Quote from AltarEgo15:
Tell me, do you use PIVOTS as part of your strategy?
You have not mentioned using them.
Yes.... but not by them selves. In other words i look at other indicators to see if they are also setting up for a reverse. I look for Nessie in at least 2 or 3 different time periods. Imagine this.... you are trading off the 5 min. chart. You see Nessie on the 5 min Stoch... and lets say MACD confirms it... (We'll say the mkt internals are bearish: TRIN, VIX = trending up...Breath trending down...etc).... and so you see the price begining to hesitate as it approaches a pivot above. You getting ready to short right?.... What are the odds of this trade working out?
Who knows.... you get several readings like this on a bearish day... so you figure most likely than not odds will work on your favor.
BUT... what if, in the same short scenario.... when you see price approaching a pivot, and also getting a wink from Nessie on the 5 min Stoch chart with confirmation from MACD.....you ALSO get the same set-up happening in the 15min Stoch and MACD and the 60min Stoch/MACD?? What are the odds this trade will work out now???? I will argue that they are much greater now! The drawback is you will get much fewer setups.
Some would argue that if they only trade off the 2min and 5min charts, that the 15min and 60min are irrelevant. But i explain it this way.....
Imagine being in an elevator going up.
That elevator is called "A"
Now imagine elevator "A" being inside another much bigger elevator "B".... which is going down.
Elevator "B" is inside in yet a much larger one "C"... which is hardly moving or slightly going down. You getting the picture...
Now imagine all three elevators, all going up. Thats how i use deferent time frames to fortify a play in a shorter time frame. So going back to your question... if i see price approaching a pivot.... a daily pivot lets say... and nothing else is telling me anything... i most likely will do nothing. Just like i do nothing if only Stoch is giving me a buy or sell. Same goes if P/C ratio is bearish with the VIX... but the TRIN is neutral with the BREADTH and $VOLD positive.....i stay out until something clear develops.
That being said.... if price is approaching a weekly or monthly pivot..... well then thats a different story...gotta respect those levels....in which case i would sell or cover if im already in a position. But... never, ever would i enter based on that alone.
Well hope i answered your question....sorry about rambling on.
