New Trader here, Need some help

[awhoa99]

thank you so much, im gonna look into this more this week and ill let you know how it goes. And you just put in the numbers for intraday?? Like I use the high, low, and the close from the previous day in order to create the points for todays use?? is that right?

and from there, what type of chart should i be using? 5 minutes? still a little confused?

[Soultrader]

The pivot points can used for intraday, weekly, and even monthly charts. Simply take the high, low, and close and use the formula to get daily pivots.

It does not matter what time frame charts you use. I usually plot all the daily, weekly, and monthly pivots on my 233 TICK chart. One quick note though.... the basic concept and formulas of pivot points are just starters. In order to use them successfully there are many other information that you need to understand.

For example, in my article of "Advanced Pivot Point Trading" I mention how I use clusters. I also adjust pivots manually after plotting them. I will go over the charts and figure out the significant pivots from the less significant ones. I also use market understanding and market internals with pivots. This gives me an edge instead of just using pivots which alot of people follow.

Also, I trade index futures. Different markets require different strategies so you will need to study the methodology to see if its works or not. Remeber, I do not trade a mechanical system. All trades are done discretionary so you need to have a "feel" of the market language.

[awhoa99]

I notice that in a lot of your posts about pivots, that you use it using certain market indexes. Can you use pivots with particular stocks. What stock react best with these types of pivots. I would guess high volume ones that move a lot??

Also, I do not want to sound like a cynic, but it seems that a lot of traders are tied down and in love with their ideas, which makes it hard to decipher what information is pertinent. I can find tons of traders who love MACD and stochastics and trade simply off that, and then I can find a ton of traders who say that is garbage and that pivots and bollinger bands are the way to go. It seems that they say to take emotion out of trading, but when it comes to the type of trading one does, they in fact use their emotion and become in love with their ideas.

[Soultrader]

	Quote:	awhoa99
	I notice that in a lot of your posts about pivots, that you use it using certain market indexes. Can you use pivots with particular stocks. What stock react best with these types of pivots. I would guess high volume ones that move a lot?? Also, I do not want to sound like a cynic, but it seems that a lot of traders are tied down and in love with their ideas, which makes it hard to decipher what information is pertinent. I can find tons of traders who love MACD and stochastics and trade simply off that, and then I can find a ton of traders who say that is garbage and that pivots and bollinger bands are the way to go. It seems that they say to take emotion out of trading, but when it comes to the type of trading one does, they in fact use their emotion and become in love with their ideas.

I don't think traders are in love with their ideas. This would make them feel like a genious... and in trading the moment you think you know everything is the moment you have become a fool.

Good traders all have a distinct style of trading that they have come up with over their trading career. They have worked hard to develop this style and have tested their methodology and trading setups. Thus, their unique trading style gives them an edge over others. Trading style is like a fingerprint. No two are alike. Good traders have adjusted their styles to fit their personality.

The most important is that you find your style as well and become an expert in it. Too many traders search for the Holy Grail jumping from one methodolog to another without mastering one method. Study from the good traders and take what fits you. Then adjust it accordingly, implement new ideas..... and that becomes your style.

Also, price based traders like myself are not fond of technical indicators. Like the name states, they are indicators. My style of trading is discretionary but with a systematic approach.

Pivots work well in any market. You just have to test it out, take some data, and see if its suitable. Don't rely on them blindly though. Learning market language and internals is important to your trading strategies.

[carter]

awhoa99,

Just because a trader sticks to one methodology does not mean he is trading emotionally. Trading emotionally means not having a strategy or method and relying on feeling. Do not mistake this for intuition. New traders trade emotionally without a plan. If a trader trades strictly of off pivots, this is a plan. Having setups will help eliminate emotionaly trading as long as you follow your rules. You may been confusing the term "emotional trading".

Do you have setups that you follow religiously? Do you have rules that determine your entry and exits?

[awhoa99]

Another quick question regarding pivots, when the price does eventually cross the support or resistance line, how do you know when to enter the position, readin the tape?? Also, what type of stop loss should one use? is this done once again by simply reading the tape. Also, are these day trades usually, meaning holding for a longer portion of the day, or can this be used to scalp??

[Soultrader]

I trade intraday only and I scale out of all my trades. The next line of pivot is a common exit target for many pivot point traders.

The way I time my entries is based on tape reading and market internals. If price reaches a support pivot, but the market internals are pointing down I will not buy at this pivot. There is a good chance the markets will break this pivot and go lower. In this case I will short the retracement back to the pivot.

I do not use pivot points blindly. If a support pivot is right above the previous days low, there is a chance the markets will break the pivot and test the previous days low. Its important to know where all the key levels are to use pivot points successfully.

By market internals, I look at the TICK, TRIN, TIKI, Prem, and PC ratio. This gives me the feel of the markets. You dont want to be shorting at every pivot level in a strong market environment.