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Please excuse my
ignorance but what are "pivot points" and "support and
resistance pivot points?" I know what support and resistance means but not
with respect to "pivot points." I have a large reference library on trading
but can't find anything on this.
It is not really surprising you cannot find this in a reference library, as it
is not a technical indicator in the accepted sense (although I do have a
special program incorporating the concept within my SuperCharts). It is,
however, the way the traders in the pit trade. It is, therefore, very simple.
In the heat of the pit, it has to be a very quick reference system. For
many it is the only way they trade. Most will have card with the pivot and
suppport and resistance numbers marked up, at the bottom of their deck. They
will also have all the other major numbers noted. They'll probably even have
the Fib numbers in relation to some of these as well.
These are the numbers which tell them when and where to expect orders to come
in, where stops will be, etc. If you day trade, it is ESSENTIAL that you know
what the traders in the pit use. While there are variations on the formulae
the basic one is:
(H+L+C) / 3 = PIVOT POINT
(2 x P) - L = RESISTANCE 1
(2 x P) - H = SUPPORT 1
(P - S1) + R1 = RESISTANCE 2
P - (R1-S1) = SUPPORT 2
Clearly, it is how this information is used, which is the key to success, but
without knowing the basic formulae, of course, you can't start!
Good luck
Bill Eykyn
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