How to use the strategy on the “CyberBot Project” products
topic#1: Pivot Points Method, Support and Resistance Strategy with Buy Limit and Sell Limit Orders
The “CyberBot Project” product represents one of the most advanced offerings available for future trading endeavors. With its “out of the box” capabilities, this product not only functions as an automated Trading Robot but is also equipped with a sophisticated signal analysis feature and a manual trading assistant. This allows traders, including those who are novices, to operate with the proficiency of seasoned professionals. Users can effortlessly drag and drop to open or modify numerous positions across more than eight selected favorite currency pairs, ensuring a practical, functional, rapid, and precise trading experience.
The product has been rigorously tested for application with the Pivot Points Method and the Support and Resistance Strategy. By placing limit orders at level three and a take profit (TP) at a minimum of level two, this tool proves invaluable for managing multiple orders daily. However, it is essential to possess additional skills, including a foundational understanding of the market, when determining stop loss (SL) settings and placing supplementary orders at a distance greater than level three to achieve consistent substantial gains.
[What you need to know before buying/renting] As part of our project, we provide free product tools for training with virtual accounts before using real accounts. If you get used to using it and feel the benefits, your success is in your hands!
Attention: For all Metatrader 4 platform products, equipped with the \Indicators\“TIMING oscillator.ex4“ [free download]. Just activate it for the first time, then it will be activated automatically when the main product is running!
Please follow the general guidance provided by GPT4o as a reference :
Here’s a detailed description and execution strategy for derivative trading using Pivot Points, Support, and Resistance, based on technical analysis, geared toward advanced traders:
Advanced Derivative Trading Strategy Using Pivot Points, Support, and Resistance
Overview
In advanced derivative trading, using pivot points, support, and resistance levels is essential for identifying high-probability price levels and potential market reversals or continuations. These key levels serve as the basis for developing strategies that maximize risk/reward ratios. Expert traders utilize a combination of these technical indicators alongside other tools to refine entry and exit strategies.
Pivot Points: Key Concept
Pivot points are a series of calculated levels derived from the previous day’s high, low, and close prices. These levels act as a reference for potential turning points or areas of price action momentum. Pivot points are widely used in intraday trading to predict market sentiment, momentum, and likely price directions.
The basic pivot point (PP) is the central level, with subsequent levels defined as support and resistance zones:
- PP (Pivot Point) = (High + Low + Close) / 3
- S1 (Support 1) = 2 * PP – High
- S2 (Support 2) = PP – (High – Low)
- S3 (Support 3) = Low – 2 * (High – PP)
- R1 (Resistance 1) = 2 * PP – Low
- R2 (Resistance 2) = PP + (High – Low)
- R3 (Resistance 3) = High + 2 * (PP – Low)
Support and Resistance: Key Concept
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Support refers to price levels where demand is thought to be strong enough to prevent the price from falling further. It represents a “floor” where the market may reverse or consolidate.
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Resistance refers to price levels where selling pressure may be strong enough to prevent the price from rising higher. It represents a “ceiling” where the market might reverse or consolidate again.
Strategic Application in Derivative Trading
Derivative trading involves contracts whose value is derived from the performance of an underlying asset (like futures, options, CFDs). The use of pivot points, support, and resistance becomes even more critical due to the amplified risk/reward profile of derivatives.
1. Identifying Market Conditions Using Pivot Points
- Bullish Trend Confirmation: If the price is trading above the pivot point (PP), the market is generally in an uptrend. R1, R2, and R3 become potential targets for long positions.
- Bearish Trend Confirmation: If the price is trading below the pivot point (PP), the market is in a downtrend. S1, S2, and S3 become targets for short positions.
- Range-Bound Markets: When the price is oscillating between support (S1, S2) and resistance (R1, R2), traders can use these levels to execute range-bound strategies, buying at support and selling at resistance.
2. Support and Resistance Breakouts
- Breakout Strategy: If the price breaks above resistance (R1, R2, or R3) or below support (S1, S2, or S3), it suggests strong momentum in the direction of the breakout.
- Confirmation with Volume: A breakout is considered more reliable when confirmed by higher-than-average trading volume.
- Pullback to Support/Resistance: After a breakout, traders often wait for a pullback to retest the broken level as a new support or resistance before entering the trade.
3. Pivot Point Confluence Strategy
- Multiple Time Frame Analysis: Combine pivot points from different timeframes (e.g., daily, 4-hour, and 1-hour) to identify strong support/resistance confluence areas. For instance, if daily R1 and 4-hour R2 align, the level becomes more significant.
- Price Action at Pivot Levels: Wait for price action signals (e.g., candlestick patterns, pin bars, engulfing candles) at critical support/resistance levels to confirm the trade direction.
4. Risk Management Using Support and Resistance
- Stop Loss Placement:
- For long trades: Place stop loss just below the nearest support level.
- For short trades: Place stop loss just above the nearest resistance level.
- Take Profit Levels: Target the next significant support or resistance level for take-profit orders. For example, in a bullish trend, if price breaks R1, target R2 as the next profit-taking level.
5. Advanced Strategy: Fibonacci Retracements with Pivot Points
- Combining Pivot Points with Fibonacci: Use Fibonacci retracement levels (23.6%, 38.2%, 50%, 61.8%) in conjunction with pivot points to enhance the precision of support and resistance zones.
- Example: If a strong trend is in place, wait for a pullback to a key Fibonacci level aligned with a pivot point. For example, if a retracement meets the 61.8% Fibonacci level at the S1 support, it may be a strong signal for a long trade.
Execution of Advanced Trading Strategy
Step-by-Step Execution:
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Identify Market Trend:
- Determine if the market is bullish or bearish by comparing the current price to the pivot point. If the price is above the pivot, the market is likely bullish; below the pivot suggests a bearish market.
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Set Entry Levels:
- For long trades, enter when the price breaks above R1 (if confirmed by volume and price action signals). If the price pulls back to PP or S1 and forms a reversal pattern, that can be an additional entry signal.
- For short trades, enter when the price breaks below S1 or S2, or after a pullback to a resistance level (e.g., R1 or R2).
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Use Multi-Timeframe Analysis:
- Look for alignment of pivot levels and support/resistance zones on different time frames (e.g., daily and 4-hour charts) to increase the probability of success.
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Set Stop Losses and Take Profits:
- Place stop-loss orders below the nearest support for long trades and above the nearest resistance for short trades.
- Set take-profit levels at R1, R2, or R3 (for long positions) or S1, S2, or S3 (for short positions), depending on your risk/reward ratio.
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Risk Management:
- Only risk a small percentage of your account balance per trade (e.g., 1-2%). Use trailing stops as the market moves in your favor to lock in profits while allowing the trade to run.
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Monitor Price Action and Adjust:
- Monitor price action as it approaches key support/resistance levels. Be ready to adjust your stop loss, take profit, or even exit early if the market shows signs of reversal.
Conclusion
Advanced traders use pivot points, support, and resistance as foundational elements in derivative trading. By combining these techniques with other technical indicators, such as Fibonacci retracements, volume analysis, and multi-timeframe strategies, traders can increase their accuracy and improve their chances of success. Consistent risk management, clear entry/exit strategies, and a strong understanding of market psychology are all critical in executing this advanced strategy effectively.
