Pivot Point Problems

Discussion in 'Technical Analysis' started by cashmoney69, May 4, 2006.

  1. http://www.investopedia.com/articles/forex/05/FXpivots.asp

    " The textbook calculation for a pivot point is as follows:

    Central Pivot Point (P) = (High + Low + Close) / 3

    Support and resistance levels are then calculated off of this pivot point using the following formulas:

    First level support and resistance:

    First Resistance (R1) = (2*P) - Low

    First Support (S1) = (2*P) - High

    Likewise, the second level of support and resistance is calculated as follows:

    Second Resistance (R2) = P + (R1-S1)

    Second Support (S2) = P - (R1- S1) "

    This article was not very clear and I'm rather frustrated. The

    central point OF WHAT?..the OHLC for the end of the

    trading day OR for the end of a particular session ? If they mean

    the end of the trading day then here it is, for intel:

    open 19.28
    high 19.45
    low 19.21
    close 19.34

    (open price not included in below calculation)

    central point = 19.33

    Ok so here is where I think s/r is for intel on a 4 week

    S1 = 18.81

    S2 = 19.12

    R1 = 19.77

    R2 = 19.98

    First Resistance (R1) = (2*P) - Low

    ok.. 19.77 = 2*19.33 - 19.21 ?

    I get 19.77 = 19.45... :mad:

    I'm not going to bother doing the rest until I know what I'm doing.

    can someone help me here?


    - nathan
  2. Nathan,

    For futures, is the end of the trading session. I don't trade stocks, but would imagine that after RTH all pm ETH numbers are used in conjunction with next day's RTH HLC levels.

    Hope this helps. If you need the formulas for excel let me know.

    Cheers !
  3. Sorry,

    RTH ?
    ETH ?

  4. cnms2


  5. http://www.deltat1.com/Education/tools/pivot-calculator/index.htm

    Here is what i use for the ES = use the previous days Open, High, low and the close from the PIT SESSION, not the globex times. then calculate the pivot levels for today.

    The reason you do not use globex OPEN is because TODAYS open for globex is actually about an half hour away from yesterdays close, so maybe only a tick or 2 away. So the globex open tick had no value to calculate todays pivot points.

    In other words just use the pit prices of SP for the o, h, l and close. then apply those pivot points to todays ES starting at 0930Et. Then transpose yourself as a pit trader in Chicago and trade along with the flow of the pit...... :D
  6. I only include the overnight data for Pivot Point and S/R Levels calculation if there was a strong price reaction to a key market event in the overnight trading session.

    Traders (especially the pros) after 0930am est just don't forget those types of strong price movements that sometimes occur in the overnight trading session.

  7. reg trad hours. rth
    electronic trad hrs eth

  8. nihabashi
    You can not mix different sets of price levels used to get a level for a certain mkts pivot points. Yesterdays pit prices are mox-nix to tonights globex session. That session is in the history books. The globex session is not relative to the next days pit pivot points because it is a different set of players etc. Think about it................The pit guys are sleeping, right? The globex night session has the second and third stringers manning the posts. Unless something really mkt changing happens overnight, those trades from Japan, Europe can and very well might be faded by the BIG BOYS and BIG GIRLS from Chi come in and play for keeps.

    So, you just observe the overnight high, low and consider them as possible support and resist levels. Nothing else.

    I try to keep my game simple, mixing overnight players with regular hours players , institutional or pit, is not a cool idea. Thks for not confusing the readers. .....:eek: :cool: :)