Hi all,

Here is an indicator that could be particularly useful for day traders. I found this idea on a website, obviously not well-known because I can not find it anymore.

This indicator works like pivot points, but it is more simple.

As a reminder, the pivot point is calculated as follows : average between the high of the day before, the low of the day before and the close of yesterday.

I have some problems with the calculation of the pivot point : the closing clearly depends on the closing time of your broker, and also the time zone.

Indeed, according to your broker:

– if you trade for example a CFD on France 40, you will have candles from 00H to 00H with some brokers like IG, or from 08H to 22H with some other brokers, etc.

– if you trade forex, candles can go from 23H to 23H, or from 00H to 00H : they will not be quite the same, so the calculation of the pivot points will not be the same.

Here, this indicator will clearly get rid of this problem, since it will only consider the highest and the lowest of the previous days.

Here’s what this indicator shows:

– a GREEN line for the average of the highest and lowest of the previous day

– a BLUE line for the average of the highest and the lowest of the last 3 days

– a RED line for the average of the highest and the lowest of the last 5 days

What is the purpose of this indicator ?

– It allows to have a visualization of the current momentum : as for the pivot points, the position of the prices with respect this set of levels (which can almost be considered as a kind of pivot points) makes it possible to visualize the trend

– It allows to consider entries for « long » trades (break of the highest line), or for « short » trades (break of the lowest line)

You are free to set the rules of your strategy, such as :

– stop loss (eg at the opposite line / precise number of points)

– take profit (number of points / last higher or lower / stop follower)

etc.

Personally, I didn’t yet dig the question more than that ; but…

– I think this simple approach must be effective, also limiting the risk of overtrading, and could serve as a basis for an effective day trading strategy.

– I propose you to try to use this strategy, to test different rules, and to communicate to me the results

So, together we could develop an effective day trading strategy, shared by all.

Best regards and Happy trading

Here is the code :

// MID-LEVEL 1 DAY : mid1day

mid1day = (DHigh(1) + DLow(1) ) / 2

// MID-LEVEL 3 DAYS : mid3day

Newhigh = 0
For i = 1 to 3 do
 IF Dhigh(i) > Newhigh THEN
  Newhigh = Dhigh(i)
 ENDIF
NEXT

Newlow = 1000000000000 // = valeur infinie
For i = 1 to 3 do
 IF Dlow(i) < Newlow THEN
  Newlow= Dlow(i)
 ENDIF
NEXT

mid3day = (Newhigh + Newlow) /2

// MID-LEVEL 5 DAYS : mid5day

Newhigh = 0
For i = 1 to 5 do
 IF Dhigh(i) > Newhigh THEN
  Newhigh = Dhigh(i)
 ENDIF
NEXT

Newlow = 1000000000000
For i = 1 to 5 do
 IF Dlow(i) < Newlow THEN
  Newlow= Dlow(i)
 ENDIF
NEXT

mid5day = (Newhigh + Newlow) /2


RETURN mid1day coloured(0,100,0), mid3day coloured(0,0,255), mid5day coloured(255,0,0)