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pivots are support and resistance levels,
heres the formula use the previous days high, low and close figures.
work out the pivot first, the rest follow from that. this is for daily
support resistance, but you can use weekly h, l, c, data. etc..
resistance 3 = (pivot - sup 1 ) + Res. 2
resistance 2 = (pivot -sup. 1 ) + Res. 1
resistance 1 = (2 x pivot) - low
PIVOT = (high + low + close) divide by 3
support 1 = (2 x pivot) - high
support 2 = Pivot - (res. 1 - sup. 1)
support 3 = Pivot - (res.2 - sup. 1)
so calculate the figures put horizontal lines on your charts at all
the points, apparently if prices trade above the pivot , its bullish.
below bearish etc... just observe, it can be an eye opener.... traders
(seek to drive prices ?) to these points, and others will come in from
the sidelines and become buyers and sellers etc, thats the theory i
think, and if we perhaps can understand how others will act at points, then
we can take positions
anyway they can be used as buy and sell zones, if prices collapse
through a support then will they trade to the next support level. ? same
applies to the upside, observe and see for yourself.
perhaps spike highs and lows at the extreme points offer low risk
opportunities ? maybe use another indicator to give weight of evidence
perhaps as pring might say....., worth a look i think..
all the best J.S.D
At 01:06 10/07/99 EDT, you wrote:
>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
>
>
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