That's a good point. 500 tick, not 1 min. I currently use daily pivot points (the standard pivot point formula). I've only found them to be useful in the sense of like if I'm already in a short position in a down trend that is getting close to S1, I might use that as a target because price often bounces off of S1. The volume on my 500 tick charts is *roughly* constant throughout the day with occasional spikes here and there. I'm still undecided on if volume is actually useful or not tho.
when do you decide a bar is a spinning top, is it at the open, when price move around or at the end of bar. When do you decide PA looks tired? Is it during price moves around, open or end of bar?
my mistake, sorry If volume is constant and not variable, then there's not much reason to use it. What is variable is time. What you could do is measure seconds that each bar took to form as "volume" instead of contracts traded. But that's getting offtrack here. Did the "double top" bounce a resistance line? If that is the case maybe incorporate real S&R for exit and entry confirmation. if youre using the 500 tick chart, shouldnt you just be eying the micro movements but also the macro movements from for example the 1500 or 3000 tick charts. It makes sense to confirm if macro trend is also an uptrend or downtrend with the micro trend for reliability
Candle or OHLC formations cannot be decided until the bar is complete. I decide a bar is a spinning top (or any other type) after that bar is completed. Prior to the completion of it, it could turn into (almost) anything else. As for "PA looking tired," I don't know what that looks like (hence me making this thread!)
So I'm messing around while I'm watching American Idol and I tried to program PA-based buys and sells into today's chart. Here are the results. Dots print at the close of the candle, so if you were to enter from them, you would be entering at the beginning of the next candle after the dot. There are more rules and I'm not a very good programmer. For example I would want to remove all long signals that were preceded by LLs, etc. But whatever, I'm just messing around. I keep everything other than volume off my chart during the day. I just did this as a mental exercise right now while I'm bored.
I just took a quick look at this, but, if I'm not mistaken, it looks pretty good. That is, if green represents buy and red represents sell. What were the signals you programmed in for buys and sells? Maybe, we can refine it.
It looks ok because today was trendy. In a choppy day it gets owned. Things such as this always look better than they perform. The buy and sell dots are close to tops and bottoms, but when you remember that you can only enter at the beginning of the following bar, it loses a lot of value. Same thing with these miracle moving averages that some companies sell. They look perfect, but you can't actually trade them until the bar AFTER the slope has changed or whatever. Many vendors actually show hypothetical entrances on the changing bar itself, but that is impossible, because up until the bar prints, it can change back and forth many times. This same phenomenon actually makes MACD even worse than it appears. Charts show ideal entries at the open of the bar where the MACD crossed. That is impossible in real time. Best case scenario is entering at the first tick of the first bar AFTER the MACD cross. I'm sure most people here already realized that, but I just potentially saved newbies thousands of dollars and hours.
Plus I have a feeling that trading using PA involves entering mid-candle sometimes. I'm so used to doing everything on the close of a bar/open of the next bar because that's the most accurate way to backtest.