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A pivot is the highest or lowest value occurring in <strength bars>.
Strength is the number of bars either side of the pivot. Pivots may be
identified on closing basis (line on close chart) or range basis
(traditional high/low/close chart). Pivot identification is extremely
simple, except that some special rules come into play when gaps or flats
(consecutive identical values) occur.
I'm attaching a couple of previous posts on this subject.
Perhaps you need to take another look at Edwards & Magee, pivots are
essential to their material.
Earl
----- Original Message -----
From: <HARELSDB@xxxxxxx>
To: <realtraders@xxxxxxxxxxxx>
Sent: Friday, July 09, 1999 11:06 PM
Subject: Are Pivots like Pornography?
> 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
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: "RealTraders Discussion Group" <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Identifying Pivots (wad Dow Theory Applied)
Date: Tue, 21 Jul 1998 06:35:29 -0600
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From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: "List-RealTraders" <realtraders@xxxxxxxxxxxxxx>
Bcc: "Tom Nagle" <tnagle@xxxxxxxxxxx>
Subject: Re: Identifying Pivots (wad Dow Theory Applied)
Date: Tue, 21 Jul 1998 10:45:35 -0600
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<DIV>I've had a couple of emails regarding pivot identification rules 4a and 4b
- here are visual examples where strength is specified as 2 bars either side of
pivot:</DIV>
<DIV> </DIV>
<DIV>4a (TrueHigh)</DIV>
<DIV> </DIV>
<DIV><FONT face="Courier New"><FONT size=2>x</FONT></FONT><FONT
size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2>x</FONT></FONT><FONT
size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2>
x <invalid pivot bar 5: TrueHigh gap
1-2</FONT></FONT><FONT size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2> x x
x</FONT></FONT><FONT size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2> x x x
x</FONT></FONT><FONT size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2>
x x</FONT></FONT><FONT
size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2></FONT></FONT><FONT
size=2></FONT> </DIV>
<DIV>4b (flat)</DIV>
<DIV> </DIV>
<DIV>
<DIV><FONT face="Courier New"><FONT size=2> x x x
x <valid pivot bar 4, validated bar at 8</FONT></FONT><FONT
size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2> x x x x x
x</FONT></FONT><FONT size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT size=2>x x x x x
x</FONT></FONT><FONT size=2></FONT></DIV>
<DIV><FONT face="Courier New"><FONT
size=2>x x</FONT></FONT><FONT
size=2></FONT></DIV></DIV>
<DIV> </DIV>
<DIV>Earl</DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>>>Date: Tue, 21 Jul 1998 06:35:29 -0600<BR>>>Reply-To: <A
href="mailto:eadamy@xxxxxxxxxx";>eadamy@xxxxxxxxxx</A><BR>>>From:
"Earl Adamy" <<A
href="mailto:eadamy@xxxxxxxxxx";>eadamy@xxxxxxxxxx</A>><BR>>>To:
RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR>>>Subject:
Re: Identifying Pivots (wad Dow Theory Applied)<BR>>><BR>>>Some
quick thoughts on pivot definition:<BR>>><BR>>>1) Pivots should be
identified according to strength which is the <BR>>number of
bars<BR>>>on either side of the pivot point which are less extreme than
the pivot <BR>>e.g.<BR>>>strength of 2 means that two bars on
either side of the pivot are less <BR>>extreme<BR>>>than the pivot
(exception for flats - see below). The greater the <BR>>strength of
a<BR>>>pivot, the more important it is.<BR>>><BR>>>2) A higher
compression e.g. weekly vs daily can be used in lieu of
<BR>>greater<BR>>>strength to identify more important
pivots.<BR>>><BR>>>3) Use of averages and other filters will
inevitably lead to <BR>>misidentification<BR>>>of some
pivots.<BR>>><BR>>>4) Virtually all pivot identification routines
appear to be designed by<BR>>>programmers rather than traders and therefor
fail to properly identify<BR>>>conditions which are critically important
to proper pivot <BR>>identification:<BR>>><BR>>>a) The bar to the
immediate left of the leftmost bar checked for <BR>>strength
must<BR>>>be checked for True High or True Low i.e. most pivot routines do
not <BR>>check for<BR>>>gap conditions at the far left which would
nullify a pivot.<BR>>><BR>>>b) Bars to the right of a pivot may be
flat (equal to the pivot <BR>>extreme) except<BR>>>that the rightmost
bar in a pivot must be less extreme than the pivot.
<BR>>Most<BR>>>pivot routines fail to identify flats. Further, when a
flat occurs in <BR>>dynamic<BR>>>updating with the rightmost bar equal
to the preceding bars, the <BR>>routine needs<BR>>>to remember this
fact and, when the next bar arrives, check to see if <BR>>the
new<BR>>>bar is less extreme thereby validating the pivot some bars
further back <BR>>than
the<BR>>>"strength".</DIV></BODY></HTML>
</x-html>From ???@??? Sat Jul 10 08:26:40 1999
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From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: "Real, traders" <Realtraders@xxxxxxxxxxxx>
References: <3786A92B.2C6397DE@xxxxxxxxxxxxx>
Subject: Re: DiNapoli's Book
Date: Sat, 10 Jul 1999 04:52:19 -0600
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Status:
DiNapoli's Fibonacci based techniques are good and practical, bought his
workshop on tape (8 tapes $400+-) about a decade ago and have been through
it many times. Book covers more or less same material at $150 discounted
30%+ at some online book sellers. I would also recommend looking at Miner's
Dynamic Trading (www.dynamictraders.com) $100 - not available at book
sellers. Miner teaches similar Fibonacci techniques which he complements
with very basic/practical Elliot Wave, time analysis, some basic trading
patterns, and detailed entry/exit strategies. His material is very well
written and very practical - if had to recommend only one book to any trader
(newbie or veteran), this would be it.
Earl
----- Original Message -----
From: William DuBroff <mcsquare@xxxxxxxxxxxxx>
To: Real, traders <Realtraders@xxxxxxxxxxxx>
Sent: Friday, July 09, 1999 8:00 PM
Subject: DiNapoli's Book
> Can anyone provide a short review of Trading with DiNapoli Levels by J.
> DiNapoli? Is it useful and does it provide unique information?
>
> Thanks.
>
> Bill
>
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