ensoniq

In your thread you make the following statement: The 50-period simple moving average (SMA) and the 200-period simple moving average are important technical indicators that act as powerful support and resistance levels. I feel I should point out that this cannot be the case. A moving average can only be calculated after the price action has occured. It cannot provide support or resistance during a trading period because it cannot be calculated until after that trading period is over. If I ask you 'at what level can we expect resistance at the 200SMA tomorrow?' you cannot offer a reply because you cannot know where tomorrow's 200SMA will be until after tomorrow's close. You cannot give me any information that will be useful to me in advance. This is (part of) why such indicators are said to be 'lagging'. A further point to make is that, because a moving average is by its very nature an average of price action, price can be expected to spend as much time above the MA as below it - hence the probabilty of it providing support in any given instance is pretty much a coin toss (and likewise with resistance).

I would tend to agree with the point you make here. Not many people seem to realise that a five minute candle is a completely arbitrary timeframe that they are trying to impose on the market. Shift the five minute 'ruler' two minutes one way, and you get an entirely different picture, though still a five minute candle chart. Shift it three minutes the other way, and you get a different picture again . . . Daily (cash session) candles are different in that they represent a distinct unit of time, both preceded and followed by a period in which no trading occurs. I hope that's helpful.

This is a pretty old thread now, but I just stumbled upon it and wanted to add a few comments. Carter's approach (which may not be the only valid one) to pivots is very simple. I'll try and describe it in a few points: 1) Abandon any pre-conceived ideas that you may have about the pivots acting as support or resistance - you cannot predict this in advance. Instead, try to think of the pivots as levels where somethingsignificant will happen. 2) Wait to see how price reacts when it approaches the pivots. Do not try to second-guess breakouts or reversals. 3) If price breaks cleanly through (ie 'ignores') a pivot level, then a pullback to that violated level can be bought or sold in the direction of the breakout. 4) The only time that Carter will anticpate a pivot reversal and place orders in advance is when volume is extremely low. Do not attempt to use this on any instrument that is not pit-traded, doesn't have a regular cash session, or doesn't closely mirror such instruments (the YM trades electronically and off-floor, but its price always follows that of the Big Dow contracts which are pit-traded, for example, making it acceptable). You cannot expect pivots to have any significance outside of the pits, so Forex Pivots are a waste of time. The other thing that you will need to consider (I don't have the answer to this!) is whether floor traders still even use pivots, or whether they are now an outdated tool. Hope that's all helpful to anyone reading this old thread!