to answer your question, yes they can be used on individual stocks. but the reason they work is that most individual stocks follow the indices. (large volume at least) lay csco or ibm over a chart of the s&p and they will match up. before i traded on these numbers though i would watch the stock and see how it resonds at these levels.
I for one, would love to see some specific talk about pivots here. Pretend you're speaking to a beginner...what specific "pivot" points have there been in the last few days, and what has happened?? This thread is way too general.
I got into this somewhere else, but it's easier to repeat myself than go look for it, so . . . Think of the pivot level as the surface of a lake or a stream. The shortists go fishing here to find out if anybody's biting. They'll cast their lures over the surface of the water or even let them sink a bit to see if anybody bites. If nobody does, they bide their time (base) or do something else. (Reverse all of this for going long.) In other words, the activity at these levels is an exploration to see what's what (you can come up with your own metaphors; poking around in a cave with a flashlight is also helpful). If nobody's home, nothing happens. But if there are packs of sellers just waiting for the breakdown, the breakdown succeeds. If there are greater numbers of sharks waiting to feed on the guppies who are shorting, then you've got a nice reversal on your hands. Point is, you've got to have participants at these levels. Otherwise, nothing happens. Whatever happens is the result of whatever whoever's hanging around does. If they don't do anything, or there's nobody there, then the "pivot level" is just another line in the sand.
This is a good explanation for a beginner. Thank you. Now can you please give us some specific recent examples? This is the easiest way of getting a concrete understanding of what "pivots" are, how you look for them, and what happens as a result.
Db, On the ES , the pivots I had today........1113 R1 and 1103 as the pivot was not very useful. The one's you have on the NQ was more applicable. Therefore there was not a high probability trade for me today. One would have to be nimble on the ES today , so for me ,why even bother?
I show 1105 and 1112. Even so, it's periods like these when I'm glad I don't trade the ES. Today's range, for example, was something like 4, while the NQ was 12. A lot depends, of course, on how you're trading. Trying to implement a divergence strategy with the ES would have me banging my head against the wall, but entry on some other basis might work just fine.
I don't mean to answer for db. But my numbers for es today is pivot 1104.75, R1 1112.25. This my not be relevant to es, but I've found that on the nq there are 4 other areas that price will react to. Those are yesterdays closing range, and yesterdays overall hi/lo edit: damn, it takes so long for me to type
On the ES for tommorrow the pivot is 1108, R1-1110, and S1-1107. Not much of range there to play with either , but we'll see how it goes. Volume is light anyway. You're right about the divergences on the ES but the trend is still up, so I want to be trading to the long side unless proven wrong.
I'm talking about the nq here. About the last 40-60 min. of the session, there's usually a clear range set during that time. For setting up my s/r lines for tomorrow, I'll mark the closing range of today. The closing range for today is- lo set at 3:33pm 1465.5/ hi of closing range, is at the close 1474.5 The lo of the range and S1 are very close together for tomorrow, 66/65.5 which might indicate a stronger support area