Thursday, July 2, 2009
One of my favorite tools are called pivot points. They are a calculation based on the previous Open/high/low/close bar. Pivots are used in daily, weekly, monthly and yearly charts. They have been used for 50+ years, by floor traders at the NYSE and pit traders. R stands for "Resistance" and S stands for "Support". The chart above, shows how the weekly pivots(see the blue arrows) for this past week, was the high and low (R1 to S1) ....... almost to the penny! I use pivots to look for short term trend changes, and for my entry and exit targets. I use daily pivots for day trading, and weekly or monthly pivots for longer term swing trades(a few days to a few weeks).
Posted by Jeff York at 7:19 PM