I don't use Clayburg's oscillators. I use his DDF line. Also I credit Jon Lukeman as the concept was also mentioned in his book. Whatever you call it, the concept of establishing a "line in the sand" (off the opening bar) where you are long above and short below. It seems to work for me. In various threads, I have posted several trades and explanations of my thinking with them. Referring to those examples would be the best way to understand how I use the DDF line (it functions like a pivot). I hope ET members will take advantage of this resource and get their questions answered soon, as I will be stopping my posts after June 21st. I hope this helps you. Thank you Lefty
OK then moving on, I am posting a chart of todays price action in the context of weekly pivots. In his book titled "A Complete Guide to Technical Trading Tactics, John Person suggests that traders keep track of weekly and monthly pivots. He also suggests that combining them with candlestick formations (reversals like engulfing patterns for instance) can help a trader to avoid buying a reversal or selling the bottom of a weekly move. John suggests that typically a weekly or monthly high/low is usually achieved on a single day and then price reacts off that push. In my experience it depends on the price level. For instance if the price is an important even number (and you are trading the S&P), it is likely that you will see a pullback before price "takes out" that level. Pit traders used to use the phrase "first through the even" to signify the way price would act when it penetrated an important price level that was represented by an even number. Also as I have suggested before, price needs to develop momentum to take out a pivot. That is why pivots are often taken out by a wide range bar. This is the equivalent of taking a run up to a fence before you try to jump over it. If you look at the first 8 or ten bars of today's price action, you can see that price could not develop enough momentum to take out the pivot. Look at the widest range bar and you will see that it "ran out of gas" after penetrating the line. Not enough bids to sustain the move. This is typical of a thin summer day in June. Notice that the weekly pivot puts a nice "floor" in under the open today. Also if you scan left you can see how the weekly pivot biscects the wide range bar down on the previous day's closing range. Again in my experience the midline of a wide range bar will often serve as a "natural" stop for price action.
I hope ET members will take advantage of this resource and get their questions answered soon, as I will be stopping my posts after June 21st. LEFTY62151 Is June 21st your birthdate? Dave
Hi David: Nope. I made a promise to an old friend who passed away a while back, to try to help traders for a specific time period. June 21st is (would have been) his birthday. Good man. I hope he is watching. Take care, Lefty
Lefty, I have heard somewhere that some floor traders update their pivot levels about 90 minutes into the session. True or false? Any info on this from your end?
Hello: You are on the right track. This is part of the "art" of trading with pivots. Locals trading commodities used to update pivots at various intervals after the open. When I worked the floor I used to signal the revised pivots levels into the pits. The time to revision varied depending on the data used to modify the pivot formula. There are many "modifications" could be made to a pivot formula. One popular revision was to add today's open to yesterdays High, Low and Close and divide by 4. Another was to average the opening range and use that in place of yesterday's close. As you can see, it all depends on how you view the market and what kind of research you do. I hope this answers your question. Good luck Lefty
I think adjusting the pivots to fit price action is a good idea. I'll test this out for the next cpl weeks and see how it goes. I was going through some stuff on pivot points. I was very suprised at the number of people selling software in regards to proprietary pivot points. All takes is a little time and you can play with the variables yourself and see what works. Anyways, Here are my proprietary pivot points. If anyone wants to buy them PM me. (Just kidding) ozzy
Awright then, I am beat today. Lack of sleep I guess. I want to make mention of my personal bias are regards the "proprietary" formulas and variations on Standard Floor Pivots (Including Carmarilla). After all these years, seeing God knows how many versions of pivots, I believe that it is not the pivots or the formulas that matter. What matters is how the trader uses them. I realize some will think this statement trite. Stop and think for a moment. After you try out some of these variations, you will see the differences are marginal. But when the bell sounds, what matters is how price acts when it approaches, tests and either takes out the pivot, or fails and retraces. A talented trader decides what to do based on what happens immediately before and after price touches the pivot. If for example he/she sees momentum build as price approaches the pivot, and the pivot level is taken out forcefully, it is sending you a message. If price touches and backs away or penetrates but cannot close above the line, again it is telling a different story. These are just a few concepts that are important, in fact more important in my view than the actual formula. People who look at these trading tools should remember that good traders, especially traders who use discretion, use everything they have to make good decisions, including experience, intuition, confirming indicators, etc. Without trying to be to dramatic, I believe that trading is a very competitive and challenging pursuit that pits trader against trader, and the guy or girl who out thinks the others and makes the best decisions wins. Good luck to all of you. Lefty