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Soultrader

S3 to R3: Two important pivots

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Many professionals know the important of the S3 and R3 pivot. Prices will tend to stay within this range. Why? It just does.

 

The S3 and R3 pivot are terrific pivot points to fade. I will take them 100% of the time. Of course trading is a game of probabilities but fading these two pivots offer a high probability trading opportunity. Price will remain between these two pivots 80% - 85% of the time

 

The chart picture tells it all.

082806R3.jpg.267f2f30eb0022dff8ca9017a7058359.jpg

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Many professionals know the important of the S3 and R3 pivot. Prices will tend to stay within this range. Why? It just does.

 

The S3 and R3 pivot are terrific pivot points to fade. I will take them 100% of the time. Of course trading is a game of probabilities but fading these two pivots offer a high probability trading opportunity. Price will remain between these two pivots 80% - 85% of the time

 

The chart picture tells it all.

 

 

James,

 

What else do you look at at these points? Divergence of MACD for example?

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Hey Doc,

 

I dont use any indicators for my trading. I use a MP chart, tape, and a bunch of market internal tools: TICK, TRIN, PC ratio, and premium. I'm a simple S&R trader that identifies key levels using market profile, pivot points, and pivot clusters. I then use the market internal tools to judge if price is going to hold or fold and use the tape to time my entries.

 

Nothing fancy here... I prefer to keep it simple.

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Hey Doc,

 

I dont use any indicators for my trading. I use a MP chart, tape, and a bunch of market internal tools: TICK, TRIN, PC ratio, and premium. I'm a simple S&R trader that identifies key levels using market profile, pivot points, and pivot clusters. I then use the market internal tools to judge if price is going to hold or fold and use the tape to time my entries.

 

Nothing fancy here... I prefer to keep it simple.

 

Isn't a divergence simple?

 

Isn't anything you use an indicator? Maybe not a traditional indicator.

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Isn't a divergence simple?

 

Isn't anything you use an indicator? Maybe not a traditional indicator.

 

 

Divergence simple? Can you elaborate on that. I dont use any indicators to trade off like looking for price and indicator divergence, MACD crosses, etc...

 

I use market internals but I like to consider them more of a tool than an indicator. They just help me decide whether to short, long, or stay flat. All my trades are done at S&R levels using price and tape.

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Divergence simple? Can you elaborate on that. I dont use any indicators to trade off like looking for price and indicator divergence, MACD crosses, etc...

 

I use market internals but I like to consider them more of a tool than an indicator. They just help me decide whether to short, long, or stay flat. All my trades are done at S&R levels using price and tape.

 

Soultrader,

Sorry for the late response here but I have thought about your response and it answers my question previously.

Dr.

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Many professionals know the important of the S3 and R3 pivot. Prices will tend to stay within this range. Why? It just does.

 

The S3 and R3 pivot are terrific pivot points to fade. I will take them 100% of the time. Of course trading is a game of probabilities but fading these two pivots offer a high probability trading opportunity. Price will remain between these two pivots 80% - 85% of the time

 

The chart picture tells it all.

 

 

Interesting. Here's my take. First, it should be noted that you do not use the "traditional" S3 and R3 levels. Nor do I.

 

I found the "traditional levels to be a bit far away and the levels produced similar to your way to be too close. Therefore, I use M3 (midpoint of the two) for my S3 and R3 levels.

 

Pivot points are what I call inferred support/resistance. That is, these lines are not generally placed in areas where price was previously supported or resisted. They are based on the mathematical phenomenon of "regression to the mean". That is of course, couple with "self fulfilling prophecy" as so many traders use them. From the perspective, S3 and S4 are key levels; the further one gets from the mean, the likely price is to stall/regress back towards it.

 

Check out the chart below. The black arrows on the 30 min point to two Up-thrusts (VSA term) that occur at R3. These same points can be seen on the 10 min. They are also up-thrusts on the 10. Because the end-game is reading the chart, not all up-thrusts have a small red arrow above. Here, only the second one on the 10 does. An up-thrust is a money making opportunity for the Professional Money. They drive prices up to encourage new longs and to scare out early shorts. Price then closes on or near the low of the bars, which is the direction price is actually headed-lower.

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Thank you pivotprofiler. Yea I should of mentioned that I dont use traditional pivot point formulas.. been using my own for a while now that I tend to forget.

 

Very interesting to see pivot magic with currencies as well. I understand alot of currency traders rely on pivots but am amazed at how some of the pivot point strategies are very similar to the ones I use in the futures market.

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You mention somewhere on the website that weekly pivot points provide strong support/resistance and that's what happened today with YM. The daily s1 and s2 were too close to be of any significance but weekly s1 and s2 were the only support on the way down. Daily s3 never came into play because it was too far down.

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You mention somewhere on the website that weekly pivot points provide strong support/resistance and that's what happened today with YM. The daily s1 and s2 were too close to be of any significance but weekly s1 and s2 were the only support on the way down. Daily s3 never came into play because it was too far down.

 

 

Weekly pivots work nicely at times. Its been working on the ER2 lately as well. But there are also times when the markets pay no respect to it. I tend to like the cluster pivots... my favorite type of S&R based on pivots.

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Hi Soultrader.

Could you please explain more in detail how do you build up cluster pivots?

Weekly pivots these are 5 trading days back or from Monday up to Friday?

Thank you

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Hi Soultrader.

Could you please explain more in detail how do you build up cluster pivots?

Weekly pivots these are 5 trading days back or from Monday up to Friday?

Thank you

 

Yep... update the weekly pivot before every Monday and the monthly before the trading session on the 1st of every month. Clusters are just price levels that line up with each other whether they be pivots, market profile levels, fibs, previous day high/low, overnight S&R, etc....

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