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>I checked several of my references such as Edwards & Magee, Pring's
Technical
>Analysis Explained, and Achelis' Technical Analysis from A to Z, however,
I
>have not been able to find a discussion of "pivots". I have seen them
>mentioned on realtraders numerous times, but, I am not sure I would
recognize
>one if I saw it. Can someone provide a concise description of how to
>recognize and use a pivot?
>
>Thanks
>Dan
>Pocatello, ID
So far as I am concerned, there are two uses for the name "pivots". The
first is in the context of what I call the Pit Pivot System. This the
generally recognized way in which the pit traders set a guideline for the
day, based on the previous day's HLC. Personally, I use an amended
version, given to me some while ago when I was visiting Chicago. I
believe there is an Omega .ela version which you can load, but I have never
done this, so cannot comment on its accuracy.
The second use of the name "pivots" is more significant to me and involves
identifying the swing high and swing low of a contract (in my case the
T-Bonds) as it trends along its merry way. Some people like to use all
sessions, others only the day session. Some use different intraday time
frames, etc. to identify the pivot. It is all a question of the merit
that is given to a pivotal point rather than other turning points, while
trading intraday. Yesterday, for example, the T-Bonds bounced off a major
pivotal point, to form the high of the day - this was also the Head of a
H&S formation, which led to the breaching of the intraday low. The market
then bounced back off another significant point. Using this type of
information led to 22 ticks down and 10 ticks up, or, looked at another
way, what I call a $1,000 day (per contract). The day before yesterday,
was even better, because of the pivots in the market place, allowed for a
single trend all day, for another $1,000 day.
But you must remember, that pivots of any sort cannot be used in isolation.
It all depends on the price action as it reaches these points and how you,
as it were, read the tape and take a judgment, within the context of your
game plan.
Hope this helps and have a good week-end
Bill Eykyn
www.t-bondtrader.com
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