Trading Strategies Revealed – “Pivots Support & Resistance Breakout” review

Breakout trading strategy “Pivots Support & Resistance Breakout” is designed mainly for Forex and can be used on all currency pairs on any time-frame. Its rules state that:

A trader should place a buy order when price breaks through a resistance level. A sell order should be placed when price breaks through a support level. Support and Resistance levels are based on Pivots indicator.

For our test, we have used a Trailing Stop 30 pips which is launched after a trade has started and is modified each new 1 pip of profit. From our point of view, such approach allows to maximize profit and minimize drawdown. We have run the test for 2010.01.01-2019.07.11 using Control Points modelling on EURUSD-H1, with 1:18 leverage, without reinvestment, assuming spread equals 10 ticks, with starting balance $10,000. These are the main parameters of financial performance, that may allow you to evaluate whether this strategy worth your attention or not:

ROI# of tradesWinning ratioMax. drawdown
363.68%188737.31%57.04%

The following charts may give some possible insights on which filters to apply (time sessions, day of week limitation, trend strength threshold, overbought/oversold conditions, volatility range) to turn this strategy profitable should you decide to use this strategy in your investment portfolio:


Analysis Insights



1. “Pivot Support & Resistance Breakout” trading strategy has produced 36.36% annualized ROI during 2010–2019 years using 1:18 leverage. Maximum drawdown was 57.04%.

2.The most profitable trades were opened at a lower value of ADX when trading “Pivot Support & Resistance Breakout” trading strategy during 2010–2019. ADX shows the power of a trend and lower value of ADX means that the trend has just started. It means that the most profitable breakouts happened at the beginning of the trend.

3. The closer the price was to the upper band, the more profitable sell trades were opened. While the closer the price was to the lower band, the more profitable buy trades were opened on H4 timeframe. This means that the probability that price will reverse and the profitable breakout will happen is higher near the bands. Also, the most profitable trades were opened at a lower bands range when trading “Pivot Support & Resistance Breakout” trading strategy during–2019. Too large distance between Bollinger Bands means that the market is too volatile.

4.Trades that were opened at a too high and too low values of RSI brought more loses when trading “Pivot Support & Resistance Breakout” trading strategy during 2010–2019. While RSI shows the overbought and oversold zones it is reasonable not to buy at a higher value of RSI and not to sell at a lower value.

5. We have analysed data received from a test of “Pivot Support & Resistance Breakout” trading strategy during 2010–2019 years and applied some filters such as ADX, Gator, RSI, Stochastic, Bollinger Bands and others. As a result, the profitability of the strategy has increased from 36.36% up to 95.50% and its drawdown has reduced from 57.04% to 22.56% using leverage 1:18. Reducing the drawdown has allowed us to increase the leverage up to 1:24 and to use optimized stop loss, which in turn, has resulted in annualized ROI increase up to 189.66%!



If you decide to buy an EA, coded in accordance with the strategy and used for the test, or to make any amendments to the original strategy rules – please, feel free to contact us.

Our company specializes on automated trading systems and trading indicators development for the most popular trading platforms, such as MetaTrader 4/5, NinjaTrader 7/8 and cTrader.

If you need your own automated trading software designed based on your individual requirements, make a request for a free consultation with our team of professional programmers and find out the cost and terms of your project development.

More detailed info about our services for particular trading platform you can get at the following pages of our web-site:

MetaTrader 4/5 https://www.nordman-algorithms.com/metatrader-programming
NinjaTrader https://www.nordman-algorithms.com/ninjatrader-programming
cTrader https://www.nordman-algorithms.com/ctrader-programming

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RISK DISCLOSURE

Trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical or Simulated performance results have certain limitations, unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

Please note, that testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.