EDIT - Sorry that pic was without round numbers. With round numbers its even more accurate. Am I kidding myself? I mean take a look at the first pic. There was a key area which had no confluence from these indicators. Now I ave put round numbers in looks what happened… I’m sure this is nothing new, but I wonder why many don’t use these indicators when they seem great. Maybe they only work in hindsight?
I also like pivots and agree that at times they can be very useful. A fellow named Frank Ochoa has a very good book on Pivots / value trading. I like pivots as a confluence S/R tool, as these are mathematically calculated S/R. I think they have a use, but like many things are much better when combined.
I have read about that before. I understand that random lines can also show in confluent areas but I’m going to have to give them a go. Looking at the picture I provided does it really look like those lines are at random points? Seem very spot on to me.
I really think it comes down to self fulfilling prophesies. They seem to work because millions of people expect them to and so plan trade around those areas. The difference is with these pivots is that they are the same for everyone and based on calculations. They are not objective so the lines have more meaning than indicators such as MACD and RSI which are objective. Pivots are predictive instead of lagging.
A Moving Average can show the general trend but I would not use for anything else. The MA can show in a millions places depending on your settings so to say say “i will trade when the candle closes above/below the SMA” is really useless. I’m all about price action but If I do see price reacting to a pivot area then I think it’s very usefull and also good for setting targets.
Thats my guess.
It;s funny really. I kind of think that to know smart moneys next move you need to know where the dumb money is. To do this perhaps throwing all the indicators on your chart is a good thing. Not to plan trades for yourself but to know where the herd will put there stops. Knowing this probably helps understand what smart money will do. I probably wont go that far though. Pivots will do.
Umm… Just been trying to find out why my pivot levels are not the same as the ones given on Daily FX. So yeah… pivots are useless unless you have a broker Server in the NY time zone. If not it completely messes up all the levels. so I have to find a EST broker. This stuff is sure annoying. Just want to trade. so much messing around to set things up.
