AntNet
36 posts
msg #32722
- Ignore AntNet |
7/30/2004 3:17:20 PM
Pivot Points (PP) have been around since trading began.
Before computers and still today EVERY floor trader knows the DAILY PP for the equity they trade.
Whether memorized, written on their shirt sleeve or forearm skin, they KNOW the PP.
There a some slight variations but the standard formula (used by SF) is:
R2 = PP + (High - Low)
R1 = 2 * PP - Low
PP = (High + Low + Close) / 3.0
S1 = 2 * PP - High
S2 = PP - (High - Low)
See http://www.crbindex.com/techtip/tipv4n10.htm for a good general explanation.
Tom DeMark (Long time Fund Trading Guru) has his own twist on PP.
See his explanation at http://www.investopedia.com/articles/technical/04/041404.asp .
Another well known variation is the "Camarilla Calculator" at :
http://www.surefirething.com .
Personally, I have a spreadsheet of my plagiarized stand alone version.
I also have PP programmed into my charting software.
(If you want a copy of the spreadsheet contact me directly using
BLBANT at hotmail dot com , with Subject: "StockFetcher PP ???"
or my spam filter will probably delete your message.
Please DO NOT use this forum to request the spreadsheet.
PP info ALONE would NOT cause me to make a trade.
But in conjunction with a confluence of other indicators it is very accurate.
Here's a general rule:
1. If today's close is BELOW today's S2, BUY on a move above tomorrows PP.
2. If today's close is ABOVE today's R2, SELL on a move Below tomorrows PP.
(Some traders also consider Lows Below and Highs Above.)
If you have a good charting program that draws the Pivot levels you
will see the high accuracy rate of this approach.
(One warning, results are less meaningful for thinly traded issues.)
Another insight dealing with the chart pattern known as cup and handle is at:
http://www.shrewdinvesting.com/links.asp?do_search=1&keywords=pivot
PP are different from "Turning Points" but when they match up trend changes usually happen.
I am not affiliated in any way with the links shared above.
If you have PP related questions or comments, Post Away!
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