I've found the basic "floor trader" pivots to be useful and wondered if anyone has tried the Camarilla Equation servce which claims to produce better support and resistance levels using just the previous day's H/L/C as imput? Below are the formulas for the basic floor trader pivots for anyone unfamiliar with them. Wally ------------------- Pivot point = P = (H + L + C)/3 First area of resistance = R1 = 2P - L First area of support = S1 = 2P - H Second area of resistance = R2 = (P -S1) + R1 Second area of support = S2 = P - (R1 - S1)
some people seem to think that the proprietary pivot levels are better. i have been making serious profit from just the public levels, so i would just say don't bother. edit: also, i would suggest that you also look for mid-levels and such....these are often valid as well. in general, let PRICE tell you which pivot level(s) are valid. i've seen some wacky stuff that i just didn't question (like on big gaps the pivots were all the mid-pivots instead)....if you are observant, these levels will serve you well!
I recall seeing a post with the algorithm of Carmilla. Could somebody give a pointer to this, please?
Thanks for the insights Funky. I've since done a search and noticed HarryTrader has some formula similar to Camarilla but wouldn't post the foumulas. Maybe somone else has this information. I only know that Camarilla uses fibonacci somehow in the formula. Wally
probably...although through my statistical research, i have found that it gives no higher %win or %win/loss. its best to stick to the pivots (i attached here .... this is today's action, notice how if you were to pick off the first reversal of the day, at the pivot, you would have 1 TRADE ON today, and that would be short. stop is now at next pivot down when price tested and bounced (continuation). albeit this day sucks, i am averaging $0.23 now per trade (on SPY). but i only get 3.35 trades a day. it does the job!
I've had much trouble determining which, if any, pivot the market is going to honor. It appears to me that the pivots are just reliable enough to be interesting but are very difficult to base trades off of. Maybe I am just not understanding them enough. Attached are the pivots on the S&P cash for the last few days throuth about noon today. wally
You have discovered the true secret of trading: no one can predict the future. The right way of thinking about it is laying down a trap, so if the pivot is honored, you're already in a great position. If not, you know right away, and you only lose a little bit.
Wow, what an awesome way to put it. The only thing I'd add is to notice what happens when the pivot is broken. Oops, I've said too much.