Classic VAL break pivot play

[Soultrader 12]

One of my favorite day trading setups involves pivot points using the value low and value high pivot. If prices break the value low pivot, I will short using a stop a few ticks above the VAL.

 

Take a look at the attachment. We had prices break the VAL and retest it as resistance.

[Soultrader 12]

After breaking the value low pivot, prices fall to the next line of support at the weekly pivot. Also notice the attempt back to the value low pivot. This offers another good short opportunity.

[Soultrader 12]

Prices use the VAL as resistance and decline for 30 pts.

[kentClark 10]

How are weekly and monthly pivot calculated? The same way as daily?

[Soultrader 12]

How are weekly and monthly pivot calculated? The same way as daily?

 

Yes. Just use the weekly and monthly chart and take the high, low, and close.

 

There will be quite some distance with the weekly and monthly pivots so some traders choose to use midpoints. I do not apply midpoints.

 

There is a variety of ways to calculate pivots. Make sure to take a look at this thread.

 

http://www.traderslaboratory.com/forums/derivatives/35-pivot-point-formulas.html?highlight=pivot+points

[namstrader 10]

what are the value high and value low pivots? are these just previous nearby highs and lows? thanks for explanation. I have tradestation and I would like to use your method also.

[Soultrader 12]

The value high and value low pivot is from the concept of Market Profile. It has nothing to do with the previous days high or low.

 

If you are not aware of Market Profile, browse through the market profile forum. You will find some good resources there.

 

Also Tradestation does not provide such indicator for market profile. Only third party data vendors provide this.

 

Here is a list of data vendors that provide market profile:

 

http://cbot.com/cbot/pub/page/0,3181,1183,00.html

 

Also if you are interested, Antonio or ant wrote a great indictor for Tradestation that will give you a similar market profile structure. If you are interested check this thread out:

 

http://www.traderslaboratory.com/forums/beginners-forum/307-number-markets-trade-3.html#post777

 

If you want to learn about market profile, I highly recommend you pick up "Mind over Markets". This is my favorite trading book by far.

 

Also check out the videos:

 

http://www.traderslaboratory.com/forums/market-profile/376-market-profile-education-resources.html

 

If you have any questions, feel free to post it here.