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I've never toyed with recalculating Pivot System S&R levels on an hourly
basis, but I have worked with two other modifications with some success.
One commonly used variation is to incorporate the current day's open in
the calculations of the Daily Pivot. This seems to work well on days
that have experienced large opening gaps. The formula becomes:
(Yesterday's High + Yesterday's Low + Yesterday's Close + Today's
Open)/4
All other Pivot System S&R levels are calculated in the usual manner
using the modified Daily Pivot. You can even add variables that will use
the alternate method when the market opens above or below the previous
close by a specified percentage or absolute amount.
Another alternative is to re-calculate levels at some mid-point during
the day's trading. 11:30CST seems to be commonly used in the bonds. The
formula for calculating the Daily Pivot is modified to include the
morning high, low, and close. Again, all other S&R levels are calculated
in the usual manner.
A cautionary note: Although the more experienced will certainly be aware
of this, I think its important to remind beginners that there are other
factors to consider when using these levels. You don't want to be
blindly buying and selling based solely on the market's proximity. These
techniques, as well as any other method for determining likely support
and resistance, serve as a convenient means of creating structure out of
an inherently unstructured environment. But it is the CHARACTERISTICS of
price behavior when near these levels that is the most critical factor,
not its proximity alone.
Bob Hunt
The Pattern Trapper
E-Mail: RHunt@xxxxxxxxxxxxxxxxxx
Web Site: http://www.PatternTrapper.com
------------------------------------------------------------
"Dr. John Cappello" wrote:
>
> As you may know one of the ways I like to trade is via S & R.Usually these
> are end of day and numbers used for the following day in the most volatile
> markets.
>
> My question is whether or not anyone has experimented with intraday S & R on
> an hourly basis i.e. using the prior hour OHLC to establish S&R for the next
> hour or taking any other intraday time increment to establish S&R to trade
> the next time increment.
>
> Always seeking thoughts ideas and comments,
>
> John
> ______________________________________________________
> Get Your Private, Free Email at http://www.hotmail.com
--
Bob Hunt
THE PATTERN TRAPPER
E-Mail: RHunt@xxxxxxxxxxxxxxxxxx
Web Site: http://www.PatternTrapper.com
Phone: 612-892-5550
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