Pivot Levels
- Thread starter dbphoenix
- Start date
http://www.cbot.com/cbot/dow/cont_detail/0,2614,4+9029,00.html
Scroll down to Carolyn Boroden's Using Fibonacci Price Clusters presentation. It's a decent overview.
Scroll down to Carolyn Boroden's Using Fibonacci Price Clusters presentation. It's a decent overview.
Quote from iriekity:
I use fibonacci levels as pivots as well as support and resistance and I have to say that it works great. Where as I use to trade 2 to 3 names, now I trade anything that meets my criteria. It was at first tough to switch from trying to figure all of this out with just charts or formulas to letting software do it all for me, but now I would never go back.
Would you plz let us know what time frame usually do you calculate fib # and what is your entry and exit criteria.
I use fibonacci levels as pivots as well as support and resistance and I have to say that it works great. Where as I use to trade 2 to 3 names, now I trade anything that meets my criteria. It was at first tough to switch from trying to figure all of this out with just charts or formulas to letting software do it all for me, but now I would never go back.
Would you plz let us know what time frame usually do you calculate fib # and what is your entry and exit criteria.
Do you pivot users' only wait tell you get a bounce at a level then enter? Or do you try to get in exactly at the level? Personally it seems better if you'd wait for some sort of reversal candle etc to form before you get in. Is this the way you guys use them?
As I said in funky's thread, I wait for a bar with a higher low (if looking to go long), then enter on the bar after that, with a stop below the lowest low. I know some people just enter the trade when the PL is reached, but too often the price just breezes right through. I'd like to see some evidence of at least hesitation, preferably reversal.
I guess it depends on your style. You can act right at the pivot, a couple ticks away from it, or wait for it to confirm as s/r.
Is it the first test of the pivot?
Does the pivot coincide with another s/r level such as PDH, PDL, PDC, previous day price s/r, etc.?
Is exhaustive volume driving price toward the pivot?
It's just another s/r level that many traders watch and a potential actionable area. If the odds are in your favor by whatever means you determine and you're willing to pay to see what will happen, you can be as aggressive as you like.
Without getting into confirming S/R, today's trading illustrates what I said earlier.
Using a 3m chart, you can see that while price didn't quite reach R1 (at least the way I have it figured), it did make a double top at the same time the ES was showing weakness. This shifts the probability to the plus side. Entry is shown by the arrow.
As for the PP, it's necessary to exit here if one is trading only one contract so that he can be ready to take advantage of a reversal (one disadvantage of trading only one contract). Either way, it's a good profit target even if one doesn't want to take the reversal. If the reversal is taken, entry is shown by the arrow.
If you know anything about Wyckoff, there is a confirming factor in the volume. Note the volume on the marubozu and the volume two bars later at the lower low. The fact that volume is lighter suggests that selling is drying up which, again, shifts the probability to the plus side for the reversal entry.
[Edit: speaking of probability, I don't use Fib, but if you begin measuring the current move from the 12/26 LOD, then 1464 represents a 38% ret, which, supposedly, further confirms a potential reversal level. Of course, if you began measuring from somewhere else, you'd get a different level, which is one reason why I don't bother with Fib . . .. But God bless those who can make it work
]I've been recording these pivots and plotting them on my chart almost every day, since the funky thread, and what I've found is that when the market is in a trading range, they work great as reversal areas. And I developed a system to trade these.
I've also noticed that on trend days, these points will act as pause areas, before continuation. I've got no real concrete method of trading these trend days.
A problem I have, is determining wether or not we are entering a trading range day, or a trend day.
So far I've found that when we have 3 TR days (trading range) days in a row, with decreasing daily range, the fourth day is likely to be a trend day.
Other than that I haven't yet developed a way of keeping my mind straight with what the current days trading is likely to be like.
What I would like to get out of thread is, how to recognize if price is bouncing off a pivot, for a reversal, or pausing for a continuation.
sulong
PS. I see that theres some other post since I'v been typing so if I'm off topic here, pardon.
edit: I hope this makes sense, if not let me know and I'll try again.