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Hello Tim,
Pivot Points have traditionally been used by commodity traders to project
possible levels of support and resistance for the next trading day. If you
want to plot the levels on a Metastock chart, it needs a tiny bit of
lateral thinking.
Given that the pivot points for the CURRENT day have been computed from
YESTERDAY'S price data, in order to plot the Pivot on your chart, the
formula is:
Ref ( (H+L+C)/3 ,-1)
Create an indictor and call it Pivot.
The other levels are then computed as follows:
High Resistance (R2) Fml("Pivot") + Fml("Fml("R1") - Fml("S1")
Intermediate Resistance (R1) Fml("Pivot") * 2 - (Ref(L,-1)
Intermediate Support (S1) Fml("Pivot") * 2 - (Ref(H,-1)
Low Support (S2) Fml("Pivot") - Fml("R1") - Fml("S1")
I suggest that you change the colours of the plots and then save it as a
template.
To create an Exploration to compute tomorrow's pivot levels, use these
formulas with the current prices rather than yesterday's prices.
I am not sure how Metastock decides current momentum but one way would be
to say if today's pivot is above the 3 day MA, then there is upwards momentum.
The general idea is that if the price breaks through R1 or S1, then R2 or
S2 will provide the next level of resistance. However, if you look at the
plots, you will see that there are often spikes through S2 and R2. I have
had quite a bit of success fading the spikes, i.e. when R2 is penetrated, I
go short and when S2 is penetrated, I go long. I have found that this works
best as a two day trade, i.e. exit at the close next day.
Any suggested improvements to this idea would be welcomed by me as I am
very interested in improving this system.
Regards,
Kevin
At 09:07 15/05/2003 +0000, you wrote:
>
>Although the Power Pivots add-on is probably the best yet made
>available for Metastock users, the whole idea of the system tester,
>expert explorer and indicator builder is to be able to realize ones
>own trading ideas and be able to adapt the code at wish. An add-on,
>which is password-protected is of little real help to a system
>developer.
>The pivot momentum model included in the Power Pivots add-on seems to
>generate a constantly rising equity curve in almost all markets and
>time frames. The model description is as follows:
>
>It analyzes the current momentum high and low pivots as they are
>created, and trades in the direction of that trend.
>
>Entry - A long entry is generated when minor low pivots begin forming
>at a faster rate, and a higher price, than intermediate high pivots.
>Conversely, a short signal is generated when minor high pivots begin
>forming at a faster rate, and a lower price, than intermediate low
>pivots.
>
>Exit - The model looks to exit the market once the rate at which
>pivots are being formed drops below a certain threshold.
>
>
>We know Pivot is
> (H+L+C)/3
>
>But how do we calculate these new pivot terms
>
>1). high Pivot;
>2). low pivot;
>3). minor high pivot;
>4). minor low pivot;
>5). intermediate high pivot;
>6). intermediate low pivot
>7). Current momentum of high pivot and low pivot
>8). Direction of momentum trend
>9). Rate of formation of pivot
>
>
>
>Question: Has anyone attempted to code a similar strategy or has
>anyone suggestions as to how one could go about it?
>
>Grateful for any input,
>
>Tim
>
>
>
>
>
>
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>
>
>
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