[Soultrader]

Pivot points are simple support and resistance points derived mathematically. They originated from floor traders who trade based on these numbers.

The reason why floor traders use them is because they do not have the luxury to trade with monitors and look at every technical indicator in the world. They trade strictly on price and order flow.

I don't believe there is any secrets in trading unless you have developed a super system guaranteed to win. If trading discretionary, like I do, there are no secrets. What I do is nothing fancy. A trader can tell his methods to another trader; but if the trader does not know how to use it correctly he will not profit from it.

There are many methods you can use to obtain support and resistance points. Some use fibonacci levels, fibonacci clusters, moving averages, Gann analysis, etc... I am sure your friends methodology is nothing new. He is just good at applying the methodology into this analysis and trading.

Also.. make sure you never follow anyone's advice blindly. No man on this planet can predict where stock XYZ will be trading in the future. If he claims he can predict prices, he is lying. He can easily go long and reverse as soon as he senses danger. However, unless you are with him 24/7 watching his trades, there is a good chance you will hear new information about his position after the markets have moved against you.

By the way, what methods do you use to obtain support and resistance? Are they working for you?