Bar a few day trades not to much of major interest.
Following from the hand written sheet from J. Livermore (last weeks post) and assuming that you read the books I mentioned or sent you, we can now move on. As mentioned Livermore’s strategy was based on “Pivotal Points.” My picking the 0.33 high last week on NEU was based on Pivot Points. As we saw some bailed at .29 & .31 losing 2 & 4 pips profit respectively. If the argument is. I’m not greedy I’m happy with my trade. GET OUT OF THE BUSINESS. You are ill equipped to tame this monster or to catch the needed vitals to feed your crew. Desist and resist the urge to trade. Perhaps you have your former job to fall back on. Harsh? You think this is merely a leaf that the seasons tear off and condemn? I’d say that most of you should be aware of the five-point system used in identifying S&R. I’d be flabbergasted to think that any day traders weren’t incorporating Pivot Points into their trading as this is a major tool used by intraday traders & floorers. Not using Pivot Points would be the same as driving with a blindfold on (might explain a few of the calls on the DT’s thread) or a drunk in a midnight choir. But I find Pivot Points useful in all time frames that I trade after the basic formula has been tweaked. Basic Pivot Levels are calculated using three basic types of information from the previous trading day: High price, Low price & Close price. On running the equation yourselves you may wish to add for example, yesterday’s and today’s open. I would recommend you alter and play with that basic formula to find the correct method for each pattern and time frame.
R2 = P + (H - L) = P + (R1 - S1) R1 = (P x 2) - L P = (H + L + C) / 3 S1 = (P x 2) - H S2 = P - (H - L) = P - (R1 - S1)
Below are my calculations taken for CGM using the above calculator. I’m only concerned with First Resistance and as you can see it is worth using. Unless you research and study you won’t understand the application of the pivots.
Third Resistance = 11.2 Second Resistance = 9.8 First Resistance = 8.6
Pivot Point = 7.2
First Support = 6 Second Support = 4.6 Third Support = 3.4
"S" represents the support levels, "R" the resistance levels and "P" the pivot point. High, low and close are represented by the "H", "L" and "C" respectively. For those of you that can’t do the manual equation here’s an Online Calculator for you. These are primarily for short movements and do not take into account factors that effect price such as announcements. I find they are very effective in range bound patterns. But I have altered the basic formula so that I do incorporate them into all time frames. Not the holy grail (as previously mentioned that comes later), but another invaluable tool in the traders armory.
Livermore used heavy volume after prolonged moves to define pivot points. So increased volume was a major signal to him that the move was nearing completion or ended. Before exiting or entering he would seek confirmation of this. Due to the fact that not all Pivot points lead to reversals. Many times we can see heavy volume in the middle of trends or prior to expected announcements. This is what Livermore addressed as a “Continuation Pivot Point”. This would lead him to add to an already entered position or even to enter a previously un-entered position.
Look, don’t get me wrong. You’ve entered into a career & yes it is a career, not some anti social day job or hobby that we do to escape reality or buy the mistress a new diamond necklace. Done correctly, it’s a fully rewarding caress from a favorite lover with the reward of it saying. Yes, You’ve won me my lord touching her perfect body with your mind. It can be the most rewarding endeavor you have ever attempted. Or you can end as great Babylon trembling and naked with your flesh just like that of a veil. The pain and agony that only seven levels of despair & humiliation can attest to. Have the sons & daughters of Adam ever grasped such a feeling as to not only set eye upon but to lay bare the trembling heart of the ten multi-bagger. To begin your hunt. To set your calculations. To envisage your quarry and begin the chase. To have that bloody & bleeding heart in the palm of your hands as a testament to the hard work & research you have undertaken & completed to be the best that you can be. Not merely a gun or a guru. But a paradox in the impossibility being achieved. An enigma in the mystery being unraveled and brought to fruition. Nay, I say unto thee: That which has come to be, that is what will come to be; and that which has been done, that is what will be done; and so there is nothing new under the sun. Ecclesiastes 7:9
Ok, Let’s unmask the beast.
AOH = Ouch. That hurt someone. Glad it wasn’t us. Because we were waiting on confirmation.
AYN = This was my trade of the day. Looking for a continued move. MACD & indicators very nice.
BKP = Nice WRC & indicators looking good. This stock has a habit of pulling back into itself so watch that open tomorrow to get the confirmation of a continued ride or a lock in profit signal.
CGM = Made a great day trade.
FML = Really one to watch now. Lot of people in this at higher prices and it will move. Vigilant.
LYC = Second strategy gets the win. By on the pullback.
NEU = Confirmation of sub-waves or three corrective waves about to be given. I’ll take a position on that confirmation.
PEN = This is why we seek confirmation and we never listen to people on chat forums. Looks like “delay” won out. No real meat in latest ann. Keep an eye on it though, worth watching and trading as loads of long termers who love topping up no matter how low it goes.
PGA = Might be avin a cupper ere.
SVL = Again like LYC look for a position on the pullback once it bottoms out.
VGH = 50% Retrace into a WRC. Now prepare and set yourselves in readiness for confirmation of the pullback.
VRX = Last candle speaks to me of a rising and a falling. Little inverted hammer begging to be included with the big boys. Remember as short term traders we do in fact need to practice short term trading. Get caught in this the wrong side of a down swing and you’ll be saying Hi to the desperation & gloom I was referring to. Apply pivots, fibs and all manner of weaponry that you may have. For soon lads we be leaving these fair shores and we be heading into other seas, the Dax, the Ibex, the Ftse, the Sti and the Nasdaq. These be offering us fair booty and we’ll be showing these scurvy dogs how us Aussie pirates trade. We’ll be mounting an economic invasion lads as soon as your all finished the training.
WHN = And the movement continued. Wave three off and running.
