Pivot Point SuperTrend [Backtest]

This trading strategy uses a combination of pivot points to determine significant past highs and lows, then applies an ATR-based (Average True Range) SuperTrend as a trailing stop to generate buy or sell signals. It identifies trends and utilizes a pivot-based moving average to smooth out the signals. Conditions for partial profit taking and an option to trade only long positions are included.

To trade this strategy manually on TradingView:

• Set the Pivot Point Period, e.g., 2 bars for calculation.
• Use the ATR to determine the SuperTrend line by multiplying the ATR value (with a period of 10 or as desired) by a factor (default of 3 in the script).
• Identify pivot highs and lows within your selected period and plot them on the chart. These points help to determine the trend.
• Calculate the trailing SuperTrend line. If the price is above the line and the trend is positive, it's a bullish signal (buy). If the price is below the line and the trend is negative, it's a bearish signal (sell).
• If your strategy allows, plot a center line as a simple moving average of the pivot points.
• Enter a long position when the trend flips from negative to positive, which is observed when the closing price crosses from below the SuperTrend line to above it.
• Enter a short position when the trend flips from positive to negative, observed when the closing price crosses from above the SuperTrend line to below it, provided your strategy is not set to ‘only long’.
• Consider partial profit-taking when the price reaches a predetermined profit target, such as 1% above the average entry price, and close 50% of the position if the conditions align with the use of the center line (only when enabled).
• Exit the trade completely when the trend changes, indicated by the price crossing the SuperTrend line to the opposite side from your entry.

Improving the Pivot Point SuperTrend strategy for manual trading on TradingView involves refining the entry, exit, and risk management parameters based on market conditions and personal risk tolerance. Here are steps to fine-tune the strategy:

• Optimize Pivot Point Settings: Experiment with different pivot point periods to suit the timeframe you are trading on. A higher period might give fewer, but more reliable signals, while a lower period can provide more opportunities with potentially increased noise.
• Refine ATR Factor: Adjust the ATR Factor used in the SuperTrend calculation to control the sensitivity of the trend line. Increasing the factor will provide a more conservative approach by requiring a more significant price change to alter the trend, while decreasing it may offer more responsive entries and exits.
• Combine with Confirming Indicators: Integrate other technical indicators such as RSI, MACD, or Stochastic to confirm the signals provided by the SuperTrend. This might help in avoiding false signals and entering trades with a higher probability of success.
• Price Action Confirmation: Use price action patterns such as candlestick formations or support/resistance levels for additional entry and exit confirmations.
• Money Management Adjustments: Implement a dynamic risk management system that adjusts position size based on the volatility of the asset being traded and the current balance of your trading account.
• Partial Profits and Trailing Stops: Take partial profits at predetermined targets while employing a trailing stop for the remainder of the position. This can help in securing profits while still allowing the trade to run during strong trends.
• Backtesting: Manually backtest the improved strategy using historical data to gauge effectiveness and tweak parameters before implementing it in live trading.
• Journaling and Review: Maintain a detailed trading journal documenting all trades taken with the strategy. Periodically review the journal to identify patterns in successful trades and potential areas for improvement.
• Pivot Point Center Line Role: Study the role of the center line in closing entries and consider making it a moving average of pivot highs and lows to potentially have a dynamic take profit/stop loss level.

By systematically adjusting and testing each of these elements, a trader can refine their approach to the Pivot Point SuperTrend strategy and tailor it to their specific trading style, objectives, and market conditions.

The Pivot Point SuperTrend strategy is tailored for traders who prefer technical analysis and desire a systematic approach to trading. This strategy is particularly well-suited for:

• Intraday and Swing Traders: Its reliance on pivot points makes it adaptable for both intraday and swing trading timetables, capturing short-term and medium-term market movements.
• Trend Followers: Traders who thrive on following the prevailing market trend will find the ATR-based SuperTrend component useful for staying with the trend until there's a definitive shift.
• Risk-Averse Traders: The option to exit half of a position when certain profit targets are met appeals to those looking to minimize risk and secure gains proactively.
• Systematic Traders: It provides clear entry and exit signals which can easily be codified into a trading system, minimizing the emotional aspect of trading decision-making.

This strategy is best employed by those who are comfortable with technical setups and are looking for a structured trading framework.

• Strategy Essence: Utilizes pivot points and ATR for trend identification and trailing stop-loss application.
• Signal Generation: Produces buy/sell signals based on trend changes with an option for early partial exits.
• Preferred Users: Intraday and swing traders, trend followers, and those seeking systematic risk management.
• Manual Application: Trade entry and exit based on pivot points ATR factor and trend reversals discernible on charts.
• Automation Potential: Can be coded for automated trading or set alerts for trade signal notifications.
• Improvement Actions: Integrate additional technical indicators for signal confirmation and backtest to refine parameters.
• Risk Management: Apply dynamic position sizing based on volatility and account size, with partial profit-taking strategies.
• Journey Documentation: Keep a trading journal for strategy performance analysis and iterative improvements.