Floor Pivots Revisited

I've gone back through months of intraday charts looking at the DAILY FLOOR PIVOTS. Was looking at the ones derrived from 24 hour data vs. pit session (RTH) data ... just eyeballing it, no "system" testing.

My observation is that the floor pivots react off of the average price and R123 and S123 from the RTH pit session more often and more effectively in terms of price action than the pivots that are calculated to include the overnight session ... even though those often work as well as S/R levels.

Just an observation and would like inputs from folks who've been following the floor pivots on the variety of calculations. Don't mean to beat a dead horse here, but this is what I'm seeing!

Feedback please ... helps me and all here.

Sincerely,

Barbecued MonkeyMeat

I'm curious if anyone has ever tested the overnight pivots along with the day session data...READ THIS specifially taking the overnight high and low and the day session high , low and close and dividing by 5 ( five)......theres some guy I think it was William H. Greenspan wrote about it somewhere.....

sorry to invade your thread MM

I knew Neal Weintraub who "promoted" the floor pivots with a book quite a while back. In fact if I remember correctly, W.H. Greenspan and he knew each other. Actually I know a fun story about their parents having to hash out an argument between the two. Greenspan simply expanded the idea of yday's H/L/C divided by three for next day's so called "average price" ... from which calculations off of that price were used to generate the potential resistance and support price levels above and below the market for the trading session. I've not tinkered or tested Greenspan's approach ... but there are a variety of other combinations and calculations using the open and "weighting" (times 2 for example) of one of the components (O/H/L/C ... and even including the "current" session's Open). Also, there's the HOURLY bar used etc. etc. and updated each hour for new Pivots.

After writing the above paragraph, I don't know if I've helped or simply confused the issue. But am just sharing what I know and am familiar with first hand.

I've watched the RTH H/L/C calculations against a few other permutations for "floor pivots" ... and in my experience the original seems to be the most effective for what its intended purpose is for. But all that matters is what works for an individual trader. BUT, as you bring up Bruce, it would be nice if someone with the time and computer capability could somehow "test" the reliability or effectiveness of Williams, Weintraubs and other pivot calculations. Seeing as the site's name is mypivots.com ... ya gotta think someone would roll up their sleeves and have a go at it. I'm too technology challenged, otherwise I'd do it.

Here's an S&C article on it:

http://www.google.com/search?q=WILLIAM+GREENSPAN+PIVOTS+weintraub&sourceid=ie7&rls=com.microsoft:en-US&ie=utf8&oe=utf8&rlz=1I7GGLD_en

I've compared RTH PP data & 24 hr PP data,I watched both on sepertate charts for a year. I did no testing, but I prefer the 24 hr data with midpoints between the Pivots if the distance is greater than 5 points, price seemed to pause/bounce more on the 24 hr pivots & midpoints, so I chose to go with that. I know some really good traders that use RTH PP data, but everyone has to find what works best for them. There is no wrong way if it's working. Thanks Bruce for idea, I will take a look sounds interesting.

"Isn't that just too obvious? Doesn't it bother all you out there that we are all calling for the same exact things as everyone else? We are watching the same obvious patterns, and all calling for the same exact spots? I for one am deeply troubled by this. Yes, sometimes the market does exactly what we expect, and sometimes that's even when every last person on the earth is calling for it. Heck, that 666 was called months in advance by an analyst, and still it went right there and turned on a dime, on an exact time factor many were watching. Sometimes it does happen. It would be cool if this played out that way, right to 942, how about a small checkback, up to 962, another small checkback, up to 1012-1021, then get crushed. But talk about scripted. Anyway, I just wanted to point this all out. Maybe it will get some responses and differing viewpoints, who knows"...quote Jim Kane
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I borrowed the above quote from the thread "ES rising wedge". The part about things just being to obvious?
This how I view these so called floor pivots; their just to obvious. Why would the floor traders give
everyone their pivots. Don't they pay $$$ to have a place on the floor? I know they use pivots, but where
are they in reality?

GREAT POINT TO RAISE, RED!

I give the WEEKLY floor pivots (original calculations) a decent weighting and ignore the other permutations ... the daily ones are only for xtra confirmation when employing the rest of my strategery if they are at a price level that I have from other types of analysis. A choppy, (and especially narrow) range trading day, based on my experience, tends to work off of the pivot levels more than probability and statistics would dictate.

In the end, they've supported my trading effectively, but only as secondary or tertiary inputs. But if I've got an MP-based level, price action level of my own along with a Floor Pivot clustered within a few ticks or a couple of points of each other ... and price movement/patterns (along with some other analysis intraday ... $Tick for example), it’s improved my consistency and equity curve.

But, to trade them ALONE ... well, it's a recipe for disaster.

Furthermore, if it appears that a setup or pattern is patently obvious on long and short term, such as a rising wedge etc., I've got mixed observations about that. Yeah, everyone and their dog's uncle's red headed stepchild sister's hamster are watching and probably reacting in a similar way to how it unfolds. There's been the idea of a self-fulfilling prophecy with this type of thing. It's interesting that Bukowski has run a bunch of classic and more recent price patterns and found that they are LESS reliable as to predicting the subsequent price move than in years past.

As to Jim’s commentary that you brought to the forefront … it’s an overall damn good point to bring up for feedback. This is my mealy mouthed response, as near as I can get to what I think is currently “real” in my experience.

Would love to hear from others on this too, Red. Open the floodgates for some additional feedback. In fact, as Bukowski did recently, it’d be nice to have some statistical input from anyone who has delved into this issue

Pivots are only lines in the sand, washed away by each price wave. They're only a newbie's good luck charm to hang onto.

Thanks for quoting me, red. I started reading that post and was thinking that sounded very familiar, and then I figured out why :-) I don't want to get off topic here, but I posted another comment in that thread, and one on GS. I thought it was enough on topic because of the idea of looking at obvious, and 'too obvious' trading setups. For those that want to follow along, look at GS. This is a case study in obvious, and look at what happened today.

No Jim, the thanks goes to you. In study Nison one of the major themes is, trading is compared
to a war where we fight smaller battles daily. So when I see s/r or pivots freely given by
floor traders, I ask if we are at war with each other why would he tell me where he is. I play
pool from time to time (9 ball) I learned early there is such a thing as a "pool shark". His
motive is to bait you by letting you win get your confidence up then little by little he begins
to take back what he LET you win. (Smoke $ Mirror)

You put it in better words than I so I used your quote.

I think the one good thing of knowing where the "Pivots" are is that we know the super powers will try to push it towards one each day......Dr. Brett says the actual pivot from the previous day is hit over 70% of the time so that is fairly good odds in my book....we have the highs and lows of being hit over 82% of the time........the point is that we can use the information in opposite ways of the standard retail trader....

I like to watch how far they can push it beyond and S1 or R1 to run the stops and then move it back strategy for R1 and s1 levels

I look at RTH pivots everyday. When price reaches area of pivot points I use it as a "pay attention" see what price does, how does price react, is there any obvious pattern in the chart?.

Using the classic calc for S3 or R3 (RTH), when price reaches near those levels, short-term momentum is usually spent. I am referring to S3 or R3 levels generated for the previous day or the day 2 days prior. Price moves to those levels, consolidation highly likely and be on the lookout for some sort of a counter move (can happen, but markets can just consolidate sideways). When 2 consecutive days of S3 very close to each other, market is ripe for consolidation, better to trade directional scalps and watch for at least a short-term breakout of the range (opposite the prior move). If R3 from previous day approached, watchout for break down, if price in vicinity of S3 from prior day, watch for breakout upside (short-term intraday).