I agree 100% with all that you’ve said. Including pivots (being a mathematical formula). Only reason they work (as with most all other stuff of this nature) is because there’s so many that watch then and trade them is all. In and of themselves they mean nothing.
Chat is interesting.
Seems to me that if you had to place your stops at the PREVIOUS swing high or PREVIOUS swing low prior to taking the trades then they never get taken out (well not never i.e. on this chart but you know what I mean). Or am I not reading it right??? In some cases the stops look far away so it would impact on the size of your trade. Rather that and make some money that lose 1% or 2% every other minute.
BUT: that’s a 30-minute chart so when and on what basis are those lines drawn and calculated???
The pivot lines are all based on the previous week’s high/low. They don’t change all week.
Naturally, when the market moves substantially then it will be beyond all the levels! but this is maybe an approach for during those consolidating periods - which i think are quite many.
But, like i said, this is a prototype with zero record so far! but i will report on how it looks next week.
IF you do not have access to a FIBR Pivot, these are the formulas from the code. Very easy to put into a spreadsheet at start of week! (as you can see, R3 and S3 are just the high and low from prev week)
But I emphasise once again (especially to anyone else that happens to be reading this) this is a brand new experiment and I do seriously think it will need some kind of filtering “method” overlay - otherwise this would already be traded by so many people, being so simple?
Must say I slapped weekly pivots (standard floor pivot formula) onto a 30-minute chart of the NASDAQ (first chart that popped up is the only reason for the NASDAQ). Must say: they sure do seem to hold nice. Found what APPEARED to be some nice trades on the chart all with a nice clearly defined stop levels. Only one would have been stopped out. TP subjective though. Cannot say that they’re short term intraday trades though i.e. also appear to last a few days (or you wait a good few days to get into the trade). But let’s see. Maybe we have some notes to compare next week.
Must say I’m kinda looking forward to the week (a rare occurrence for me of late so better make the most of it!!! LOL!!!).
This is an interesting thought/prospective! Thinking about it now it makes sense! Thanks for posting that.
I have never used PPs. I will take a look at my s/r, s/d zones using a Fib and will see confluence at times. Agree with you guys that a line on a chart doesn’t dictate price but can help identify where substatial trasactions have moved the price in the past and may do so in the future (you may have said this and I missed it) this in the light of past performance…blah, blah, blah, future returns crap. Again, I just play a trader on TV - I’m still a forex demo-god in real life.
Dale and friends,
I spent last night running this on a simulator for a number of randomly selected months from the period 2016-2019 with very mixed results!!
I would totally recommend that one only trials this kind of approach on paper to start with until some kind of rules/additional method overlay starts to emerge…
Will monitor myself and see if there is any point in pursuing
Spent time yesterday taking another look at Wilder’s Reaction Trend System which is based 100% on the standard levels. Will see how that plays out during the week too i.e. same thing except with a predefined entry and exit plan is all. Demo only obviously.
Back to he real world. Got some stuff to do on my thread.
Hi @GilasTrading, I wanted to get back to you on this earlier, but got caught up in looking at these pivots in a new light!
I fully agree with you that whenever multiple TA lines/areas/zones, etc coincide, especially when they come from various timeframes, including longer term ones, then there will be a stronger reaction. And that is definitely worth watching.
The main problem is if one starts watching too many different things and finds that for most of the time they do not coincide! Then we can easilt find a state of Analysis Paralysis v. Confluence!
Naturally, one has to decide which are one’s prime structures and which are secondary - and preferably they have different purposes in one’s analytical set-up.
The other issue is, of course, how far cumulative speculative, TA-based, trader input can move a market, if the underlying fundamentals are going places…
I am sure you are right, there! Wouldn’t work for me though. It just throws me into a state of indecision!
I am already going goggle-eyed just looking at these pivot lines and have almost chucked the whole thing before even starting. I just can’t take multiple lines, but that is just me. I would probably do a lot better if I could cure that fault - but I am so very simple.
That is really great! I really do admire you for that. The one thing that I think everyone should seek is a personalised chart set that does precisely what you said: “fits my personality and thinking.”
There are thousands of different car makes and models and we always select one that does precisely what you describe - but with TA it sometimes seems that traders are always looking to just copy someone else’s - or even worse, telling others what their’s should look like!!!
…and I guess if one’s chart set, whatever it is, actually works and makes money then that is an additional benefit!!
Well here’s the plan I’ve been testing (live) since last week. See what you think.
Based on my core system is all (which I’m not going to detail here).
Basic plan is simple (and here we are assuming short trades):
Wait for RSI(2) to close above 75 for two consecutive days. Once that’s happened: you simply place sell limit orders at either R3, R2, or R1. Which level is up to you i.e. depends on how “sure” you want the trade to be and how much you’re prepared to lose on a trade. I’ve been selling at R3 and taking profit at R2. Have only lost one trade and the loss was minute. You don’t get many trades selling at R3 that’s true. But when you do get a trade it’s a cinch as price trading past R3 and closing above it are quite something. Also: you don’t hold trades overnight. You close no matter what before the close. Also no point in leaving pending orders when half the day or more has gone by because you don’t want your limit orders to be executed and then there’s not enough time for them to trade to your TP level. And where you TP is also up to you. You could close half a position maybe at the next pivot level and the balance at the next. That type of thing.
Using the above as an example: you trade this day in and day out UNTIL RSI(2) has closed below 30. From that point onward you are then waiting for two consecutive closes of RSI(2) below 25 and then you’re only looking for long trades i.e. buying at S3, S2, or S1.
And so on and so forth.
I don’t use stops by the way so how you do this is up to you. Obviously my position sizes are much smaller (as a result of my risk based position sizing) than were I to place stops somewhere closer to the pivots e.g. above or below R3 or S3. But the risk / reward on these trades (the way I’m doing it anyway) is perfectly acceptable to me anyway.
Now ONE thing new that I tried today:
I was awake at the open at midnight. So I checked to see where the S&P, Dow, NASDAQ, and Japan opened relative to the pivot. All had opened below the pivot. So I placed limit sell orders at the pivot. All were executed. I took profit manually on the Dow and Japan but am currently carrying two losers on the S&P and the NASDAQ. But even if I closed these two out now I would have made a net profit on the trades.
Now to this end I’ve something else that may or may not have merit but will see.
Wilder developed a trading system called the Trend Balance Point System. Long story short one of its components is a very short term, price action based, momentum gauge (not an indicator by any means). It’s actually called the “Momentum Factor”. So far my theory is panning out on paper. And it adds an extra level of comfort to the direction you should take the trades. Will post about this sometime this week I expect (only problem is you will need to manually work out the Momentum Factor purely because it’s just not something you will find on a platform anywhere).
but this is maybe an approach for during those consolidating periods - which i think are quite many.
but i will report on how it looks next week.
Again, I just play a trader on TV - I’m still a forex demo-god in real life.
