How I use pivot point clusters

[ezduzzit]

Soul: I agree with Linda's comments about "mechanical systems" but to me that is not the same thing as discretionary trading using indicators (whether they are lagging such as MACD, MAs, etc. or leading such as pivots and Fibonacci, etc.), trendlines, channels and set-ups and instead represents more the automated or blackbox type of systems, in which case the stats prove her comments as spot on.

More importantly, my earlier comments regarding the value of indicators was only referring to using them as competitive info to know where the masses would likely jump in and out rather than depending directly upon them for your own entries and exits. I suspect I did not make that as clear as it should have been.

Happy Trading :-)

[luke24.5]

	Quote:	ezduzzit
	I am a little surprised to hear that you could not find a pivot tool as the video on Forex at that site clearly shows one in use on their charts.

I didn't mean they don't have pivot tools. It's just that in the two days I watched they didn't point out any actual pivots. On the third day, the statistical range bars worked decently. Also the breakpoint charts that you use to watch internals are worthwhile. Still got a couple of days to watch before I make up my mind.

[ezduzzit]

Ahh. .ok now I get you. But their pivot tool should start out automatically with the floor pivots or whatever generated by OHLC of the prior day. Were you instead looking for variable pivots that readjust throughout the day based upon a time parameter you select? Good to hear some of the other stuff is working out ok there.

[luke24.5]

They've got all the standard pivots, and mid points and probablility bands, etc. But they really are just math based probablilities instead of actually pinpointing where supply or demand rests that should slow the market.

I don't like a lot of clutter on my charts.

[Soultrader]

I enjoy trading discretionary but with a systematic approach. I have developed setups with rules but I still decide whether to take the setups depending on market internals and tape.

I am not fully familiar with how system traders take their trades... do they take every signal regardless of market conditions?

[ezduzzit]

Well Soul, I frankly can stake no claim to having the final or definitive answer as between discretionary versus pure systematic trading.

Your comments about using market internals in your own systematic rules based discretionary trading exactly mirror those propounded by John Carter as he answered a question to a reader at his site about his always in the market, simple strategy for trading the mini Dow. He admitted he avoids the lunch hour periods and also utilizes market internals and order flow to further filter trades, thus turning what seemed to be a simple always in the market approach into a highly discretionary method.

Having watched many traders trade from free trials in their subscription based rooms, I have further noted they often operate outside the rules of their system or method. It often comes down to their very personal "feel" for what is happening in the market at a given moment, a feel that only comes from thousands of individual hours of trading such markets.

If someone is taking all signals, regardless of market condition then pure automation would seem advisable. However, I have yet to hear of an automated system that consistently results in an acceptable level of profits over time without excessive drawdowns that most would find unacceptable.

If such a system really did work and generated an acceptable level of profits that could be scaled, then I strongly doubt that anyone would ever be foolish enough to sell it. If they did, only the biggest players could ever afford it. Even so, any meaningful expansion of its use would soon cancel out any "edge" it might have initially conferred upon its first users.

My own limited experience suggests that discretionary trading of a very simple and well defined plan, taking note of market internals and order flow for additional filtering (in order to keep even a small "edge" in this game of probabilities) is probably the right way to go. I might further suggest that this simple plan will have to undergo fairly constant change if one is to remain successful in the markets over any extended period of time as they are always changing.

I happen to think that any "edge" that comes about through the use of someone else's off-the-shelf system that a trader has not personalized through hard work, discovery and adaptation is likely doomed to fail. I think it has always been so and is likely to remain that way for the forseeable future.

I am equally sure there are those who strongly disagree and feel that no daytrader can long succeed without removing their emotions from the trading arena through use of a pure systematic approach, whether automated or not. Frankly, live trading results over time with real money is the only thing that has ever mattered, regardless of any personal opinions I or others might be happy to toss out here for entertainment.

All in all, I think trading the markets will usually prove to be one of the hardest ways to "easy money" ever attempted.

Happy Trading!

[Soultrader]

I have taken the free trial of John Carter and Hubert. I found it interesting that both traders are successful in their methods but do not necessarily share the same style. Carter uses more indicators and pivots than Hubert. Hubert relies more on market internals and tape. I always wondered why both traders would not incorporate each others methodology into their style of trading. Hubert tends to explain market reversals based on market internals. But as a market profile and pivot based trader, my analysis shows that the reversal took place at a key pivot line.

I really love reading your posts ezduzzit Thanks for this.

I started off as a pivot based trader until I applied market profile into my trading which blew my mind. I always been interested in pivot point traders and when I ran into Carters methodology I found it useful since it fit my style of trading. Eventually I improved on market internals by studying Huberts methodology. I think a trader can gain an edge by applying different methodologies and taking what fits his style of trading.

	Quote:
	All in all, I think trading the markets will usually prove to be one of the hardest ways to "easy money" ever attempted.

Amen.

[Maverick0325]

Soul,

Where can i find the floor trader pivots? I use ESignal.

[Soultrader]

	Quote:	Maverick0325
	Soul, Where can i find the floor trader pivots? I use ESignal.

Not sure about esignal as I dont use it but you can use our pivot point calculator instead: http://www.traderslaboratory.com/forums/calc.html

[Maverick0325]

which 'style' of pivots are considered the FLOOR TRADER PIVOTS?