Pivot point swings

[Gary Fox]

In addition to program backtesting, I’m keeping a number of different style swing charts by hand to see/attempt to find an edge for shorter term EOD trading.

Regarding the swing charts, it’s easy to draw the two or three bar pivot swings, but I’m waffling a bit on my rules for creating the one bar swing pivot charts that John F. Hill teaches in his training material. I like them the best right now because they are much more responsive than the others.

Basically, Hill says a top pivot point swing is the highest point reached in a movement prior to penetration of a daily low, and a bottom pivot point swing is the lowest point reached in a movement prior to penetration of a daily high. And, the swing is the movement from one pivot point to the next.

The above is fine and easy when the first bar after a high swing point goes lower (penetrates) the low of the swing high bar. However, it becomes more complicated with inside and outside day bars.

Anyway, I’ve created some rules for determining the pivot swings and resulting trend lines in dealing with inside and outside days, and I’ll attach the sp-500 daily with them drawn in.

I’m curious if anyone keeps these kinds of one bar swing point charts, and if so, would care to discuss construction rules.

TIA

Gary

 

[Stardust]

I use them. Use to draw them by hand! Now just do them by eyeball. For 1 bar swing, in my view, still have to follow the swing with the Outside bars. So if up & next bar is OB Swing line continues up to H of OB and then flips to following the Lows with the L of the OB. Inside bars are simple - ignore them. Some will adust OB swings with the strength and direction of the Close of the OB in relationto the swing. I don't think this is necessary as the current momentum direction generally resolves itself in the next bar(daily charts)

Just follow the swings!

 

[Gary Fox]

Quote from Stardust:

I use them. Use to draw them by hand! Now just do them by eyeball. For 1 bar swing, in my view, still have to follow the swing with the Outside bars. So if up & next bar is OB Swing line continues up to H of OB and then flips to following the Lows with the L of the OB. Inside bars are simple - ignore them. Some will adust OB swings with the strength and direction of the Close of the OB in relationto the swing. I don't think this is necessary as the current momentum direction generally resolves itself in the next bar(daily charts)

Just follow the swings!

Hello Stardust,

Thanks for responding. When you said, "So if up & next bar is OB Swing line continues up to H of OB and then flips to following the Lows with the L of the OB."

Would you actually have a swing high and low with just the one bar? If that's it, that's interesting and I had not considered it. I'll attach a chart with two examples on it. I circled the 2 bars that are both a high and low swing. If that's not what you meant, perhaps you can help me out a bit more (dumb hillbilly here).

I also have a question with the inside bar -- I'll leave that for another post.

Thanks again man. Appreciated.

Gary

 

[Stardust]

First example: The OB occurs with the preceding bar which is an inside bar - which is ignored. Go back 2 bars from your OB. At this point the 1 bar H/L swing chart is following the highs.

The next bar is an inside bar - ignore it. Then compare the the "OB" to the "3rd bars" range and note that it doesn't take out the low so it's not an OB when compared to the "3rd bar back". So the swing continues to follow the high and moves up to the high of the OB.

Your 2nd example is correct when constructing using the classical swing chart rules. However, because the bar is a WRB and OB and closes so near it's low this important info would factor into the trend analysis. Re-mark yr chart and post again.

P.S. You may also want to work with a 2 bar H/L swing chart which works well to define trend.

 

[Stardust]

Gary, Just looked at the chart for MDT. The low of the OB 51.26 is lower than the low of the 6/28 bar -51.30. So, the way you drew the swing is correct. But you still compare it to the 6/28 bar and ignore the inside bar. When I originally looked at yr chart it appeared that the OB low was higher.
Swing charts can be confusing when you learn them - in the classical swing chart construction (Gann, Pugh, etc) there are so many permutations.
Gann had H/L 1-2-3 bars, compressed 3 day data into one, weekly monthly, quarterly, His "overnight" swing chart which was based on closes, and then swing charts based on price ranges. To confuse further he also kept his high to high and low to low swing charts. Keep it simple. Concentrate on 1 and 2 bar H/L and apply to all time frames should prove fruitful.