakout or piercing of some level.​
    Commander in Pips: Right. Here is the clue, by the way, how you can anticipate the breakout’s nature. If the market has shown breakout, hit the target and continue the move - then possibly this is a real break. If it returns right back – then it just has accomplished a Fib extension target.
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