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Preview: Comments on TraderFeed: How I Trade: Handicapping the Odds of Hitting Piv...

Comments on TraderFeed: How I Trade: Handicapping the Odds of Hitting Pivot Points





Updated: 2016-08-14T03:34:09.589-05:00

 




2008-05-22T18:28:00.001-05:00

This comment has been removed by the author.



What platform allows for volume distribution. Also...

2008-05-22T18:28:00.000-05:00

What platform allows for volume distribution. Also what would the formula be for the tick value? It appears to be the 20 day average which today as of close would be about +53 and then subtract the last?



Hi Gary,I'm afraid I'm not aware of any books on t...

2008-03-11T08:56:00.000-05:00

Hi Gary,

I'm afraid I'm not aware of any books on true scalping. If readers know of any good ones, please pass along the references. Thanks!

Brett



oooo i see , thanks for the clarification Dr Brett...

2008-03-11T08:39:00.000-05:00

oooo i see , thanks for the clarification Dr Brett.

Enjoying your Blogging !!!

Was reading your book and u mentioned a scalper named David.

Would you happen to have any excellent books on scalping techniques to recommend?
Thanks!



Hi Gary,The distribution of the unfolding NYSE TIC...

2008-03-11T08:30:00.000-05:00

Hi Gary,

The distribution of the unfolding NYSE TICK during the day impacts the likelihood of hitting those pivot levels.

Brett



I am not very sure what you mean by calculating th...

2008-03-11T08:27:00.000-05:00

I am not very sure what you mean by calculating the probabilites of the market hitting the points.

Care to elaborate?

Noted that u use volume distribution aka close to the points to determine if they will be hit?



Hi Gary,Pivot points are simply reference points t...

2008-03-11T08:15:00.000-05:00

Hi Gary,

Pivot points are simply reference points that first were used by floor traders. There's nothing magical about them at all. They're useful only in the sense that you can use them to calculate probabilities of market movements for trade ideas.

Brett



Hi, i would like to know the signifiacne of the fo...

2008-03-11T08:13:00.000-05:00

Hi, i would like to know the signifiacne of the formula of Pivot points and in what way are they critical ? From the formula, it just seems like an average of prices during the day.

Please enlighten, Dr Brett



Hi Daniel,Thanks for the note. There are differen...

2007-04-04T08:05:00.000-05:00

Hi Daniel,

Thanks for the note. There are different formulas for pivots and some people use day data; some include overnight data. I've tested out the formulas mentioned in the article with day data and those have worked well for me.

Brett



Hi Brett,Thanks for you work fist of all!One quest...

2007-04-04T07:33:00.000-05:00

Hi Brett,

Thanks for you work fist of all!
One question, the link to www.investopedia.com shows (I believe) a different formula. Is that right or wrong?

Thank you in advance,

Daniel



Hi Jeff,I generally like to estimate targets from ...

2007-03-20T10:04:00.000-05:00

Hi Jeff,

I generally like to estimate targets from the most recent data and have found that the pivots derived from day session test out quite well. Thanks--

Brett



Dr. Steenbarger, Thanks for sharing your insights....

2007-03-20T07:58:00.000-05:00

Dr. Steenbarger,
Thanks for sharing your insights.
Could you comment on why you use session hours and not Globex hours? Personally I'm undecided about the EC but I'm pretty sure that the YM pivots "work" better when based on ECBOT hours rather than open outcry hours. Do you have any opinion about that?



Hi Dave,Yes, I use day session data for pivots. T...

2007-03-11T12:19:00.000-05:00

Hi Dave,

Yes, I use day session data for pivots. Thanks--

Brett



Hello,When calculating pivots are you using the hi...

2007-03-10T09:42:00.000-06:00

Hello,

When calculating pivots are you using the high and low between 8:30am CST to 3:15pm and using the settlement price as the close?

Thanks!



Hi Simply Options Trader,At this juncture, I use t...

2007-01-14T20:14:00.000-06:00

Hi Simply Options Trader,

At this juncture, I use the pivots for ES, NQ, ER2, and the corresponding ETFs: SPY, QQQQ, IWM. I have an idea for applying the method to individual stocks and other ETFs, but have not yet tried it out. I'll report on that after I've had some experience. Thanks--

Brett



Hi Dr Brett,You apply these studies to futures mar...

2007-01-14T19:53:00.000-06:00

Hi Dr Brett,
You apply these studies to futures market. Have you use pivot points to trade stock indices or stocks itself and do they share the same success rate as futures market?

Next day pivot levels will be in tight range if prior day's trading range is also tight. On such days, do you place less emphasis on pivot points since they can be easily taken out?

Thanks for your sharing and have a good weekend



Hi Damien,I do not trade mechanically, but I think...

2007-01-14T14:15:00.000-06:00

Hi Damien,

I do not trade mechanically, but I think you're asking great questions that could turn the pivot approach into a formal trading system. In a nutshell, I use shifts of distributions against my position as stops, not opposite pivot points. I leave a portion of the position on if the odds are good of hitting R2 or S2. And most my trades are daytrades, although I'll be posting something on a swing basis shortly. Thanx for the interest--

Brett



Great - thanks for reply. I see this as a swing t...

2007-01-14T08:10:00.000-06:00

Great - thanks for reply. I see this as a swing trading method - is that how you're using it or have you looked at it for day trading? Also, as long as I'm barraging you with questions - I'm guessing the stop for any position is at the opposite pivot point - so, if you're long, stop is at S1, etc. Or do you use a volatility-based stop? Finally, have you looked at different position sizing techniques (fixed fractional, etc.) - I'm thinking of looking at this in my own testing.



Hi Damien,I mostly trade ES, but recently have als...

2007-01-13T19:04:00.000-06:00

Hi Damien,

I mostly trade ES, but recently have also traded ER2 using the NYSE TICK data. Next step will be NQ with the NASDAQ TICK. Thanks--

Brett



Do you only trade the ES using this technique?

2007-01-13T18:19:00.000-06:00

Do you only trade the ES using this technique?



Hi J Readling,Yes, I do have trades mapped out whe...

2007-01-13T15:41:00.000-06:00

Hi J Readling,

Yes, I do have trades mapped out when buying or selling dry up prior to hitting a pivot level. Most commonly these are trades (fades) to the day's average trading price. Thanks for the note--

Brett



Hi Simple,Great questions; thanks. As you might g...

2007-01-13T15:39:00.000-06:00

Hi Simple,

Great questions; thanks. As you might guess, the nearer we close to a pivot level, the greater the odds of hitting that level, all other things being equal. I have focused on the ES market for those levels.

Brett



Hi Rick,The Adjusted TICK is the daily cumulative ...

2007-01-13T15:38:00.000-06:00

Hi Rick,

The Adjusted TICK is the daily cumulative one minute values of the NYSE TICK minus the 20 day average TICK. Thanks--

Brett



Thanks for sharing so much of your work. Do you h...

2007-01-13T12:46:00.000-06:00

Thanks for sharing so much of your work. Do you have any inkling of whether fades of R1/S1 will be successful based upon TICK or other data? Do you use these levels as targets only?



Hi Brett,I also use Pivot points for setting entri...

2007-01-12T23:05:00.000-06:00

Hi Brett,

I also use Pivot points for setting entries, exits and taking partial profits. Even though these levels were mainly used by floor traders in the pits, I find it interesting that these levels continue to work on many occasions even with the electronic contracts.

Thanks for posting these stats. I find it amazing that R1 & S1 are reached almost 70% of the time under the conditions mentioned.

I have a few related questions:

How do the pivot levels hold to the open price of the market i.e. on bullish days has the market opened very close to R1, and near S1 on bearish days.

Also since the pivots are calculated based on the previous day volatility, the pivots will be very close to each other following a range-bound day. These will be easily be taken out by a normal day's average range.

Also which markets have you had success using Pivot levels. I find that they are more reliable on the YM and ES contracts but with NQ and ER2 they rarely hold.

Thanks,
Sam