identifying pivots and S/R values

general quick question, what is the best way of calculating pivots, support an resistance.

i mean there are many ways classical, caramilla, wcci, etc, BUT which is the most accurate and that seems to adhere to rules (i use this term loosely)....can anyone shed some light on this subject here..

many thanks


sami

Standard floor traded pivots are by far the most commonly used pivots so they will have the greatest amount of attention from market participants and I can tell you from experience that they do impact price in one way or another even though many will swear blind that they do not have any impact whatsoever.

Hi Sami,
according to me the best way is to draw not calculate pivots, pivots occur to be very often more of a zone structure than an exact nnumber
I usually try to zoom out the chart and draw lines between hights and lows of the bars the more touches the stronger it is,

Peter

I would add a picture to show what I mean,
by the way nice entrance out off pivot - round nr - bullish outside bar - H&S - isn't it


Peter

There's an indi for that.

and a pic

Hi Egad,

Yes, nice indi, but don't You think it creates crowd on the chart and brings question: which one is more or less important? - when one draws them by eye - at a glance would see which is of what importance ?

I think so...


Peter

thank u very much guys for the input, yes i have tried indicators for drawing the S/R lines, also i had drawn lines myself by zooming out both ways seems appealing.

what i'm trying to identify or establish is a solid foundation for a trading method not a "system" but a method where you can use combination of techniques to identify a setup or a trade....at the moment S/R, pivots points, trendlines and channels are a good starting point i think. Get used to these methods make it second nature then trades will come your way.

i have hundreds of templates and indis from friends in the forex community but i prefer the support and resistance with pivots points trendlines etc....having said that i know a friend who uses 34 indis on one chart, and he is totally devoted to those indis working for him...and makes good profit (honestly).

lets have more input please.

sami

Pivots (indi) are recalculated on a daily basis and may be easier to see on this 1H chart. I would say the S3 or R3 are always more important.

There are times though, when a pair becomes consolidated that the indi seems to get in the way. However, when this happens, nothing stays consolidated forever and you can know that a breakout is imminent.

Here's a 1H chart with an 8ma added. It's a start. The rest is up to you.

Just for clarity. At the "new day" you can see that the levels have changed.
From here, if there were an indication that price would rise to the new R3 from the pivot..... would you take it?
I say look for what lies in between and above/below the 8ma.
You really don't need the indi. You can put your own lines on a daily chart but it's an "indication " of recent movement.

Yes, of course Egad,
it is surely a good indi, and it is good it serves You, I feel more comfortable with my drawn pivots.

Peter

Hello sami,

I trade with an eye on support and resistance and watch a median line. How far the PA has deviated from that median line and the approaching support and resistance lines gives me points of probable reverses.

I open trades based on a breakout of price from this median line up to two hours before the London Open to the end of the LO. I then trade price exhaustion reversals from the swing highs and swing lows as they occur within the London session. The reversals are almost predictable to the very minute which are easily seen on any chart. The London Close, The NY Open, The Noon reversal, The Tokyo Open and Close and sudden as well as expected news events. Everything hinges on what comes first. Does the PA hit a strong resistance point at exactly 8:00 am NY time promptly reversing direction or does the increase in volume move the PA to or through resistance. Knowing how to trade these scenarios separates the winners from the losers.

As far as what's the best indicator to show the SR's is completely different from trader to trader. If you understand how to read the SR's on a chart then any indicator that makes them easy to see will help you with your trading decisions. Pivots are in the same category and there are numerous pivots based on entirely different things altogether. Semantics of swing highs and swing lows vs major pivots always seems to be viewed somewhat differently by traders. I could care less if they are called swing pivots, swing high or those bastard reversal points. I trade the PA and it will tell me based on the deviation from the median line as well as lines of the SR when to close the trade.

Do I get it right every time? No but I get it right most of the time and that's what counts. In the last six years I only made one trade that got the very bottom to the very top which was pure luck. Understand that good luck requires a whole lot of preparation and understanding trading.

In summation I use the Bols, K&G SR's, i-Reg, and some specially coded MA's. I consider the Shi-Channels to be useful only sometimes in determining PA direction and probable price exhaustion and therefore don't use them on my actual trading chart. I use the i-Reg to produce a short channel that follows the PA instead of a huge channel over a longer time period such as the Shi. Both are good tools but in the hands of a novice it's just a matter of time before relying solely on them will kill your account. They just follow the PA and not the other way around. The PA will go where it may leaving the lines way behind and the trader scratching his head.

Johnny

thankx Johnny for that input, i also use variety of tools, one is daily lineboxes. and yes PA is your best indicator....still on a learning curve.

No indy's for me for identifying pivots/ranges. They require you to plug in parameters that the market doesn't necessarily fall in sync with. I have much more confidence (an important ingredient) in my own brain/eyes. To each his own though.