Pivot Point Discussion

[brownsfan019]

I realize there's a few threads floating on TL about pivot points, but thought we could discuss a few here in a more recent look.

Here's my consideration of pivots and I wanted some feedback. First, I should preface by saying that my intention at this time is to consider them for exit purposes and only exits at this time. As I've mentioned many times, exits continue to be my weakness and for whatever reason, I've been spending some time at mypivots.com watching these levels.

So in terms of exiting a trade, I am looking at using the pivot levels as possible profit target(s) vs. a fixed target, trailer, etc. My use of late has been to enter trades as I normally do and then reference the nearest pivot point and use the numbers from http://www.mypivots.com/dn/?symbol=41 I believe that site is recommended here and I think that's where I learned about it.

The idea at this point is to watch as price moves towards a pivot after a trade in my direction and watch price closely as it nears the pivot level. When price approaches the pivot level, look for a reason to exit if the level is holding well.

That's about it.

I'll try to get some examples up later if there's time, but I wanted to see what kind of feedback I could get from traders using the pivots. I mainly trade the ES.

Some questions if I may:

Have you found over time that these levels are respected on the ES?

How about other markets?

Is the mypivots site a good reference? Are the 'classic' numbers the best to use?

[Soultrader]

I have found pivots to work in the YM (not sure about the ES) but absolutely useless in the Nikkei.

The only reason why it works is because floor traders still use them and electronic traders have picked it up as a handy tool to determine S&R. Other than that, it makes absolutely no sense to determine S&R by a simple mathematical equation.

For fixed targets, I use other significant levels such as high/low, high volume node, value high/low, etc...

[brownsfan019]

	Quote:	Soultrader
	I have found pivots to work in the YM (not sure about the ES) but absolutely useless in the Nikkei. The only reason why it works is because floor traders still use them and electronic traders have picked it up as a handy tool to determine S&R. Other than that, it makes absolutely no sense to determine S&R by a simple mathematical equation. For fixed targets, I use other significant levels such as high/low, high volume node, value high/low, etc...

Maybe the better question James is - what are your preferred methods for exiting a trade?

[mcichocki_]

I'll take it one step further, James where do I send the check so you can exit my trades for me.

[Soultrader]

	Quote:	brownsfan019
	Maybe the better question James is - what are your preferred methods for exiting a trade?

This is probably going to be a vague answer but my exits are done off tape.

First I have a target point in mind where I look to scale out half. This is automatic. Previous day high/low, POC, VAH, VAL are all good target points. However, with futures a rotation puts the odds in your favor significantly compared to momentum based breakout strategies. (yes I have ben burnt many times playing breakouts) Therefore, I have a fixed target based on the tendency for price to move by a certain amount before profit taking or retracements. This is different across all markets. For example, I expect the Nikkei to move by at least 4-5 ticks upon entry. Hence, this is my first target point where I scale out half automatically.

If price can not meet this target and meets resistance off the tape I will exit immediately. Second half is discretionary based on tape. If price meets resistance but I am seeing buying interest step right back in on the bid, I will hold my second half. If buying interest is not sufficient to take out the ask, (sellers keep stepping on the ask) I will exit right as the bid gets thin. I want to make sure to be able to exit as the bid instead of waiting for the bid to become the ask. This is because the tick size on the big Nikkei is big. Now, this observation and technique is only valid when bid/ask is thick and tick value is big. Might be a good way to determine selling and buying pressure on the S&P but not the mini Dow.

The trick is to understand how to identify support and resistance levels. What are significant levels? I think new traders struggle to understand this basic analysis method. These sort of bid/ask action doesnt take place at random levels but key levels. What makes traders attracted to these levels? Why are these levels so important? etc...

[brownsfan019]

James,
Regarding the market profile numbers - poc, etc - is there a good website or two that you recommend that has this info like mypivots does with pivots?

[Blu-Ray]

	Quote:	brownsfan019
	James, Regarding the market profile numbers - poc, etc - is there a good website or two that you recommend that has this info like mypivots does with pivots?

I'll jump in with the answer here.

try this : http://www.mypivots.com/forum/topic....4&whichpage=17

Hope this helps

Blu-Ray

[brownsfan019]

	Quote:	Blu-Ray
	I'll jump in with the answer here. try this : http://www.mypivots.com/forum/topic....4&whichpage=17 Hope this helps Blu-Ray

Thanks Blu!

Question - is there a way for me to calculate these numbers myself to verify and/or have them in case this person doesn't post them on the forum? I don't like relying 100% on a forum for the numbers.

Also - are there other site(s) that you know of that have this listed as well for backup?

Thanks.

[Blu-Ray]

	Quote:	brownsfan019
	Thanks Blu! Question - is there a way for me to calculate these numbers myself to verify and/or have them in case this person doesn't post them on the forum? I don't like relying 100% on a forum for the numbers. Also - are there other site(s) that you know of that have this listed as well for backup? Thanks.

I think the person who posts in the forum is the owner who also posts the pivot no's. From my experience, it always up to date.

However, I also downloaded this from post 19 by Ryker, its MP for Excel, but you have to put in the 30 min data, unless your platform can do it.

http://www.traderslaboratory.com/for...el-1306-2.html

As for any other sites, I don't use any other, unless someone else can help out there.


Hope this helps

Blu-Ray

[Soultrader]

	Quote:	brownsfan019
	Thanks Blu! Question - is there a way for me to calculate these numbers myself to verify and/or have them in case this person doesn't post them on the forum? I don't like relying 100% on a forum for the numbers. Also - are there other site(s) that you know of that have this listed as well for backup? Thanks.

I dont have access to a market profile charting package with the prop desk so I draw them manually on excel and calculate the volume at price. Then I just take the most volume price level and reorder them in order to get 70% of volume, hence value area. I do this twice a day, one after the morning session and one after the afternoon.

I do not recommend this procedure as it is time consuming so best to pay for a third party market profile vendor. I have thoroughly searched the net for any value area numbers available but the only site that has it is the link provided by Blu. Im sure there is a way to program your excel and connect it with your current data feed vendor in order to get these values.