DISCUSSION 1:THE EOD REVERSAL
This one's simple,a latter modification to the 60min Flow Method.We basically reverse to our original positions if the SAR is triggerred and then the day closes back to its pivots from where they broke down.Taking an example,we are in 2lots+2+2=6lots of NF,in an uptrend,and then our latest pivot lows get broken down and we reverse with 2 lots………..let us say that after this breakdown,price then reverses direction back to its breakdown point(which is the pivot),we get out of our 2 lots short and get back in into our 6lots long.This decision is made in the last 2-3 mins of trade.
We basically act as if this breakdown did not happen……..and take the few points losses sustained.Price can still gap up,gap down or start even tomorrow.And we will trigger our short accordingly if need be or add to our longs if need be.Basically we expect a significant move on a breakdown of pivots.A limpish move down and closing back to its lows triggers our EOD Reversals and we revert to longs.
When we have a pivot and we are long 6 lots as in the example above………..and the following day,we get a gap down,we reverse as always below the first bar.But an EOD Reversal is triggerred only once the pivot low area is crossed.And if that does not happen,we remain short.
Let us say that we are long 6lots,and we get an add opportunity…..We buy on a breakout of recent pivot highs and then price falls back to the area of breakdown……This means nothing,we are now long 8lots with SAR at recent pivot lows.
The EOD Reversal is therefore a strategy that we employ only on a reversal of trend and its seeming failure.And the point that we are eyeing is that pivot that price broke down from.
All the best!
Saint