Pivot, Support and Resistance Levels: the best trading tools?

I think they only work because they are self-fulfilling indicators. So many big and small players use them on all time frames. And if coupled with psychological levels, a basic profitable trading system can be created.

The question is: why are there so many variations of pivot, support and resistance calculations? Why not stick with the basic calculation (Pivot = Yesterday's H+L+C/3)? Again, if everyone is using the same basic calculation all over the world, isn't that a bad idea to calculate it in any other way (Fibo, DeNapoli, Camarella, custom calculation, etc)?

I actually prefer a support and resistance level based on the price movement itself rather than a straight line level, like MA Channel, Bollinger Band, etc. It makes more sense. But we're here to make profit, not to make sense. So I guess using whatever the majority of the traders in the world is using seems to be the best use of an indicator, and the possible Holy Grail. That way, we will get the same signal as the major players, and as soon as they act on it, we simply follow suit.

What do you guys think?

I think whatever you use will work once you have a proper feel for the market. A person can trade off any line drawn on a chart. It's a great exercise to try on a demo account.

Major support and resistance levels can not be discounted, for example the 2011 high or the 2008 low and in the same way major fibonacci levels count, as do big round numbers, trend lines and so on.. I am not a big fan of so called pivot points and the S/R levels they produce but what do I know?

All I know is that when several of these factors line up then you'd better beware. Most good traders know where these are. The good traders move the market. When they see these levels they cover their trades. Guess what happens next?

On indicators, would not depend on just indicators to trade but get the point on the variation. And as regards holy grail, that ain't gonna happen anytime soon but let's see, you never know,

I've always though that the sole reason why technical indicators work is because they are psychological indicators. Candle chart patterns, Support and resistance, Moving average, do not make sense in terms of the real value of an asset. They work because they act on the same, almost universal signal. A holy grail indicator would indicate the number of traders acting on this signal. A holy grail EA would open orders as soon as a certain percentage of similar order is detected e.g. Buy when 80% of traders buy and vice versa.

Shouldn't the aim of technical analysis is to find the most commonly used and acted indicator?

I think that you're right that most of these levels are all just psychological and systems based on them are essentially making predictions based on herd-mentality.

The only problem I see with this is that systems built around these particular levels...how well do they work? I mean, how often does price "respect" a particular level? To me it seems that it's just as likely to push through a "round number" support/resistance point as to bounce off it. If that's the case, well....you could take any point out there and it's likely that price will bounce off it.....or maybe it'll break through it. Seems to be all the same.

A lot of people around here say that the only true "leading indicator" is the speed at which price is moving in any direction "right now" and order flow which can give a halfway descent aproximation of how price will be moving in short order. Even this concept is a bit weak though because at any given time it could be the case that traders are on the sidelines with market order ready to go and should they all decide to enter the market at the same time the order flow thing can change faster than anyone can react to it.