Good morning, and thanks for the replies.
It would appear that pivots play a key role in the way I trade.
I trade mainly (almost exclusively) the
DAX using the Profitunity (Chaos) Trading System by Bill Williams (for those of you not familiar with this system one of the things that it relies heavily on are fractals which basically indicate a change in direction and support and / or resistance).
Anyway - I started to notice that every time a fractal was hit and the corresponding stop order was triggered the price would almost immediately retract and it could be days before the price then moved past the fractal position into a profit and this was getting to me. I started placing orders further away from the fractals but then you miss too much of a move.
Having read John F. Carters book I decided to draw the pivot levels on my
DAX charts last week and I could not believe my eyes at the time: every single time this happened it was at the exact point where a pivot line was drawn (give or take one
DAX point - it is that accurate - and I went back weeks to check)!
Anyway - having solved THAT problem - for some or the other reason - I was short on the EUR/USD on Friday - and I was really hoping that it would retrace to Friday's daily pivot level some time today (Monday) - but right now it's still moving up - so I've taken the loss - and will stick to what I know! All I can say is that thank goodness those were not
DAX positions - the
DAX can wipe you out in a heartbeat if you're not careful - but when it moves - you're in the $$$ (I ALWAYS use stops on the
DAX)!
What is not clear in the book is that if an instrument is expected to hit either its pivot point or R1/R2/S1/S2 on the daily chart - would it be a reasonable assumption to make that this would apply to the weekly and monthly charts as well i.e. on a weekly basis may hit the previous weeks pivot levels during the current week and on a monthly basis may hit the previous months pivot levels during the current month or are pivots only valid on a day to day basis?
I have a hard time with fibo levels - I never know which points to take and I have read so much conflicting instruction as to where to start and where to stop - so the end result is that they end up being meaningless to me but I'll give it another bash. Put it this way - if I draw the pivots first then I can gauge which would be the right points to take for the fibo levels (although that's like 'putting the cart before the horse' as it were I would imagine)!
Regards,
Dale.