My pivot trading methodology depends on anticipating and trading as close
to the pivot points as
possible. My argument is that trades near the pivot points are the lowest risk
and highest reward points to trade. I operate my trading as a business - I buy
inventory and sell to capture a minimum profit margin. I have spent most
of my trading career studying the characteristics of markets at turning points
(pivots) and constructing trading tools to anticipate and trade near those
points. These tools deliver consistent reliability of profitable trades between
70% and 80%.
I document my trading concepts by forward testing, not computer generated
back testing. In other words I trade the tools in real time and record the
results. For example, my latest application to the ESZ08 has generated about 78%
profitable trades on a five minute chart over the past 6 weeks.
One of the issues I have with the people that post forecast on this list is
that they do not provide reliability measures of their techniques. Failed
forecasts are rarely addressed and specific application details are not
provided. Consequently I usually delete them without consideration - after all -
a stopped clock is right twice a day.
So I recommend that anyone who posts a forecast provide the statistics
documenting the same performance of technique over at least 100 applications.
For example my techniques are good within one bar of the forecast 70% to 80% of
the time depending on market. With that information, readers can better judge
the value of the post.
Jim White
Pivot Research & Trading Co.
PivotTrader.com