clam61
92 posts
msg #44042
- Ignore clam61 |
5/22/2006 1:23:56 PM
Hi TRO I have a question.
If a price is above the midpoint, go long. If a price is below the midpoint go short. But you said that even if the price is above the midpoint it can head south, and even if the price is below the midpoint, it can head north.
So could you explain how using the midpoint only gives us a good signal?
Thanks
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"Simple trading strategy: if the stock opens above it's midpoint, go long, if it opens below go short.
Alternative trading strategy: wait for the price to cross the midpoint and trade in the direction of the cross.
One thing to note is that sometimes, the price opens above the midpoint and keeps heading north or the price opens below the midpoint and keeps heading south.
Of course, sometimes the opposite happens - the price heads towards the midpoint instead of away from it. "
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TheRumpledOne
6,407 posts
msg #44057
- Ignore TheRumpledOne |
5/22/2006 9:13:54 PM
ANYTHING CAN HAPPEN.
Using the midpoint focusses your attention on ONE thing.
Instead of chasing the stock, you let the stock come to ONE PRICE and trade accordingly.
HTH.
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alf44
2,025 posts
msg #44059
- Ignore alf44 |
5/22/2006 9:32:53 PM
...using the midpoint...OR...
...the Daily Pivot !
Either way...I like the approach...and I use it...DAILY !!! fwiw
Regards,
alf44
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da_trader
22 posts
msg #44061
- Ignore da_trader |
5/22/2006 9:37:33 PM
alf44,
what kind of results are you getting trading the midpoint and/or pivot method described above.
Thanks.
DT
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alf44
2,025 posts
msg #44066
- Ignore alf44 |
5/22/2006 10:19:00 PM
da_trader,
Let me first say...TRO is on to something...but NOT anything NEW or GROUNDBREAKING !
I'm sure he would agree !
The "midpoint" IS basically the "Daily Pivot" !
And although...me and TRO have beaten this horse before...I am STILL of the belief that the...Daily Pivot works just fine Thankyou !
I have been using it...with very "liquid" stocks for years...and...the intraday turns at PP, R1, S1, R2, S2 levels are uncanny!
The neat thing about Daily Pivots (and their associated Resistance and Support Levels)...is that everyone knows where they are...ie. they are widely followed.
They are easy to calculate !
I just prefer them...they are easily accessible to floor traders...why not LOOK at what the BIG DOGS are LOOKING at ?
Let me reiterate...I'm talking about widely followed...liquid stocks here !
Regards,
alf44
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clam61
92 posts
msg #44068
- Ignore clam61 |
5/22/2006 10:30:23 PM
what are R1, S1, R2, S2 levels? resistance and support right? what do the "1" and "2" on R1 and R2 mean?
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nikoschopen
2,824 posts
msg #44069
- Ignore nikoschopen |
5/22/2006 10:30:43 PM
While being similar, there is a important difference between a pivot point and a midpoint. A pivot point is calculated as (High + Low + Close) / 3, and midpoint is, well, just that.
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alf44
2,025 posts
msg #44072
- Ignore alf44 |
5/22/2006 10:34:27 PM
niko,
The difference is negligible. imo
Regards,
alf44
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nikoschopen
2,824 posts
msg #44071
- Ignore nikoschopen
modified |
5/22/2006 10:36:52 PM
Clam,
PP = (High + Low + Close) / 3.0
S1 = 2 * PP - High
R1 = 2 * PP - Low
S2 = PP - (High - Low)
R2 = PP + (High - Low)
(In reference to http://www.stockfetcher.com/stockdb/fetcher?p=forum&sub=view&fid=1006&tid=132)
According to Investopedia (Ragg's fav site):
R2 = P + (H - L) = P + (R1 - S1)
R1 = (P x 2) - L
P = (H + L + C) / 3
S1 = (P x 2) - H
S2 = P - (H - L) = P - (R1 - S1)
If you actually do some calculation, you would find that R2 will have a "higher" resistance than R1 while S2 "lower" support than S1.
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nikoschopen
2,824 posts
msg #44073
- Ignore nikoschopen |
5/22/2006 10:40:32 PM
Alf,
True to a certain extent (especially in a dull market), but on a day like today that "negligible" may require yet another definition.
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